Netflix continues to maintain its lead in professional video streaming content. YouTube maintains its crown on the amateur and prosumer side. One area where YouTube has captured the professional music video side streaming space. Who cares?
592,000,000 viewers of “Look What You Made Me Do” seem to give a care.
Netflix is not the place you go to watch music videos. Not a problem right?
Before we get into philosophical discussions about the difference between YouTube customers, Netflix viewers and music versus video content, business, and economics; let’s elevate to a higher vantage point.
Looking out at the barbarians at Netflix’s gate you see Amazon, Apple, and Google. The 3 horsemen of tech competition Apocalypse.
Video consumption is experiencing a massive diaspora
Content is being consumed on TV’s, tablets and mobile phones. Netflix is doing pretty well there. They have good apps and it is a rare SmartTV or video dongle that doesn’t come with Netflix pre-installed. They even have brokered a deal with Comcast to allow for simple Netflix access using a Comcast remote.
Automobiles are slowly migrating to smart dashboards. Apple CarPlay and Google’s Android Auto are trying to take over the OS for your next vehicle. Expect Netflix to secure a spot on these dashboards, but also expect Apple and Google to encourage users to use their own content services.
Alexa, Apple HomePod and Google Home
“Alexa, play Game of Thrones season 6, episode 3 on the Samsung TV”
We are not there yet. With Amazon, Google and Apple looking to own the home voice assistant controller for your home, the above experience will happen.
TV shows are proprietary, whereas movies are more commoditized. Let’s consider a better example.
You: “ Alexa, play Wonder Woman, the movie, on the LG TV”
Amazon’s Prime has a similar movie library to Netflix. If Alexa sees that Amazon Prime offers the movie, it would be natural for her to stream from Amazon by default.
Even if Alexa were to serve from Netflix, the data set of what movies and TV shows are being requested via Alexa is valuable intel.
Amazon could aggressively pursue streaming rights for movies and TV shows that are frequently requested on Netflix.
Alexa is the home stereo
Since we started using Alexa, we rarely use Pandora or Spotify in a group setting. We have become an Amazon Prime Music house. The Amazon’s music streaming is sufficient. Not as good as Pandora, but close enough.
Amazon has gone from non-existent to our top music streaming choice. On the video streaming front, they are a distant third place to Comcast On-Demand (#1) and Netflix (#2).
Alexa as music video lean-back experience
We do sometimes listen to music via Comcast On-Demand, but less so now we have Alexa. If Alexa could push music through our TV, it would nice if Amazon streamed the artist’s official music video. If no official video exists, the service can stream the artist facts and photos like Comcast’s music channels.
As we lean back to our music videos, Amazon has an opportunity to educate customers about interesting video content on Amazon Prime. From digital display ads, a viewer could interrupt the music video and play a movie trailer or TV series promo featured in the ad.
“Alexa, play the trailer for Guardians of the Galaxy 2.”
Pandora needs a friend
Pandora is finding the Apple Music, Spotify, YouTube, Amazon Prime Music landscape less that convivial.
Netflix’s market capitalization as of October 18, 2017: $84.4 Billion
Pandora’s market capitalization as of October 18, 2017: $1.86 Billion
Pretty much a rounding error for Netflix to gain 77 million music listeners.
What you watch and what you listen to are linked
Netflix is a data junkie. Pandora’s thumbs up/thumbs down system provides real-time music preferences for their customers. Imagine what valuable customer preferences Netflix can learn by capturing and analyzing Pandora’s data set.
Sirius XM had no commercials until they did
In the beginning, Sirius and their rival XM promised, “Read my lips, no more commercials.” When Sirius XM (the two companies merged) realized that content providers such as sports, news and talk shows were not viable without ad-support, well you can figure what happened next.
Commercials on Netflix? Why not? If Netflix extends to include news, sports and music videos, it is only natural to consider ad- support for this content.
Amazon and WashPo
Yeah, technically Jeff Bezos owns WashPo, but, ya know.
It may seem incongruous to have a news station from a digital streaming service, but this is already happening. In our household, my wife’s top Alexa request is to listen to KQED, our local NPR station. If Bezos chooses to build WashPo into a streaming powerhouse, it could capture viewing and listening hours that are currently going to other sources. This could add value to the Amazon Prime service and offer a compelling addition or alternative to Spotify and Netflix.
The Content Battlefront
The key contenders for video streaming are:
a) Netflix: current champion.
With its massive investment in original content, Netflix is providing tremendous value against far pricier cable competitors.
b) YouTube: youth champion.
All those teens glued to their devices and earbuds are likely watching YouTube as they ignore their parents. YouTube is moving upstream and hoping to get young fans to upgrade to a premium plan. As YouTube customers get older and more affluent, will YouTube Red be a must have service?
c) Amazon Prime: ambitious, fast-follower.
Bezos is unpredictable. He rarely does things is a quiet way. He has already put many pieces together to pursue the streaming content market. Kindle, Kindle Fire tables, FireTV and Alexa are the digital access devices. Amazon Prime and the Washington Post are his current content plays. He is investing heavily in bringing Amazon up to par with Netflix’s original content. Netflix has successfully deflected this challenge and is showing strength and momentum with their studios. Amazon has yet to deliver a must-watch series, but one “Game of Thrones” or “Sopranos” can change their fortunes quickly.
d) AppleTV: late start, but strong distribution.
Apple proved that its branding and distribution is a powerful combination. They have quickly gained on Spotify in the streaming music arena. Now, they are working on original video content. The streaming video segment is far more challenging for Apple. Unlike music where Apple, Spotify, Amazon, Google and Pandora have pretty much the same catalogs, video content producers have been much more careful when authorizing digital rights. Additional, as HBO and Netflix have shown, original content is the key to video streaming subscriber attraction and retention. At this point, Apple has the hardest path of the contenders to catch Netflix. iOS is a major force. If Apple does solve the original content riddle, they will be able to enter the fray rapidly.
Stay tuned. The battle of titans is just getting started.
