The Streaming Wars Are Being Fought on More Fronts Than Many People Think

Never fight a war on two fronts. Never get involved in a land war in Asia. These are solid, reliable maxims for those going into battle. You never want to find yourself overwhelmed and overstretched as you attempt to create supply lines to multiple locations and divert your attention.

The Streaming Wars feature dozens of fronts, all of which require the full attention of the various combatants. In the last few weeks, armaments and strategies of more parties became clear. Apple+ recently announced its pricing and original content lineup, Disney+ did likewise and NBCUniversal unveiled Peacock, coming soon and sporting a lineup of classic and new movies and shows. Netflix scored “Seinfeld” and Quibi unveils new shows every three hours.

If the battlefield is beginning to seem ridiculously crowded, you’re not alone.

As media commentator Mathew Ingram said,

Someone – possibly Ingram – pointed out that media was never really supposed to work like this, meaning a separate channel or platform for every media production company or distributor. NBC has always aired NBC programming (though that material used to be produced by a more diverse array of companies), but the television signal coming into your house wasn’t only delivering NBC shows.

Maybe this works better: If you wanted to buy DVDs of the shows you like, you didn’t have to go to the Fox store to get “Buffy, the Vampire Slayer,” the Warner Bros. store for “Friends” and the ABC store for “Lost.” You could get them all at Best Buy.

This Used To Be Their Playground

At various times many of these companies have run their own retail operations. The Warner Bros. Store was great counter-programming to The Disney Store. The Viacom Store never expanded beyond Chicago. All offered media and goods specific to that company, but that’s what was expected. And, importantly, you didn’t need to pay a cover charge just to get in the door.

The one time media did work like that was when studios owned movie theaters before the 1948 consent decree that such vertical integration was unfair and unlawful.

Netflix CEO Reed Hastings has said it will be a “whole new world” come November when both Apple+ and Disney+ are scheduled to launch, and there may indeed be a price-based shakeout in the landscape not too far in the offing as people decide how many of these are actually affordable. It’s going to be a bit sad if it comes down to who has the more attractive premiere classic sitcom to act as its differentiator.

For as exhaustive as the list above might be, what’s notable is that it’s actually incomplete. At the same time NBCUniversal and others were solidifying their strategies, Instagram announced a new Jonah Hill-produced documentary would be hosted on that platform. Facebook continues to expand its Watch programming with original series featuring big name talent. Twitter isn’t participating in this particular game at the moment, but it has a number of deals with media companies for news programming. Snapchat has found success with original material.

These social media companies aren’t implementing the same model as Netflix, Hulu, Disney+ etc, but are competing for the same hours in people’s days. They want to be a go-to-destination for the significant number of hours people spend each day watching television and other video. And those social channels come with the advantage of not requiring paid access along with the fact the habit of checking them for updates, Stories and more is already baked into the audience.

The DTC Media World Won’t Last

Yes, these media companies are in many ways chasing the same direct-to-consumer model that has popped up in the last few years, one that’s evident to anyone who’s listened to more than eight minutes of any given podcast. But there’s a big difference between subscribing to a shaving accessory service and one that delivers original movies and shows. It’s fairly unlikely someone is going to subscribe to three shaving services, mostly because doing so would represent a significant and unnecessary overlap of features.

That’s going to hit streaming as well as people realize that one show they setup a trial account to check out isn’t worth the monthly fee given they don’t watch 75 percent of the other content available. If that sounds familiar, it’s just about the same reason given when people ditch their cable subscription.

I have to wonder how many of these companies are considering the sheer volume of competition they’re up against, including Instagram, Snapchat and more. Goodness knows that people in the audience know exactly how much time to spend on video and will make choices taking that into account, along with which shows/platforms have the attention of their peers.

Streaming Originals Could Change How Movie Marketing Campaigns Are Run

Original content may decide who wins the streaming wars

Where were you when you found out Netflix would lose “Friends” next year? How many sad face emojis did you use when you Retweeted the news “The Office” would be leaving?

