6 ms·

I wonder if assumptions about horizontal vs vertical content hold. Disney put the first episodes of their Ducktales reboot on youtube, and a week later it has..

by zanny 9y ago

I wonder if assumptions about horizontal vs vertical content hold. Disney put the first episodes of their Ducktales reboot on youtube, and a week later it has... 1.6m views. On youtube? That doesn't pay one hobbyist minimum wage for the month much less a best in class animation studio. On one hand, yeah, its targeted at kids. They probably aren't savvy at online content discovery. They almost certainly aren't subscribed to the Disney XD Youtube channel when there are Spiderman vs Pregnant Elsa videos to watch. On the other hand, they put it out for free, to anyone in the US with an Internet connection, and they got 1.6m hits. I don't think horizontal works as a business strategy. It relies entirely on memetic effects to propagate your content because the advertising budget required to reach an entire demographic to get ubiquity is magnitudes larger than the cost of actually making the thing. There is too much content inundating people - especially children. It makes your success completely random. Did your "meme" scenes go viral? Did your intricately designed quotable character take off? Did you have those, and just get overshadowed by some other meme at the time? We won't see the consequences for a while. It will be 10 years before the cablecutters who dropped Disney have children at a critical enough mass to dramatically limit the number of young faces in front of non-interactive screens. But when that comes, it will have consequences none of these companies traditionally built on tv viewership are ready for. And I don't even know if they can prepare. I feel like the only real end-game solution is to cultivate a fanbase, and use them as your revenue stream - much like how music has become today. Artists don't make anything off trying to sell their music anymore, because not being on spotify and pandora is a death sentence to your relevance. You need the audience, even if they aren't paying you anything, to attract fans that want mech you can profit from. It would be really weird to see Ducktales as a Patreon project that is getting paid by 100k supporters several millions a month, but it seems to me that is the endgame for original creative media in the long run.

