Content Consumption in the SVOD Era (Or How I Learned To Stop Worrying And Watch Essentially Identical Shows Repeatedly) - Part 2

NOTE: THIS IS "PART 2" OF AN ARTICLE THAT I WROTE, THEN LOST, THEN WROTE AGAIN. THIS IS PROBABLY A POOR FACSIMILE OF THE ORIGINAL, BUT I COULD BRING MYSELF NOT TO COMPLETE IT. TAKE THAT FOR WHAT IT'S WORTH.

In part one of this article (which, as noted, I had to write twice because I lost the first draft to an internet black hole), I covered some ways that the more from broadcast and theatrical to digital were changing consumption habits. In part two, we’ll examine some other repercussions, starting with how acquisition decisions (and, thus, development decisions) will be altered by the shift to digital.

Acquisition Decisions in the New Paradigm

In part one I speculated that the move to digital (and accompanying removal of restrictions around "programming slots") will shift the emphasis of programming and acquisitions execs to genres that they know have a loyal and built in audience - which is then compounded by modern algorithmic recommendation engines. So how else might programming decisions be shaped by these changes?

I believe that one of the casualties of the new paradigm will be the so-called “prestige drama.” Over the past twenty years, HBO has built a brand by producing a small number of incredibly diverse, but mostly exceptionally good prestige dramas. In recent years, the ante has been raised by the new willingness of “movie stars” to appear on television for the right project (and the right price) – especially if it’s a limited series that does not require a multi-year commitment. Thus, we’ve seen Oscar winning actors appearing in lead roles in the likes of Big Little Lies and Homecoming, something that would have been virtually unthinkable in the ‘90s. The recent "peak TV" years have undeniably creating a boom in prestige drama.

The challenge with prestige dramas is that they are extremely expensive to produce due to the high fees involved and the large below-the-line costs (especially for period pieces), and they don’t necessarily have an automatic built in audience in the way that, for instance, superhero shows do. Moreover, as opposed to ten years ago when HBO did not have a lot of competition, now there is a tremendous amount of competition to secure talent and attract audiences. Thus, even if a prestige drama has excellent reviews and an A-list cast, that may not be enough to allow it to cut through the noise and find an audience (I’d argue that even something like The Morning Show with its eye-opening cast failed to make the impact that Apple expected). In such event, a prestige drama can more easily become a significant failure than other forms of less expensive content – and even if you have a hit, replicating it with the next series is extremely difficult, because there tends to be little tonal or topical continuity between prestige dramas. Even star actors cannot necessarily insulate against this – as audiences become more accustomed to seeing movie actors on television, the allure may wear off and the competitive advantage of casting movie actors may erode. Moreover, I’d suggest that - in any event - younger audiences are simply less enamored with “movie stars” than older viewers.

For multiple reasons, we’re not going to see prestige dramas go away altogether. An extremely well produced prestige drama (such as Succession, or the first seasons of True Detective or The Handmaid’s Tale) may still be the very best thing to drive the cultural conversation and cause audiences to sample an SVOD platform. But make no mistake, it’s the reality television, horror movies, science fiction series and true crime documentaries that will keep them there – even if the overall quality and originality of those productions is significantly lower.

Looking Globally

When we talk about changing viewing (and content development) trends in the digital era, we have to also consider the importance of having a global perspective. It’s no secret that most of the premium platforms, led by Netflix, have been investing heavily in content tailored for local markets. As a result, on Netflix one can watch versions of the reality tv series The Circle tailored for French and Brazilian audiences as well as the US, and on Hulu, there are versions of Love Island created for multiple different markets. Netflix has even tried applying this concept to scripted with the series Criminal, which has versions in four different languages (all shot on the same set to save money).

The approach with these global formats is very similar to that outlined above. Each localized version will presumably find an audience in its own territory, and then there will be superfans who watch multiple localized versions irrespective of language (I have a colleague who will remain unnamed who has watched every season and version of Love Island). Everything being equal, a fan of a format who enjoyed the US version will pick watching, say, the British or Australian version over an unrelated program to which they have no existing attachment.

When you combine the concepts, you can see why it might make sense for SVOD platforms to prioritize genres, such as horror and reality, that have a core base of devoted fans, and lend themselves to localization. There is a reason why, when one sells a movie or show to a digital platform, the platform usually wants to control format and remake rights in all languages and territories. It allows them to essentially produce the same show or movie multiple times for different audiences (and, sometimes, the same audience). And by releasing a steady stream of targeted content, platforms encourage audience to keep their subscriptions on a month-by-month basis.