Much of the news surrounding the launch of streaming services from all the big media companies has focused on the fate of what we’ll call “legacy IP,” shows and movies that are at least a few years – if not decades – old. HBO Max will soon host “Friends” while “The Office” will go to NBCUniversal’s still-unlaunched service. Disney+ will be the exclusive home of Star Wars, Marvel and other franchises.

That these older properties still hold so much allure and potential for the companies that own them is telling in and of itself. Their continued popularity makes them pure revenue generators, their production costs long since recouped and little additional expenditure required. Better to keep selling audiences what’s old and familiar because it’s cheap to do so.

The future of media is, it seems, largely dependent on the availability of 20+ year old sitcoms. Some surveys have shown that licensed content is what people want from a streaming service. It’s likely safe to include legacy IP in that since it makes up a good chunk of that licensed content.

Despite this, each company also realizes the need for original material. Apple has a reported $6 billion budgeted for original shows and movies. Quibi has raised $2 billion for the new shows it seems to announce every other day. The $15 billion earmarked by Netflix includes acquisition as well as production. By these measures, the $1 billion Disney is said to be spending on production for Disney+ is miniscule, but given the strength of the catalog titles it has at its disposal it’s understandable it would start smaller.

So much money being devoted to producing original series and movies shows there’s an appetite for that material among the audience. That would also explain why the announcement of each has come with a list of what new content will be available. HBO Max was touted as featuring two movies produced by Reese Witherspoon and four by Greg Berlanti and just made a new Steven Soderbergh film its first major acquisition. Disney+ will offer a handful of remakes of classic films along with new movies starring Anna Kendrick, directed by Tom McCarthey and so on.

We already know that advertising for the services themselves – which usually includes snippets of highly sought-after content serving as the core proposition – has dropped recently.

While a handful of teasers and promotions for some of the series and shows coming to these services have already been released – Apple dropped the full trailer for its much-anticipated “The Morning Show” just a couple days ago – we’ve yet to see any marketing for the films and movies scheduled.

Still, a number of assumptions can be made based on the campaigns run for original films on Netflix, Amazon, DC Universe and other streaming platforms.

Trailers will likely be released on YouTube and social networks. This despite the fact that all these platforms are in many ways competitors, featuring their own original content productions and/or deals. Shows exclusive to YouTube, Snapchat, Facebook and others compete with those currently found on Netflix or coming from Disney etc for the time, money and attention of the audience. Still, the critical mass built up by those platforms as distribution hubs seems to trump any concerns about using a competitor’s infrastructure.

One has to wonder how much longer this will be worth it, though. It’s already clear that Facebook in particular actively prioritizes its own material in the content it shows users, illustrating how these platforms act in their own self-interest. For the time being, though, use of third-party video hosting remains the default and I don’t know if we’re actually headed toward a return of the days when trailers were available only as uploaded media on an official website.

Putting distribution to the side, the format of trailers may also be up for a bit of reinvention. The standard 2:30 running time is one dictated by the MPAA as the maximum allowable. While objectively a short amount of time, it’s eons in terms of online video. User preferences on social platforms are much shorter. It’s possible instead of one primary trailer and subsequent shorter shorts studios begin to create collections of :45 second promos. Each could offer a specific value proposition instead of trying to cram as much as possible into a single, longer video.

Whatever the case, studios need to stop simply cropping 16×9 videos for formats preferred by social networks. That’s terrible.

Websites themselves are even more questionable. The attention paid to them by studios of all kinds has waned in recent years to the point where the content shared is limited to a single trailer, a brief story synopsis and links to buy tickets. Some movies get more attention online than others, but the default now seems to be minimum viable effort, just enough to justify securing the URL.

That shift reflects changes in the overall media landscape in the last half-dozen or more years. Many media companies no longer see “drive traffic to website” as a primary goal of their online marketing, choosing to produce content that lives solely on one or another social media profile. Asking people to click from Twitter to a website in order to buy tickets isn’t as efficient as simply putting the ticket-buying link in a social update where it can be immediately acted upon.

It’s likely at least some of the streaming services will follow Netflix’s lead and simply abandon the standalone website altogether. That company, with a couple high-profile exceptions, hasn’t even bothered to create sites for its movies, a tactic that makes sense given the call to action for them is “watch now” or “subscribe now.”

