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Why Original Content Is A Holy Grail For Brands

Most of the key players in digital are creating their own content

18Oct

A digital content trend that anyone who watches a lot of video online will be well aware of is the desperate rush for companies to become television studios in their own right. Be it Netflix, HBO, Amazon, Apple, or Facebook, the market for 'original' shows is so fragmented that audiences will often have little idea what platform a new show is on until they are confronted with a subscription fee. This is a potentially irritating trend for consumers, who are being asked to sign up for multiple products that are, by definition in this fragmented market, incomplete.

In a sense, the notion that 'content is king' has reached its natural conclusion - that the very biggest tech companies would position themselves as content creators in all forms. Take Apple, for example. Apple Music has artists putting out their work exclusively on the platform, tvOS is soon to be awash with original content, and podcasts are often exclusively featured on Apple's platform. What we are seeing is the creation of content platforms so that brands can be protective over whatever it is they create. In a digital landscape dominated by a handful of key players, no one of them is willing to surrender content to any other.

As both the importance of an engaged audience heightens, and the benefits of running a subscription service are brought into sharper focus, more and more big companies will attempt to establish their own platforms. It's a branding issue, too - once Disney realized they could move a great deal of their Netflix audience onto a similar, Disney branded product, making subscription money while also building a loyal audience, of course it did so. Netflix has responded by planning a huge movie push to fill the void left by Disney's withdrawal, and it now simply has another huge company as competition. In a drive to stay ahead of the copycat competition, Netflix has adopted a strategy of extreme investment, putting more into original content than its rivals despite being the clear market leader.

Netflix CEO Reed Hastings said: 'As we grow the membership base, we want to grow the current budget. There are so many great shows we don’t have yet.' Even Reed's language betrays a mentality among the elite streaming platforms that they should strive to own *all* of the great shows, which is reflective of the ferocity of the competition. Netflix's commitment to original programming and the investment that comes with that is despite a growing debt that sits at over $20.54 billion, according to the LA Times.

'Investors often ask us about continued access to content from diversified media companies,'the company said in its earnings report. 'While we have multi-year deals in place preventing any sudden reduction in content licensing, the long-term trends are clear. Our future largely lies in exclusive original content that drives both excitement around Netflix and enormous viewing satisfaction for our global membership and its wide variety of tastes. Our investment in Netflix originals is over a quarter of our total P&L content budget in 2017 and will continue to grow.'

Between them, Netflix and Amazon are expected to spend $10.5 billion on video content in 2017 alone. The spending of the latter, according to Business Insider, is part of an effort to get alongside the likes of Netflix and HBO as a destination for premium shows. Shows like 'The Man in the High Castle' and 'The Grand Tour' have shown signs of promise for the e-commerce giant and, if Amazon can match Netflix's overwhelming popularity, its core business will benefit too. There's nothing to suggest Amazon cannot catch up, either. Having the best shows is often about being able to employ the best actors, writers, producers, and directors, rather than the platform on which the content eventually appears - Amazon certainly have the capital to do so.

Facebook, too, is tentatively muscling its way into the picture. Announced last month, a $1 billion budget has been set for original content on its new Watch tab. This is paltry when compared to the $6 billion Netflix and Amazon plan to spend this year respectively, but it is likely Mark Zuckerberg and co. dipping their toes into an industry and identifying whether or not Facebook has a place within it. Apple is in a more advanced position. The Wall Street Journal is reporting that the company has partnered with none other than Steven Spielberg to revive anthology series Amazing Stories. When you add this to the company's small but successful portfolio of Planet of the Apps and Carpool Karaoke, Apple's strategy becomes one of quality over quantity.

In the heated battleground that is online video, it is difficult to predict whether any of the major platforms can emerge dominant, or whether the future of high-end video is even more fragmented than it already is. Thanks to the astronomical value of good video content, no brand wants to be reliant on a direct rival for either production or distribution. Because of this, it's likely that each of the major companies mentioned will continue to build successful video platforms stacked with original content. For audiences, though, it may just mean more monthly payments. 

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