Early in my career, content was king. When ink turned to bits and bytes, the power of internet-based communications ruled the earth. In the past five years, content, distribution, and even search have taken turns at the throne.
Recent developments from the supply and demand sides of the media ecosystem suggest we are in for perhaps another change in the balance of power.
Communications providers (that’s wireless, broadband, and so on) buoyed by large war chests and millions of monthly subscribers are moving into the mobile video game. Verizon and AT&T in the U.S. are leveraging their large war chests, powerful infrastructures and relationships with device manufacturers to launch new mobile video services. Verizon, in particular, hopes to combine AOL’s ad tech assets with its multicasting technology to leapfrog others (such as Sling and Sony) with its new mobile TV-ish service. There is no shortage of content publishers and rights holders wanting to join Verizon in its new venture. Vice, Scripps and the NFL are among the publishers or owners of IP joining in the telecom giant’s new mobile TV-ish service. Is this a scenario that proves that communications will be king in the immediate future?
Examining recent data from Tubular Labs might suggest content is, and perhaps always was the dominant force. Data from the 30 days that ended June 12 illustrate the importance of multichannel networks, and underscores the reason YouTube and Facebook are in a deathmatch over who will be more dominant in the realm of video distribution. While the numbers show that YouTube served 24.9 billion views from the top 10 MCNs to Facebook’s 3.7 billion, the more startling numbers are those related to the leaders in various categories. Maker Studios, owned by Disney, had 6.1 billion views on YouTube and 771 million on Facebook. Fullscreen, owned by AT&T and The Chernin Group, had 4.7 billion views on YouTube and 1.4 billion on Facebook. While it’s difficult to pin a universally agreed upon value for these and other MCNs with such metrics as views, it’s fair to say that content is king. Need validation on that idea?
Predicting future dominance in a dynamic media ecosystem is not a straightforward exercise. There are significant issues that work against each sector. My friend and former colleague Andrew Frank held firm to a notion called “the IP dominant gene theory.” His premise (which is believed by many in the media industry) is that when IP (in this case, we’re talking Internet Protocol, or the underlying fabric of the internet) faces another technology, IP always wins. If that concept holds true, Verizon’s proposed mobile content services will face challenges compared to OTT services that rely on WiFi. Carriers cannot seemingly get their act together when it comes to mobile service plans especially when it comes to data, and services such as mobile TV are data hogs.
AT&T was recently fined $100 million by the FCC for throttling speeds and misleading customers about is unlimited data plans. How long with the NFL’s deal for live mobile broadcasts with carriers last if the last two minutes of play become on long buffer or are accompanied by a text message that you’ve run out of bandwidth juice on your monthly plan.
The supply side (we’re talking content, especially MCNs) has its share of challenges. eMarketer recently published research that suggests that multichannel networks might be caught in the crossfire between the dueling trends of branded content and programmatic advertising. As the report states, the nature of branded content — that is producing videos that subtly or not so subtly mention or endorse a product or service — are a complex, three-legged stool involving brands (or their agencies), creators and the MCNs. Inclusion of a branding message in a video requires a delicate touch which is far from a real-time process. Programmatic video, which eMarketer says will go beyond the $2 billion mark in 2015 revenue, is more of a fast-twitch exercises which will require MCNs to implement new processes to have their roster of creators deliver brand messages quickly and more efficiently.
Earlier this year, in its 2015 prediction feature, experts told Videoink that creators will be in position to wield power, forcing MCNs to compete with one another as well as directly with brands (working with agencies) for the privilege of working with what are commonly referred to as “YouTube stars.” CAA’s David Freeman said, “You will see more digital talent launch their own subscription-based shows, merchandise, and touring events” while Dean Gilbert, investor-advisor, Victorious, Tastemade, and Wochit, commented, “2015 will be the year we begin to see large-scale disintermediation by creators away from the aggregators to O&O platforms where they can connect directly with their audiences; it will be the year of the unbundling of creator and influencer brands.”
In the earliest days bundling of content and communications — we’re talking early ’90s and the advent of interactive TV and voice-based info services — the synergistic relationship between medium and message was fairly cut and dry. With the evolution of cheap bandwidth, internet-fueled technology and lower barriers to entry for content publishers, the future for such trends as mobile videos are a Gordian Knot whose resolution will come at the hands of innovators from both sectors who possess a keen understanding of consumer behavior and the mysterious economics of supply and demand.