Distribution is king.
Never ever forget that.
What boosted all those channels on cable television… Was their availability on cable. They survived on payments from the cable systems, based on the number of subscribers. Even worse, for customers, the giants scooped up the little players and used their leverage to get inclusion and more money.
But now that's all done. The internet has leveled the playing field. Everybody can play. But can everybody get eyeballs?
That's what Facebook has, which Amazon does not. I'm plowing my way through "Bosch," the cop drama on Amazon Prime, I recommend it, it's very good, a cut above network fare, but it's not part of the discussion, few imbibe at Amazon Video, despite it being included with the price of Prime. They don't know how to get there, there are extra steps involved, but everything's up front and center on Facebook.
Credit Mark Zuckerberg, he refuses to stand still. He might not be Steve Jobs, utilizing others' baby steps and blowing them into gobsmacking juggernauts, but whenever confronted with a competitor Zuckerberg joins in, and is always marching forward. And if you think you're gonna get your television directly from your cable provider in the future, you must not be a fan of on demand, and on demand rules.
We want it everywhere and we want it now. And if you break this rule you're doomed.
But the problem is there's too much product. Over 400 scripted shows annually. And it's a golden age for creators, if you've got a track record and an idea you've got a better chance of getting it funded than ever before.
And Facebook is not the only company in the game, never mind Amazon and Netflix, but Apple's in too. And Spotify to a degree. And they all won't win, and there will be further consolidation, and a fall-off in the market/production, but tomorrow's winners will not be today's.
Because these players have deep pockets and they can sustain losses in building their market/mindshare. Hell, that's how they won to begin with.
And the new entrants, like Facebook and Apple, have learned from their predecessors. YouTube thought they could go it alone, that techies were as savvy and smart as the Hollywood denizens. But that proved untrue. YouTube wasted tons of cash, mostly on unproven providers, and has yet to have a breakout hit scripted show.
But Netflix has.
But the landscape is tilting. Which is one reason Bewkes laid off Time Warner on AT&T. Most people don't realize Time Warner Cable was spun off long ago, today's Time Warner is a production house. And AT&T has no potential growth in mobile phones, so like its competitor Verizon, it's going into content. And so far, Verizon has failed. You wonder who is running the ship. But they do own distribution.
Or does Apple? With its iPhone?
Yes, Apple wrested distribution from the mobile providers. You no longer get crapware on your device. For that you need Android. So Apple is primed to make inroads in scripted TV, and now that they've hired experienced executives…
The studios still own their libraries. And content is essentially rented, not sold, so like the major record labels, they won't be wiped out. But their leverage will decrease. Just as it did when networks were allowed to make and own their own programming.
But two lessons are learned here.
One, Zuckerberg is constantly reinventing Facebook, he's not standing still. If you think of the site as a place to connect with old friends and share photos of your lifestyle, you don't realize it's a new portal and Facebook owns Instagram and WhatsApp too, even though Snapchat gets all the press.
Second, he who has a direct line to the customer has a huge advantage. There's a reason Amazon patented its one-click checkout software. You want to make it as easy as possible. You log on to Facebook, which dominates eyeballs online, and you see the option to see a new show you've heard about and the effort to click is…
How can you make the effort to experience your wares minimal?
That's the challenge you're confronting today.