Social media, for that reason, is more likely to continue being a tactic consistently implemented. This is how studios are going to increasingly reach modern audiences who live on their mobile devices and use those networks for news, personal connections and work.

Hints as to how those networks could be activated are likely found by looking to not only Netflix but smaller studios like IFC Films. Both rarely create standalone profiles for their films, preferring to support them on the brand channels. The level of that support varies from film to film, though. IFC recently paid little attention to Vita & Virginia since it was busy promoting The Nightingale. And Netflix props up its original shows much more frequently than it does the movies it debuts.

You can see that brand-centric approach already being taken by Disney+, which recently made headlines after debuting its Twitter account and engaging in conversation with all the IP it manages.

The reality is that creating Facebook and other profiles for every individual movie has never made a whole lot of sense. Movies are products whose expiration date is clearly displayed on the label, so devoting significant resources to building up an audience for each one – and audience that is then abandoned within months of acquisition – seems wrong-headed.

Posters are also a format that may not be long for this world. While Netflix and other streamers have continued producing them over the years, in a world where theatrical distribution is reserved for only the biggest of the big releases there wouldn’t seem to be much rationale for creating the 24×36 one sheets designed to fit in backlit cases in theater hallways.

Studios are already producing promotional graphics formatted to work well on social platforms, so why not drop the facade of needing to create a “theatrical poster?” As with trailers, focus instead on a series of images that, when released in sequence, tell some sort of story.

That’s what Netflix did on the Instagram profile for The Ballad of Buster Scruggs, posting several collections of images that on their own weren’t much. When viewed in “grid” mode, each collection showed a full picture of one of the movie’s stories, offering a better look at what audiences could expect in a way formatted to take advantage of how that platform was used.

buster scruggs instagram.png

Advertising campaigns could also be due for a shakeup. Studios usually begin paid campaigns around the time the first trailer debuts, using Promoted Posts on social networks, putting pre-roll ads on YouTube and placing banner and other ads elsewhere on the web. TV commercials are often reserved for the last month before release.

Some of that could be retained in a streaming-centric world, but general online ads are likely to be changed significantly. For theatrical movies those ads point to websites where people can buy advance tickets, but Netflix usually reserves online ad buys for *after* a movie is available to watch, not before. That’s a big shift in tactics and could have serious implications for the kinds of sites that depend on movie ad revenue.

Again, we’ve yet to see marketing campaigns for the original films from Disney+, HBO Max or any of the other to-be-launched streaming services. So it’s not clear what kind of marketing support they will receive or how tactics may change.

One factor that could play a big role in how these campaigns are rolled out is that, unlike Netflix, the companies behind these streaming services all have long histories of theatrical releases. While Netflix has battled on many occasions with theater chains, WarnerMedia, Disney, NBCUniversal, Paramount and others all have comfortable relationships with the MPAA, NATO and others in the exhibition industry.

Those groups – and their members – have previously supported the big media companies as being continued supporters of theatrical movie-going, especially compared to upstarts like Netflix. Even Amazon has preserved those relationships by giving their original features theatrical distribution prior to streaming, though that window is shrinking from months to weeks with upcoming titles like The Report and The Aeronauts.

It’s possible, then, that the campaigns for streaming exclusive films could be decided based on which feathers are or aren’t being ruffled by companies that want to continue to live in both worlds.

More clear is that the current function of movie marketing campaigns have been dictated by the form of release patterns, specifically putting films in theaters. As that default setting is increasingly no longer applicable, the function will change in ways more relevant to today’s consumers, whose media habits change daily.

What To Make of 2018’s Movie Industry Landscape

The headlines began with a couple weeks still left before the end of last year, hyping that movie ticket sales had already reached $11 billion. The final tally wound up being just shy of $12 billion, a record-setting number that was 6.7 percent over 2017’s final haul. Disney was responsible for a quarter of that all by itself, thanks largely to the massive success of Black Panther, which was never overshadowed even though it came out all the way back in February. A late burst from Spider-Man: Into the Spider-Verse, Aquaman and a few other releases helped push it over the top.

