Editor’s note: Mark Terbeek is a partner at Greycroft focusing on investment opportunities in the digital media sector, with an emphasis on online video and infrastructure software.
Every day, there are press announcements about traditional content brands making their information available to consumers online in over-the-top models. In addition to traditional distributors like Dish Networks, there are new upstart programming brands that are emerging everyday attracting consumer attention by offering viewers a unique value proposition.
Allen DeBevoise, venture investor, founder of Machinima and former cable executive, has a simple framework for the evolution of the video market. He believes that, at the inception of television, we entered the first wave of video programming in the United States, dominated by 3-4 large broadcast networks (NBC, ABC, CBS and then FOX).
These broad networks each attempted to serve all U.S. viewers. Each network offered nightly news, basic prime-time programming, and a few weekly “can’t miss” segments like the “Game of the Week” in sports or Saturday morning cartoons for kids. There were, by definition, only a few choices for consumers at any given time, so popular shows would generate large and diverse audiences.
The second wave of video programming kicked off in the 80s and offered specific consumers deeper options around topics in which they had the most interest. Many new brands created tremendous value by slicing up the total broad audience into topical segments and then providing these groups exactly what they most wanted: sports (ESPN), news (CNN), popular culture/music (MTV), food (Food Network), shopping (HSN), African-American programming (BET), etc.
We are now currently in the third wave of video programming, made possible by the commercialization of the Internet, the emergence of high-quality online video streaming, player technologies, and the proliferation of billions of HD handheld “televisions” in the form of mobile phones and tablets.
Similar to the second wave, audience segments are again being sliced into even smaller groups of like-minded consumers who are passionate about certain topical areas. Emerging online video programming brands are super-serving these passionate “niche” audiences who were under-served by alternative linear options. However, there are several differences that separate the second wave and third wave.
First, these new passion audience segments are aggregated globally given the ubiquitous reach of the Internet, they are not limited in size by the reach of cable networks running past U.S. households. As a result, some of these “niche” markets are absolutely massive in scale.
Second, the on-demand nature of online programming brands (and the platforms they exist on) allows each consumer to choose his own personal path as he immerses himself in the programming that is offered.
Many new and innovative third-wave programming brands are racing to prominence due to these dynamics that were not possible in the second wave.
Audience segments are again being sliced into even smaller groups of like-minded consumers who are passionate about certain topical areas.
For example, VEVO has emerged as a dominant online video brand by offering vast programming options in the premium music video space. MTV, the dominant provider of this content in the second wave, almost entirely abandoned pure music video programming on a linear basis for a simple reason. If a consumer loves U2 and a music video started playing for an artist that this viewer did not like, he or she would change the channel. In an on-demand model like VEVO, this viewer can now watch as many videos as he or she would like about U2. In essence, the on-demand nature allows this viewer the ability to go as deep as he or she would like into any artist.
Another good example is Machinima or Maker Studio’s game channel Polaris. These content networks offer rich content about video games. In reality, these brands are really networks that are made up of many deep channels featuring content from every major video game in the market: Halo, Call of Duty, League of Legends, Grand Theft Auto, etc.
A consumer can choose to watch as much video content about any game that he or she is passionate about, even including specific tips on how to clear certain levels. These online video brands realized that the audiences for video games reach around the globe, and by offering programming content online and in an on-demand fashion, they can reach and serve each niche gamer segment no matter where they live (and play).
Here are my quick thoughts on what strategies an emerging online video brand should employ to break though the clutter.
Know Your Audience
The first step is to understand who your audience is and if your audience is currently being underserved. Who am I trying to reach and what do these individuals care about and respond to? If you can create compelling content for these viewers, you can build a passionate audience quickly. Don’t forget, this audience is available to you globally.
Tyler Perry’s movie empire is a terrific example of understanding your audience and that its needs are not being met by traditional models. Since its inception, Hollywood studios have underserved the African-American audience. He understood that an authentic voice with believable characters and stories would resonate deeply with his audience. Over the past 15 years, Perry has created one of the most successful business models in Hollywood.
Have a Distinct Voice
Since cutting through the noise is critical to being discovered, a very specific voice that resonates with a very specific audience is the key.
In early 2010, a young Swede named Felix Kjellberg began a YouTube channel, which is characterized by off the wall video game commentary with the occasional high-pitched scream. Better known as PewDiePie, Felix’s channel hit 1 million subscribers by July 2012 and became the most-subscribed-to channel on YouTube at the end of 2013. Today, PewDiePie’s “bro army” fanbase is both specific and impressively massive having reached 35 million subscribers (still the most popular YouTube channel) at the time of this writing.
Brian Robbins, founder of AwesomenessTV, thinks of it this way: “If a brand is a promise, what am I promising my audience?” Speaking to your target audience on a regular basis with a specific and consistent voice creates a brand.
A good example of a distinct voice is Russell Simmons programming brand All Def Digital, or ADD. Russell has a gift for seeing around the corner on major societal shifts, and he believes that Hollywood is not programming content that speaks to the younger, urban audience. ADD’s programming slate includes videos focused on comedy, music, pop culture/news and poetry/spoken word.