013a 9y ago
I agree. Google is the canonical example of one of these horizontally integrated companies, but they're a very unique case. They use their reach to intake massive amounts of data which increases the value of their advertising. It isn't just about having more ads on more screens; its about those screens providing data which allows you to charge more for your ads. Netflix capitalizes on this a little bit as well, with using viewing trend data to determine what shows to fund next. But I was bearish on Netflix for a long time; to acquire content they have to pay recurring fees to the original producers, which means annual expenses increase as content increases, but ARR only increases when customers increase. Eventually... everyone has Netflix. How do they increase their content library then? One way is contract value depreciation of the content over time, which happens. Another is selling addon packages; the "cable industry" route. But the real answer is: Original content. In other words, growing the vertical integration of their platform. And now we see Google really quadrupling-down on efforts which sound more vertical than horizontal; cloud platform and g-suite. I think there's something here.
- zanny 9y ago
  > Eventually... everyone has Netflix. Or even more critically, everyone has seen everything they want to see on Netflix, and Netflix itself cannot produce enough original content fast enough to justify the sub. Especially when they are competing with what is often free and immediately accessible. I don't have a Netflix sub right now because nothing they make is compelling enough to pay the $10. Sometimes they release a show I want to see, so I sub for a month, watch that, and unsub again. For like a year. But we are only getting more content online over time, not less, and I'm finding way less need to seek out something to waste time watching, especially if I have to pay up front for it.
  - alexashka 9y ago
    I think there's enough good stuff on Netflix to last at least a year of watching - you just haven't discovered it. The issue is discovery - not the amount of stuff. People lean towards looking for well known stuff on Netflix - that's a mistake. It's actually much more interesting to discover the gems you wouldn't normally discover, by watching a little bit of what seems like it may be interesting. The Hollywood model had me in their shackles where I did the exact same thing you described - I'd subscribe for a show/movie I knew I'd want to watch, search for a few well known movies to re-watch and then give up when they weren't there. The really good stuff is discovering stuff that doesn't have A list celebrities - it's more original (in the good sense of the word) and now that I've put in the little bit of work of trying out shows I have no idea about, it's paid off. The really good stuff on Netflix that I've really liked: Flaked, Peaky Blinders, Hell on wheels Hell on wheels gets no credit anywhere and it's an incredible show, there are many others like it.
  - rdtsc 9y ago
    Just cancelled as well. I had queue but it was a bunch of "meh, maybe later". I'd sit there for a while searching for stuff to and often just ended up rewatching "The Office" episodes instead.
  - brianpan 9y ago
    Am I taking crazy pills? Are we really wondering how Netflix is going to survive because EVERYONE has subscribed? Isn't that the problem everyone wishes they had? Also, sub/unsub is not new. Everyone did the same with HBO and they did just fine.
pgodzin 9y ago
I doubt they put up Ducktales content on Youtube expecting hundreds of millions of view and a ton of advertising money. It's more to have the IP consumed and fresh in kids' and parents' minds for when a new Ducktales movie or toy comes out to support the reboot. The reboot is more of an ad for future monetizable products than anything else.
- pryelluw 9y ago
  Yes, they are setting up a sales funnel for all future duck tales content. People should understand that Disney makes a lot of long-term moves like this one.
- ghaff 9y ago
  Which is one of the reasons to make free or essentially free content available these days. The flipside is that, when there are free or essentially free distribution channels, there's a lot to be said for making some content freely available rather than making an inconsequential amount of money off it, if it's tied to other things you can monetize more effectively.
  - ctdonath 9y ago
    That may explain why Disney put so much high-value content on Netflix recently ... and then announced they're going to yank it all to a new & devoted streaming service. Bait viewers to the near-free content, then tell them "it moved over there" where it can be far better monetized.
- uberdru 9y ago
  You are exactly right. If you don't have a kid between the ages of about 3 and 6, I imagine it's possible to underestimate the kinds of quirky (and incredibly effective) advertising that's being cooked up for the little ones.
aaron695 9y ago
> That doesn't pay one hobbyist minimum wage for the month much less a best in class animation studio. Basically they put up an Ad for a eagerly awaited product with a really large fan base (a generation of parents wanting to give their kids the nostalgia they have) Really they should be paying Youtube? The concept of the first in a series is free is a common business concept for many products (like collectors cards, heroin, first month free memberships). It's an old concept except digital.
kristianc 9y ago
> I feel like the only real end-game solution is to cultivate a fanbase, and use them as your revenue stream - much like how music has become today. Artists don't make anything off trying to sell their music anymore, because not being on spotify and pandora is a death sentence to your relevance. You need the audience, even if they aren't paying you anything, to attract fans that want mech you can profit from. This is more or less what Disney is doing by putting Ducktales on YouTube for free.
- jdmichal 9y ago
  Completely agree. I feel like I'm in some alternate universe... Well, maybe being in Florida is an alternate universe in this case. Disney is the king of merch upsells. This is the same company that gets tens of thousands of visitors a day to actual physical theme parks. Most companies would be happy to get that to their website, which is just one URL away. Disney Jr. has "commercials" showing kids visiting different parks for the first time, and of course having a blast. Toy stores are full of Disney toys, books, movies, games, and even clothes. What is even happening anymore?

by zanny 9y ago

013a 9y ago

I agree. Google is the canonical example of one of these horizontally integrated companies, but they're a very unique case. They use their reach to intake massive amounts of data which increases the value of their advertising. It isn't just about having more ads on more screens; its about those screens providing data which allows you to charge more for your ads. Netflix capitalizes on this a little bit as well, with using viewing trend data to determine what shows to fund next. But I was bearish on Netflix for a long time; to acquire content they have to pay recurring fees to the original producers, which means annual expenses increase as content increases, but ARR only increases when customers increase. Eventually... everyone has Netflix. How do they increase their content library then? One way is contract value depreciation of the content over time, which happens. Another is selling addon packages; the "cable industry" route. But the real answer is: Original content. In other words, growing the vertical integration of their platform. And now we see Google really quadrupling-down on efforts which sound more vertical than horizontal; cloud platform and g-suite. I think there's something here.

