Distributors Are Smart To Become Content Producers
Snapchat took another step toward diversifying its business model recently, as the technology platform company hired Sean Mills to head up their original video programming efforts for them. This comes after they hired the journalist Ellis Hamburger in November to handle original reporting. Some very smart people have decried these moves as a huge mistake that will almost by definition drain the value from the fast-growing network.
Recently, platforms have been getting much more aggressive in offering media companies easier ways to publish content on their networks, which is allowing them to garner quite a bit of power over publishers. For this reason, I agree wholeheartedly that media companies cannot afford to build their businesses on someone else’s back (as I argue here). However, platforms creating (or commissioning) their own content indicates that they too are concerned about the balance of power: they don’t want to let publishers reap all the benefits of running content through their systems. In essence, they are hedging against letting media companies become the only stars they promote. The platforms want to ensure that they keep their options open so they can take advantage of their own channels and not be relegated to the role of proverbial dumb pipes.
The debate around the relative importance of content versus distribution has raged for decades. These platforms are smartly investing in both. While it is by no means easy to create content (particularly good content), it is especially hard to create large, powerful distribution channels. Most content creators reach their audience across multiple avenues, but they don’t have exclusive access to the massive audiences that companies like Snapchat or Facebook do. Content may be king; distribution is the ace. It is therefore easier for Snapchat to work to find content to run through its “pipes” than it is for a content company to create its own.
In fact, many platforms have been successful in their forays into professional content creation. For example:
- Netflix launching wildly popular series, such as House of Cards and Orange Is The New Black
- Hulu bringing over ten original series to market, such as Moone Boy and The Awesomes
- Amazon creating award-winning series like Transparent and Tumble Leaf
- LinkedIn launching its original content initiative
- Facebook building out Facebook Mentions
- YouTube investing heavily in bringing on creators of original content
- Google launching Spotlight Stories on Android
Another example of this is the broadcast networks (also distribution platforms), who are more and more often creating their own shows instead of commissioning them from others. This not only allows them control over the content but provides an additional revenue stream if they can syndicate them over time.
Churning out popular content isn’t easy. It requires a baseline commitment of time, money and patience. Beyond that, it needs to match the platform on which it is carried. Video series on Netflix or business articles on LinkedIn make sense; entertainment content on Twitter or Tumblr is incongruous since the audience isn’t there to consume that type of content, which is why these companies’ forays into creating content hasn’t fared well.
However, there are enough examples of distributors figuring out how to create appropriate content for their audiences that many of them stand a good chance of success as they try to compete on both sides of the media world. This is a smart (and potentially necessary) strategic development for them as they seek to drive even more return visits and time spent on their platforms. Controlling distribution is a great business. Adding content that flows through it can only help.