Streaming With the Major Media
The Challengers
For the purposes of this article, challengers are defined as disruptive forces in the market that are making executives at the big media companies re-evaluate their digital plans of attack. The disruptive force is not coming from the technology or content, but is instead erupting from new types of distribution channels.
The disruptive forces that I am talking about are MySpace, YouTube, Google, and Yahoo!. While MySpace and YouTube are relatively new to the landscape, Google and Yahoo! are not. MySpace and YouTube focus on user-generated content, while Google and Yahoo have other core competencies that they are leveraging to provide products and services around video. MySpace is a social networking company that can leverage its inherent viral nature and user-generated content environment to distribute content, and despite being owned by News Corporation, it has still managed to maintain its outsider cachet. YouTube has relied on user-generated content and viral hits to drive traffic to its site.
In all four cases, the major threat to the big media companies is that these four entrants are responsible for around 20% of the internet’s traffic. The numbers alone are mind-boggling. Google and Yahoo! generated billions of page views a month before they had video. Now they are figuring out their video plans, and have a resource that most internet (and television) companies want: eyeballs and revenue.
MySpace and YouTube bring another disruptive element to the marketplace: user-generated video. It is not yet clear how user-generated video content can be monetized, yet, particularly because advertisers want to protect their brands. While user-generated video has its place on the internet, and probably does its fair share of eyeball-stealing, the lack of a proven business model gives highly produced and branded content the upper hand on the internet for now.
Some of the large media companies, like NBCU, are making deals with the challengers to test the waters and see if the traffic of the disruptive sites can be leveraged to distribute branded content. We will see if that model fares well for either party.
Conclusions
A look at the current streaming landscape among the big media companies shows some interesting trends. The larger, more established media companies like Disney and Viacom are investing and innovating in building their own streaming experiences, while the latecomers are partnering with internet properties to distribute their content.
It is hard to tell whether destination sites or aggregation sites will win in the end, but Disney and Viacom are sure to push forward with their streaming investments over the next few product cycles.
Another trend among the big media companies is the concept of creating a single platform for streaming media, and leveraging it across brands and properties. Streaming media provides the ability to build once and franchise across multiple platforms in a very cost-effective manner. With these platforms built, leveraged, and franchised, media companies are using them as tools to promote television properties and to extend their brands and creative intellectual property.