The news is even better globally, with worldwide box-office up to $41.7, with the U.S. domestic market leading the growth for the first time in a long while.

What remains to be seen is how things fared in terms of actual tickets sold. It’s estimated to be around 1.2 billion, which would be about five percent higher than the dismal showing of 2017, when attendance was at a 25 year low. That’s still well off the high of several years ago, a trend attributable to several factors including the high ticket price, the speed at which new movies come to home video and more.

Diminishing theatrical audience numbers have been masked by the focus on total sales, which has steadily increased thanks to rising ticket prices due in part to prestige formats like Dolby, IMAX, 3D and so on. Attendance figures were also helped by the popularity of MoviePass, which has done everything it can in the last six months to erase consumer goodwill.

There are, of course, lots of lessons being offered given those dollar amounts. Various op-eds are pointing to the resurgence of movie theaters, thanks in part to Hollywood studios releasing popular films throughout the year instead of grouping them all in three months of summer. And those releases have been more diverse than in recent years, though while more black directors enjoyed more success the number of female directors continued to be flat.

A recent study found little cannibalization by streaming of the moviegoing experience. Instead it seems that the two sit side by side, each fulfilling a different need in the audience and serving them unique material to enjoy. Given the study was commissioned by the National Association of Theater Owners, it’s not surprising the angle taken is that theaters are doing just fine. Some harsh realities are brewing not far below the surface, though, that could make 2019 an interesting year for the entertainment industry.

Streaming revenue has already topped that of theatrical exhibition, something driven by the proposition of higher value for the money. Netflix in particular tends to be the boogeyman haunting the dreams of theater owners and big media companies, who are either ready to launch their own streaming services to compete against it or sign deals to produce films for it.

Netflix has 55 original films a year planned, including upcoming releases from some of Hollywood’s leading filmmakers. And because they eschew all but a cursory theatrical release for most of those movies and are refusing to play by anything approaching traditional rules, they are threatening the validity of those rules.

It may be true that studios are once more in a position to grasp the Oscar statuette once reserved for the smaller independent players that trafficked in the kinds of films that garnered nomination. Left unsaid, though, is that they’re back in that position because those awards-friendly films have been produced by Netflix and others and are being shunned from prestige consideration. So the mass appeal blockbuster remakes, adaptations and sequels from the major studios are left as the only films available for nominating committees to choose from.

Netflix is simply making the kinds of movies the studios no longer are interested in, shown in stark relief this past summer when it put out a number of romantic comedies to address unmet consumer demand. When you look at the winners and losers at the box office last year, the “losers” category is filled with niche films that would play much better as streaming releases, where the barrier to entry for the audience is so much lower than taking a chance on an unknown quantity at the expensive theater. Even comedies, which once dominated the box office, are now a bad bet for studios and theaters.

It also remains to be seen how susceptible theatrical exhibition is to whatever form the looming recession will take. Also coming down the road is the potential lifting of what’s commonly known as the Paramount consent decree. That could prove devastating to smaller theaters who don’t have the safety of scale bigger players like AMC Theaters and other large chains do. If the number of movie houses with fewer screens, the ones that often operate in less affluent neighborhoods, begin folding it will create fewer people who have any theatrical experience available to them, choosing instead some mix of legal and illegal streaming or downloading.

There are lots of unknowns and predictions are likely useless, despite what others making them may believe. What seems certain, though, is that 2019 will be a rough one. Netflix will continue to find ways to dominate the cultural conversation, stealing attention from theatrical releases that, in the coming year, seem somewhat lackluster. Further problems will develop from a mix of economic slowdowns and increased competition from all quarters as the same media companies that feed movies into theaters begin to divert some of that stream to their owned streaming services.

It’s also likely there will be a major shakeout in the streaming market. The consumer base simply can’t support all of these, and we’ve seen recently that when a service can’t achieve massive scale the corporate owners will shut it down.

Basically, 2019 is going to be a little rough.

One Big Question Still Outstanding For New Streaming Services

History offers a few indications of how Disney and Apple might sell their original streaming content to the public.