Catalogue Unicorns

As we examine the new content paradigm, it’s worth remembering that there are a small number of entertainment properties that are virtually priceless. In television, two come immediately to mind: Friends and The Office (US). Those “unicorns” are so beloved that many viewers will maintain a subscription to a service primarily to preserve access to those shows. They are rewatchable, globally appealing, and have entered the cultural lexicon. And there are very few of them.

When I think about those very immensely valuable catalogue titles, I think about another sector of the music business: music. Every year, the list of top touring acts is substantially dominated by the same acts – such as U2, Paul McCartney, Coldplay, Springsteen, Bon Jovi, The Rolling Stones, Fleetwood Mac (well, whichever members are on amicable terms at that particular time), Queen (albeit without Freddy). These bands all have something in common – they became popular during an era when record labels spent an enormous amount of money and energy creating global stars and ubiquitous radio hits (and, to be honest, they’re mostly bands that were prominent in the ‘70s and ‘80s). In the streaming era, it is far harder to create those kinds of enduring, global brands, because distribution is more fragmented and the economics don’t work. Beyonce, Taylor Swift and Ed Sheeran aside, it’s hard to see where the next generation of enduring stadium acts is coming from.

I feel similarly about television hits. It’s hard to describe how popular Friends was. Growing up in the UK, it was a colossal hit during its initial run and I would suggest that there are many countries in the world where Friends has been exhibited somewhere on television almost every single day for the last twenty years. In today’s fragmented world, I don’t see where another Friends or The Office is going to come from and, accordingly, it’s likely that those shows will continue to hold their value for a very long time indeed. The closest we’ve had to a ubiquitous global hit over the past decade is Game of Thrones, but it’s much harder for viewers to repeatedly view handpicked favorite episodes as “comfort food” with a heavily serialized show, and moreover, Game of Thrones essentially destroyed its value as a catalogue piece by failing to give fans an ending that they deemed satisfying.

I’m not suggesting that it is impossible to create a four quadrant hit in today’s world, but it’s extremely difficult, and it’s certainly not the safest strategy for programming executives.

What About Comedy?

While writing this article (well, both versions *facepalm*), one question kept echoing through my mind: what about comedy? I’m very well aware that when I suggest that companies developing or acquiring content focus on genres with well established and loyal fanbases, I’ve barely mentioned comedy at all. I have mixed feelings about that. On the one hand, it’s an old cliché that comedy is very culturally specific and doesn’t travel internationally. I’m a British national who thinks that Peep Show is the peak of comedy television, and I’d rather pull out my own toenails than watch a CBS broadcast sitcom. On the other hand, many of the most popular global entertainment properties are comedies (the aforementioned Friends and The Office, Adam Sandler movies).

Comedy is really hard. Perhaps the most difficult genre of all. Even reuniting previously successful elements is no guarantee of success (see, for example, Space Force). My sense is that comedy is going to shift to become more niche and algorithmically targeted as well, rather than seeking to do broad series like Two and a Half Men (a show that I’m not sure would get made today). But I’m not sure. This is probably a question that requires somebody much smarter than me to answer it.

So What?

So, assuming that these observations have some validity (and hey, I’m only a lawyer), what do they mean for companies developing content, and companies acquiring content? Well, I’d suggest that there are a few observable best practices:

-       Target genres and subgenres that have been demonstrated to perform reliably on subscription services. Reality soap operas, horror, true crime, superhero, anime, YA.

-       Put less emphasis on originality and don’t be too concerned about distinguishing movies from existing content. It’s far less important in the digital era. In an algorithmically-driven world, making your show or movie similar to an existing hit makes it more likely to be successful, not less so.

-       Don’t hang your hat solely on prestige dramas. They’re expensive and increasingly cast-contingent. Moreover, it's very hard to parlay a prestige drama's audience to another production - and keeping the audience in the subscription ecosystem is all that matters today.

-       HBO thrived by releasing six incredible shows per year. Netflix thrives by releasing six "good enough" shows per week.

-   To the extent you want to develop prestige, key it to a genre that works on SVOD. For example, murder mystery or horror.

-       Control budgets where possible.

-       Productions with foreign format/localization potential are valuable.

-       Think about your endings (more about that tomorrow).