Content Is Still King
Content is king and still forms the foundation of a compelling programming brand, and making great content that connects with your target audience is still the most important element of success. Your content defines your brand and builds loyalty with your viewers.
Interestingly, the definition of “great” content is changing in the third wave. In the first and second waves, content was typically heavily produced and quite expensive to make on a per-minute basis. Shows can cost upwards of $1 million per episode with multiple shows like Friends and Game of Thrones topping out at $10 million per episode.
In the third wave, the key feature of “great” content is authenticity. Visual quality and expensive casting often give way to single camera webisodes where the content creators speak directly to an audience in their unique voices. What these programs lack in production quality they more than make up for with a personal connection.
Turn Your Audience into Your Community
Third wave programming brands are built on top of two-way communication platforms. Whether these new brands program directly through their own websites or mobile apps or on top of networks like YouTube, Facebook, Twitter or Snapchat, third-wave programmers have the advantage of being able to communicate directly with their audiences.
Successful video programmers proactively build their communities.
Viewers can express their pleasure or displeasure directly with content creators by liking, sharing or commenting on the videos. This real-time feedback is a huge advantage, as it allows smart brands to transform the paradigm from “programming to an audience” to “building a community.” Ideally, your community will feel so included in the programming that it believes it “owns” your brand. If you reach this point, your audience becomes invested in your success.
Freddie Wong, co-founder of RocketJump and producer of Video Game High School, says “if you have an engaged audience, they will always find time for you.”
Once your audience becomes a community, your viewers will drive many benefits. First, they will share your content across their social networks. An engaged community will also comment and converse with you about the content arc and the direction of future programming. This immediate feedback can be very helpful, something content creators in the broadcast and cable paradigms are still lacking.
Successful video programmers proactively build their communities. There are several simple ways to engage in activities that build this positive dynamic. These activities can include contests, fan of the week selections, special merchandise for engaged fans, VIP parties and meet-ups with the program stars, etc.
Look for ways to encourage good behavior and to discourage bad acting. Some programmers have even run crowdfunding campaigns where fans can invest in the futures of their favorite video programmers.
AwesomenessTV (ATV) has mastered building community and leveraging its positive dynamics. First, ATV encouraged its fans to launch their own channels on ATV’s network. Over 90,000 fans have launched their own channels on it so far. These fans release their own original videos showcasing their own skills or commenting on the ATV content.
Clearly, these fans are very engaged with the ATV brand and invest significant time in the community. ATV routinely reviews these submissions and casts the most promising talent in its programming slate. Second, ATV launched a very clever marketing campaign over the past holiday season to help drive the promotion of its latest movie, Expelled. ATV launched the #MakeExpelled#1 campaign across its community, and its fans embraced this challenge and drove Expelled to the #1 movie in the iTunes store. Fans invested into the success of the movie and created gains for ATV and the community.
Distribution Is Queen
Earlier this year at CES, Medialink President Wenda Harris Millard had a perfect quote about the changing media landscape. She said “if content is king, distribution is queen, but she wears the pants.”
Winning video brands will use data science to inform content programming decisions.
In today’s marketplace, video programmers need to reach their audiences wherever they are present and in whatever manner they prefer. An effective distribution strategy programs content on all relevant platforms where its target audience is already aggregating and takes advantage of the unique characteristics of each platform. Winning programming brands will be omni-channel, creating a ubiquitous presence.
Recently, NBC Universal released a survey about the changing nature of consumers preferred media platforms from 2009 to 2014. In 2009, baby boomers’ preferred media platform was TV. Now, it is No. 2 replaced at the top by PC/laptop.
In 2009, Gen X members No. 1 preferred platform was also TV. Now, it is No. 3 behind PC/laptop and smartphone. In 2009, millennials’ preferred platform was the PC/laptop, then the cell phone, then TV. Now, it still prefers PC/laptop, followed by smartphone and then TV. Finally, Gen Z was polled for the first time in 2014. They don’t even list TV, instead favoring PC/laptop, smartphone and then video games in that order.
Do you know where your audience is now spending its time? Is your content there?
Leverage Data Science to Improve Art
Winning video brands will use data science to inform content programming decisions. Netflix is an early leader in this space, leveraging its vast consumer viewing data to determine the ideal future content to license from third-party producers or to produce with its in-house studio. Understandably, this data can create a significant advantage over studios or networks that have to make programming investments totally by feel.
Following the Netflix example, emerging brands can mine data from its community regarding the sentiment of its programming. This feedback can inform programming decisions regarding plot direction, character influence, and how long episodes should run. Many savvy programmers are now looking to social media data to inform casting decisions. Casting directors and content producers no longer select actors solely on their instincts.
Programming is no longer restricted by the time slot frequency a network grants to a content producer. Now, video brands can program content as frequently as they would like. So far, most winning brands produce voraciously, i.e. “feeding the beast.”
In this new paradigm where distribution and storage of content are essentially free, more content is better. Audiences have the time and appetite to consume a lot of content (e.g. binge viewing), assuming it is good and authentic.