Successful the streaming content material wars



With rights holders pulling their content material from streaming providers in droves to supply it on their very own, the foundations of content material ROI have modified dramatically. The times when firms might rely on a stream of income throughout theatrical ‘home windows’—field workplace, DVD, premium and primary cable, broadcast syndication—are coming to an finish. So are the soft licensing offers that allowed poorer-performing titles to be packaged with blockbusters.

On this new world, each content material asset issues. One clunker can imply a mass subscriber exodus. That’s why we created a three-pronged formulation for content material valuation that may assist drive significant and sustainable ROI. The formulation is easy and consists of three variables: demand, growth, and exclusivity.


To correctly worth any third-party TV present or film, one should perceive demand. That’s no straightforward process within the period of streaming. Most platforms choose to not share detailed viewership knowledge with the general public. Nonetheless, some unbiased knowledge and analytics corporations, together with Parrot Analytics, have constructed their very own demand metrics primarily based on the extent of piracy and social media chatter, and these can function an excellent place to begin. The subsequent step is to mixture all forecasted and precise revenue-based metrics (corresponding to ticket gross sales and whole views) along with social-impact metrics (corresponding to social media impressions) and high quality metrics (corresponding to awards or Rotten Tomatoes rankings). That can assist create your individual demand metric for present and future content material.


Content material that may be expanded into sequels, spin-offs, and TV collection tends to be extra beneficial than ‘one-and-done’ reveals and movies. Titanic was a historic field workplace success, taking in US$2.2 billion worldwide, however the film doesn’t simply lend itself to growth, given the finality of the ending.6 In distinction, Harry Potter is fertile floor for growth with its 8 movies taking in US$7.7 billion on the worldwide field workplace.7 However due to toys, video video games, Halloween costumes, and theme parks, the franchise is valued at greater than US$25 billion, which suggests an energetic and engaged fan base that’s at all times hungry for extra content material.8

Now think about growth in a streaming context: The Mandalorian is a part of the growth technique of maybe probably the most profitable content material franchise of all time: Star Wars. Market-intelligence supplier Antenna discovered that 29% of Disney+ subscribers who signed up in the course of the launch of The Mandalorian’s second season had really subscribed to Disney+ up to now. To wit: these prospects had been becoming a member of again as much as watch one explicit present that held the promise of extra to come back.


Exclusivity performs a serious position in serving to firms appeal to prospects to their streaming platforms. Assume again to January 2021, when the beloved nine-season, 201-episode NBC sitcom The Workplace moved from Netflix to Peacock. Followers of the present’s stars helped NBCUniversal’s streaming platform earn extra paid sign-ups round The Workplace’s debut than in the course of the nationwide launch of the service or some other new programming occasion, together with Premier League soccer.9 Disney+, in the meantime, provides an identical worth proposition with Marvel’s superhero fare, which moved from Netflix after Disney+ launched in late 2019. Since then, Disney-owned Marvel content material has been an enormous driver of buyer acquisitions.

Enjoying to sort

There is no such thing as a single proper approach to apply our formulation for content material valuation. Every participant within the streaming ecosystem has its personal content material technique and enterprise and income mannequin. Some firms will supply content material free of charge with the purpose of accelerating viewership and merchandising gross sales. Others will solely wish to improve subscriber income. Each media govt should see the formulation via the lens of their very own enterprise and future development technique. In our evaluation of the business, 4 instructive archetypes emerged. Every requires a unique utility of our content-valuation formulation.

1. The Reigning King

Netflix, the streaming king, is in a class of its personal. The corporate has 222 million paying subscribers as of its fourth-quarter 2021 earnings report.10 Examine that with Amazon Prime Video’s 175 million, Disney+’s virtually 120 million, and Peacock’s roughly 54 million.11

Netflix is projected to spend greater than $17 billion on content material in 2022, a 25% improve from 2021 and a 57% improve from 2020, as the corporate should exchange a whole bunch of tv reveals and films which have left or are scheduled to depart for different streaming platforms. But even with hit reveals disappearing, Netflix nonetheless has the most important and most strong content material library on the planet. And its technique is to proceed constructing that library with its personal content material, notably reveals tailor-made for worldwide prospects, like Narcos: Mexico and the Spanish crime thriller Cash Heist.

