Home entertainment distribution has exploded in the last few years, to the extent both the big shows and small shows can be hits. And now, with millions living under lockdown, the industry has boomed even more.
Whether it’s Downton Abbey, Killing Eve or Masterchef Australia, these days we’re able to happily sit up at night and binge watch the hit TV series streaming into our homes over the internet.
Entertainment on demand is what it’s all about. Millions of people now have a huge choice over what they want to see any time of the day or night.
But that doesn’t mean it’s only the hits. A massive amount of choice allows for smaller shows to be ‘hits’ too.
It’s a phenomenon called “the long tail economy,” identified by Chris Anderson, editor in chief of Wired magazine, when he wrote a book called ‘The Long Tail’ in 2006. It argued that low-selling products can collectively build a better market share than their rivals, or exceed the few current bestsellers and blockbusters, provided the store or distribution channel is large enough. An example at the time was Amazon.
As he put it: “Up until now, the focus has been on dozens of markets of millions, instead of millions of markets of dozens”.
The digital economy, in terms of online streaming services and the battle over entertainment airwaves, fits in with the theory.
Competing with the best sellers
In online markets, many niche products tend to outsell fewer hit products. Anderson found in his research that when it comes to the online (OTT) business, an interesting thing was happening: if you combined all the content from the long tail and compared their share of revenue to the top performers, the two were almost equal.
Essentially what he discovered was that if an operator could offer a sufficiently large number of niche products to a sufficiently large audience, it could compete with the bestsellers.
Nowadays, since everyone can produce their own content, the tail keeps getting longer. Millions of videos are, for example, uploaded onto YouTube every day. Further, in the digital space, content aggregators (distributors) are making access to niche content easier, which makes the tail fatter. Digital aggregators/distributors such as YouTube and Netflix, blogs and news sites are basically unlimited in how many products they can offer, store and sell, resulting in a longer, fatter tail.
Getting back to television, it is true that Netflix and other subscription video on demand services (SVOD) don’t own all aspects of distribution, as the television network owners do, as they deliver content via the broadcast services they own. The physical layer of distribution via an internet service provider is still typically owned by the infrastructure companies, the telecom or mobile operators. However, internet service providers certainly won’t block access to SVOD services.
The likes of Amazon’s Prime Video and Hulu created the ‘direct to consumer’ disruption, whereby consumers are incentivised to either eliminate or downgrade traditional TV subscriptions. That poses a threat to the highly lucrative pay TV business model, which has sustained the big studio owners.
We are seeing this in South Africa, as Netflix and Showmax gain momentum and DStv’s Premium package subscriptions decline (hastened by the pandemic, which decimated the sports broadcasting sector, a prime attraction for DStv Premium subscribers).
Netflix is producing more and more of its own, original content, which is streamed through online services, direct to consumers. So successful has it been, that it’s forced the big studios to consolidate their businesses and change their operating models.
Disney, for example, has bought up ABC, DC Comics, Lucas Films and more recently Fox, thus owning huge content libraries of both popular and niche fare. It’s also launched its own OTT service, Disney+, in order to be more resilient to the Netflix juggernaut. But it’s keeping its legacy traditional channel businesses operating in parallel.
Since the digital age has created such abundance, what comes shining through, what shows are popping up, what are the big hits? Some rather interesting dynamics emerged at the recent Golden Globes and Screen Actors Guild Awards.
Netflix received an unprecedented 34 nominations at the Golden Globe awards, but won only two, a big ‘shutout’ from Hollywood. However, some of their nominated shows, like The Two Popes, Marriage Story and Martin Scorsese’s The Irishman, are still massive hits.
While this year’s record nominations did not yield too many wins, in years to come, things will shift.
Going forward, it appears that the legacy studios will continue to operate their current models, while looking for new ways to distribute content in order to complete with Netflix, Amazon, YouTube, Hulu and Apple TV.
Television will always thrive and survive, consumers will continue to watch epic shows on big digital LED screens. It’s the traditional production and distribution models that won’t survive. The big free-to-air networks will still carry studio produced shows, the news and national sports. Pay TV operators will continue to carry channels with smaller schedules and more repeats.
However, they will all start losing both audiences and revenues to the non-linear OTT services that are delivering top notch, compelling content at much cheaper prices, and at a faster pace.
But apart from the hit shows, millions of consumers will watch the abundance of niche content available, content that suits their individual tastes, interests and needs. These could be cooking shows, wildlife documentaries, home, garden or lifestyle shows.
Anderson’s observation and comment made in 2006, that “up until now, the focus has been on dozens of markets of millions, instead of millions of markets of dozens” makes so much sense now.
Big shows for 2019
The big TV series of 2019 were:
- The Crown (Netflix original)
- The Kominsky Method (Netflix original)
- Fleabag (Amazon original)
- Marvelous Mrs Maisel (Amazon original)
- The Morning Show (Apple TV – Apple’s first ever nomination)
- Barry (HBO, a legacy pay TV operator)
- Succession (HBO, a legacy pay TV operator)
The big movies of 2019 were:
- The Irishman (Netflix original)
- The Two Popes (Netflix original)
- Marriage Story (Netflix original)
- Once Upon a Time in Hollywood (Sony Pictures, a legacy company) – won A Golden Globe
- Joker (Warner Bros. a legacy studio) – WON a Golden Globe
- Judy (Pathe & BBC Films, legacy; released through Amazon Prime Video streaming service) – won a Golden Globe
Clare O’Neil has been in the media and broadcasting industry in South Africa for over 30 years. O’Neil served on the SABC Board and recently served as CEO of the Broadcast Research Council, which she set up from scratch. She currently consults to an international television network and was joint recipient of the 2019 BELL Award.
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