Original content. It’s one of the biggest buzz-phrases in the subscription video on demand industry since the dawn of its existence, and Netflix is its prodigy. But, in an increasingly fragmented market with new competitors (Disney, AT&T, Amazon Studios) emerging nonstop, media experts and investors are beginning to wonder whether Netflix’s market domination is coming to an end, regardless of their astounding 2018 release of about 700 worldwide original TV shows.
So, What Does This Mean For Netflix?
According to Amusement Park’s Chairman & Chief Creative Officer Jimmy Smith, Netflix will undoubtedly have to step up their game against new competitors with deep pockets, but suggested they do so in extraordinary ways, and to do so before their rivals realize their disadvantage.
“Take it back to the days of radio. They had the same type of dope dynamics that we have today with TV. Even today, there’s a sense of urgency about live sports: people don’t like to miss a live game. That’s something subscription video on demand companies should consider. Getting live sports, concerts, and events broadcast on their platforms. Fragmentation existed even when radio was popular and it eventually became an issue. The smart stations probably foresaw the future of television and began to migrate to that platform.”
What About Today’s Market?
Traditional TV was next to become fragmented, and streaming became the new way to consume content, without interruption or excess of options. Now that various streaming giants are entering the arena, what comes next?
“Now, the future is VR and AR. Back in the late 90s, George Jackson predicted that people would be streaming from their computers. Sure enough, when high speed Internet access came around, streaming became huge. When we get speeds of 4Gbps and beyond, those devices will flourish, and for companies that understand that, and can create content for that, they’ll be way ahead of the game.”
VR streaming is in the same position today as video was 20 years ago. Today’s 4G Internet with an average broadband speed of 50 Mbps is simply not fast enough to stream VR content which can require as much as 80-100 Mbps in total, not considering 600 Mbps for retina display quality. This technological breakthrough will soon be achieved; especially with AT&T launching its streaming service and considering its ample investment in 5G research and mobile edge computing (a service that enables cloud computing capabilities.) In fact, all of the players in the streaming space have VR-supported apps allowing consumers to view content through select headsets. Netflix released an app for Daydream in 2016, but since then has remained static in its investment in the technology due to low consumer interest. Hulu also offers VR viewership of their library, but at a price ($59 on Daydream, $199 for PSVR, and $399 for Oculus).
The impact of VR may have an unprecedented influence on consumers. Jimmy predicts the consequence of a nationwide adaption positively and as a tool for cultivating a greater sense of empathy in America.
“Entertainment since the dawn of time, has been manufactured to make people feel and empathize with each other. The same thing goes for VR, viewers feel as though they are there, almost touching the encompassing environment. This will become the most powerful medium as non-handheld devices will be on their way out very soon.”
Original Branded Content Versus Traditional Advertisements:
Netflix has an opportunity to integrate outside “advertising” while sticking to its consumer promise of never incorporating ads for revenue.
“Netflix’s idea of creating a safe-space from advertising, is a beautiful model. However, they can regulate that if they so choose. Gatorade Replay was nominated for an Emmy; it was one of CNN’s stories of the year. But it was a product placement ad. You can use video games, shows, and movies as an advertising vehicle. In fact, Netflix already shows ads disguised as movies. The Lego Movie is a 90-minute. ad for Legos. I think if a brand wants to pay for a feature film, why not let them? To make an impact, it’s just got to be great.”
The success of The Lego Movie can be used as a case study proving that original branded content drives sales. When the film was released in the first quarter of 2014, Lego sales skyrocketed a whopping 11% to $2 billion after flirting with bankruptcy in 2003. What this means is that advertisers need to start thinking outside traditional advertising deliverables like radio, TV, print, and outdoors and onto better, more exciting adventures. Consumers interact with ads that offer something more than a product to them. They want to experience a feeling that they will remember. An encounter so moving that it might spark a conversation, sense of excitement, or even merge into a social movement. Above all, advertisers must consider how the power of storytelling and the evolution of technology might impact perceptions, and consumer interaction with brands and humanity at large.