zanny 9y ago
> Eventually... everyone has Netflix. Or even more critically, everyone has seen everything they want to see on Netflix, and Netflix itself cannot produce enough original content fast enough to justify the sub. Especially when they are competing with what is often free and immediately accessible. I don't have a Netflix sub right now because nothing they make is compelling enough to pay the $10. Sometimes they release a show I want to see, so I sub for a month, watch that, and unsub again. For like a year. But we are only getting more content online over time, not less, and I'm finding way less need to seek out something to waste time watching, especially if I have to pay up front for it.
- alexashka 9y ago
  I think there's enough good stuff on Netflix to last at least a year of watching - you just haven't discovered it. The issue is discovery - not the amount of stuff. People lean towards looking for well known stuff on Netflix - that's a mistake. It's actually much more interesting to discover the gems you wouldn't normally discover, by watching a little bit of what seems like it may be interesting. The Hollywood model had me in their shackles where I did the exact same thing you described - I'd subscribe for a show/movie I knew I'd want to watch, search for a few well known movies to re-watch and then give up when they weren't there. The really good stuff is discovering stuff that doesn't have A list celebrities - it's more original (in the good sense of the word) and now that I've put in the little bit of work of trying out shows I have no idea about, it's paid off. The really good stuff on Netflix that I've really liked: Flaked, Peaky Blinders, Hell on wheels Hell on wheels gets no credit anywhere and it's an incredible show, there are many others like it.
- rdtsc 9y ago
  Just cancelled as well. I had queue but it was a bunch of "meh, maybe later". I'd sit there for a while searching for stuff to and often just ended up rewatching "The Office" episodes instead.
- brianpan 9y ago
  Am I taking crazy pills? Are we really wondering how Netflix is going to survive because EVERYONE has subscribed? Isn't that the problem everyone wishes they had? Also, sub/unsub is not new. Everyone did the same with HBO and they did just fine.

pgodzin 9y ago

I doubt they put up Ducktales content on Youtube expecting hundreds of millions of view and a ton of advertising money. It's more to have the IP consumed and fresh in kids' and parents' minds for when a new Ducktales movie or toy comes out to support the reboot. The reboot is more of an ad for future monetizable products than anything else.

pryelluw 9y ago
Yes, they are setting up a sales funnel for all future duck tales content. People should understand that Disney makes a lot of long-term moves like this one.
ghaff 9y ago
Which is one of the reasons to make free or essentially free content available these days. The flipside is that, when there are free or essentially free distribution channels, there's a lot to be said for making some content freely available rather than making an inconsequential amount of money off it, if it's tied to other things you can monetize more effectively.
- ctdonath 9y ago
  That may explain why Disney put so much high-value content on Netflix recently ... and then announced they're going to yank it all to a new & devoted streaming service. Bait viewers to the near-free content, then tell them "it moved over there" where it can be far better monetized.
uberdru 9y ago
You are exactly right. If you don't have a kid between the ages of about 3 and 6, I imagine it's possible to underestimate the kinds of quirky (and incredibly effective) advertising that's being cooked up for the little ones.

aaron695 9y ago

> That doesn't pay one hobbyist minimum wage for the month much less a best in class animation studio. Basically they put up an Ad for a eagerly awaited product with a really large fan base (a generation of parents wanting to give their kids the nostalgia they have) Really they should be paying Youtube? The concept of the first in a series is free is a common business concept for many products (like collectors cards, heroin, first month free memberships). It's an old concept except digital.

kristianc 9y ago

> I feel like the only real end-game solution is to cultivate a fanbase, and use them as your revenue stream - much like how music has become today. Artists don't make anything off trying to sell their music anymore, because not being on spotify and pandora is a death sentence to your relevance. You need the audience, even if they aren't paying you anything, to attract fans that want mech you can profit from. This is more or less what Disney is doing by putting Ducktales on YouTube for free.

jdmichal 9y ago
Completely agree. I feel like I'm in some alternate universe... Well, maybe being in Florida is an alternate universe in this case. Disney is the king of merch upsells. This is the same company that gets tens of thousands of visitors a day to actual physical theme parks. Most companies would be happy to get that to their website, which is just one URL away. Disney Jr. has "commercials" showing kids visiting different parks for the first time, and of course having a blast. Toy stores are full of Disney toys, books, movies, games, and even clothes. What is even happening anymore?