How the Reigning King ought to use the formulation: As Netflix matures in its second decade of streaming, the equation varies primarily based on the geographic market. In saturated markets like North America, the place Netflix already has greater than 75 million subscribers, growth is an important variable: Netflix should discover new alternatives for development past month-to-month subscriptions.12 For each content material funding made, Netflix should ask itself: Can this piece of content material be expanded to understand its full worth? Can it drive larger common income per person (ARPU) by way of different income streams corresponding to merchandising and new experiences? To bolster its two major sources of income—streaming and DVD leases—Netflix not too long ago launched an internet store for branded merchandise like Stranger Issues hoodies. Alternatively, in rising markets the place Netflix remains to be attempting so as to add subscribers, the demand and exclusivity variables tackle higher significance.

2. The Nostalgists

Current streaming entrants, together with Disney+, HBO Max, and Peacock, have garnered thousands and thousands of latest prospects and proceed to achieve traction available in the market. One widespread denominator of their success: nostalgic blockbusters. Whether or not it’s Disney+ with Star Wars, HBO Max with The Sopranos, or Peacock with The Workplace, the formulation revolves across the positive and acquainted consolation of hit reveals and films. The nostalgic attraction of such content material can be multigenerational: Star Wars pulls in older viewers who fondly bear in mind the unique 1977 movie whereas concurrently hooking youthful followers with The Mandalorian.

How Nostalgists ought to use the formulation: Whereas demand and exclusivity matter to Nostalgists, growth is an important variable. Confirmed hits have established universes of followers prepared to surrender their money and time for spin-offs, sequels, and merchandise. Some Nostalgists, like Disney and NBCUniversal, are within the enterprise of growing new materials, and because of this nonetheless depend on the field workplace success of latest content material properties for income.

3. The Ecosystem Techies

Whereas Nostalgists see content material as the first driver of worth, others understand content material as a way to an finish. Corporations on this class aren’t involved with viewership as a lot as how that viewership interprets to different outcomes, corresponding to buyer interplay on their platforms (Meta/Fb), cellular system utilization (Apple), knowledge technology (Google), and deeper participation in a transactional ecosystem (Amazon). The Ecosystem Techies are centered on a brand new section of streaming development—one which’s extra centered on bettering buyer expertise, constructing communities round universes of content material, and retaining and creating worth from their immense subscriber bases and troves of subscriber knowledge.

How Ecosystem Techies ought to use the formulation: Demand is probably the most crucial variable. Extra eyeballs translate to a bigger ecosystem. The growth of any content material can be good to have however not essential. Exclusivity is even much less vital. Ecosystem Techies are accustomed to catalysing the demand of different gamers (eg, Nostalgists and the Reigning King) to take a minimize of transactions.

4. The Promote-Facet Creators

Promote-Facet Creators spark bidding wars with their content material. One of many main examples of this archetype is Sony. As a substitute of spending billions of {dollars} to develop its personal top-notch streaming platform, Sony determined to supply its huge catalog of reveals and films—which incorporates The Karate Child, Ghostbusters, and Spider-Man—to the best bidder. Underneath a deal inked final yr, Sony’s new theatrical releases will debut in theaters first after which premiere on Netflix. After the conclusion of that first pay-TV window on Netflix, these movies will go away and take their everlasting place on Disney+ or Hulu, which Disney co-owns.

How Promote-Facet Creators ought to use the formulation: Demand and growth are crucial to Promote-Facet Creators like Sony. Earlier than promoting any content material, they need to forecast future viewership and potential sequels and reboots. Exclusivity turns into an train in promoting to the best bidder.

A brand new equation

Correct content material valuation represents a basic strategic alternative for the long run. As competitors evolves with the rise of the metaverse, digital merchandise corresponding to NFTs (non-fungible tokens), and immersive digital storytelling, firms should make sound, data-driven selections about content material and maximise the worth of each asset. In the end, the secret’s not seeing this formulation as the reply in and of itself, however slightly as one device in your strategic arsenal. When used successfully, the formulation may help dictate and body the concerns you weigh and the alternatives you make about content material acquisition and improvement.



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