Reading "The Streaming Book" by @ballmatthew

The War Begins

One of the core lessons of the access wave is that eventually, its once-innovative technologies commodify, and its commercial and tactical models become convention. The result is a rush of new entrants as many “legacy” players make the leap from the “old” modality to the “new” one. This resets the basis of competition from access to the point of access—entertainment.

I call this wave “content-based competition.” During this wave, market participants will continue to grow by cannibalizing the old modality, but the fundamental increase in the number of competitors means that growth becomes increasingly zero-sum. As such, it isn’t enough to build technology that distributes old-modality content through new-modality systems or to port over legacy business models for a new era. To thrive, market participants must produce great, must-have content that convinces consumers to get content from them and not others. Accordingly, the content-based wave sees various players take back their content, produce more content, and ratchet up the budgets of their content, too.

During the “content-based competition” wave, acquisition tactics, such as marketing and distribution partnerships, free trials, promotions, and bundles, still matter. Furthermore, increased competition means that rigorous LTV analysis is more important than ever, especially when it comes to what content is made, expanded, canceled, budgeted for, and so on. Furthermore, the advantages born in the access wave will endure and benefit content investments, too. But overall, the content wave shifts value from distribution and aggregation to creatives, rights owners, and the few entities that reliably produce best-in-class content.

In a bit, I’ll get to the current state of content-based competition in streaming, but it’s helpful to observe historical examples first.