Within the next several months we will see the debut of new streaming OTT services from both Apple and Disney. Both have been announcing new series and movies in the last year and are poised to significantly disrupt the market of existing players. Apple has been more focused on TV shows and hasn’t, to my knowledge, branched into feature films, but Disney has a mix of shows and movies planned.

Among the original movies on the schedule are:

  • Noelle, starring Anna Kendrick. The movie was originally slated for theatrical release but was pulled from the calendar in favor of saving it for the eventual streaming service.
  • Lady and the Tramp, a live-action remake of the animated classic that has put together an impressive cast so far including Tessa Thompson, Justin Theroux, Kiersey Clemons and others.
  • The Paper Magician, based on Charlie N. Holmberg’s book of the same name.
  • Togo, about a sled dog in the 1952 run to Nome.
  • The Sword in the Stone, another live-action remake of an animated film.
  • Three Men and a Baby, a remake of the Ted Danson/Tom Selleck, Steve Guttenberg family comedy.
  • Stargirl, based on the novel by Jerry Spinelli about a ukulele-playing girl who goes to public school for the first time after being homeschooled for years. Grace Vanderwaal has been cast to star and the movie should not be mistaken for the DC Universe streaming series “Stargirl” based on the Geoff Johns-created super hero.
  • Don Quixote, a new version of the story directed by Billy Ray in what is probably an unintentional throwing of shade at Terry Gilliam, who’s still struggling with the adaptation he’s been trying to make for over 15 years.

That’s an impressive slate and, when added to whatever Disney and Fox catalog titles, Star Wars TV shows and more that are also planned, makes a powerful case to give the service a try.

Despite the difference in strategies, the questions raised here by Daniel D’Addario at Variety about Apple’s plans are applicable to Disney’s upcoming service as well. Still, aside from what either service will eventually be named, one big one remains in my head:

How are these movies going to be marketed to the public?

The answer, I’m wagering at the moment, lies in a mix of how Netflix’s marketing for its original films has evolved over the years and some ways Apple has experimented with adding value to its on-demand video store in the past.

First, as I pointed out recently, Netflix has become much more ambitious with its movie marketing tactics recently. Whereas it used to regularly only release a single trailer – sometimes less than a week before the movie was available – and a half-hearted poster, it’s embraced featurettes, cute videos with the casts of high-profile movies and more to build and sustain the conversation. These are the same kinds of videos that have been produced by online media brands like Vice, Vox and others in the past and are meant to appeal to the same young, hip audience.

Second, iTunes regularly adds what it calls “Extras” to some of the high-profile titles available through its storefront. These extras are similar to what’s traditionally been produced as bonus features on DVD and Blu-ray but are unique to the service, encouraging audiences to pay a little more for the supplemental material they’ve enjoyed in the past. Sometimes you can access bonus features early if you order the movie for home viewing months in advance, often while it’s still in theaters.

Apple as a whole is not known for its content marketing efforts. The company has historically run social media accounts that were all but barren, there only so it could use the accounts to run “dark” ads that were inserted into people’s feeds.

It will find, though, that when the goal is to get people’s attention and compete against a slew of other providers on the basis of exclusivity and not convenience, it’s going to have to up its game. That will likely mean not only on-platform promotions such as placing banners in the featured carousel of the iTunes store (similar to what Netflix does with the top of its logged-in homepage) but also going off-platform to YouTube and social networks to meet audiences where they are, hoping to pull them in to download an original film or series. Featurettes, interviews and other material could be a big part of the message put out there, offering something unique to anyone opting to jump in.

Disney won’t have quite such a steep learning curve, of course. It already wholly embraces off-site advertising and marketing for its existing film and television slate. Still, the economics will be somewhat different because it will be working against gravity to draw in new customers and continue communicating the core value propositions. On-platform promotion will be a component of the mix, to be sure, but one that will be small at the outset until a critical mass of users are accumulated.

All of this is speculation since, again, we don’t even have official launch dates or brand names for either offering. But there are precedents that can be looked to as we wonder how big a splash both will make upon arrival.