Play with Netflix, bet with Disney – Economy

“Pivot!” Who doesn’t remember that wonderful moment on the TV series Friends when Ross, Rachel and Chandler try to carry a couch up the stairs and Ross yells in desperation, “Pivot. Pivot! Pivoooot!” Pivot means “turn”, but in company jargon the term also stands for the adjustment of the strategy, and that is exactly what happens with those portals that compete with sometimes unbelievable sums to be allowed to show such unforgettable pop culture moments. In the US, “Friends” is currently on HBO Max, which is paying $425 million over five years for the rights.

It was previously shown on Netflix, which initially paid $30 million a year, and even $100 million in the 2019 season. It’s been on HBO Max in the US for two years, and it disappeared from the Netflix catalog in countries like Japan, South Korea and Turkey in early 2022. In Germany it should be there for a few more years. Sounds complicated, and it is – above all, it ensures that in the streaming jungle for platforms it is now: Pivot! At Netflix, that means moving towards video games.

The group has taken over three video game developers: Boss Fight Entertainment recently for an undisclosed amount of millions, Next Games shortly before that for $72 million and Night School Studio back in September for an estimated $40 million. They brought in Mike Verdu, who was previously at Electronic Arts and Facebook. He is responsible for the video game division, where games such as an offshoot of the successful series “Stranger Things” have been available to Netflix subscribers since November.

The basic concept of marketing a pop culture phenomenon in several categories is not new. Who doesn’t remember the Indiana Jones video games or the complete exploitation of the Star Wars and superhero universes. Verdu’s strategy (“We want to create a connection for users between seasons and films to the stories they love.”) therefore sounds less interesting than what Netflix boss Reed Hastings said about the SZ in spring 2019.

At the time there were concerns as to whether that would really be enough in the long term, given the more diverse competitors such as Amazon, Apple and Disney, only relying on films and series. “We talk very often about what we don’t want to be,” Hastings said at the time: “What aren’t: live sports, news, virtual reality. Now you know exactly who we want to be.” He also said that he knew a better measure of success than just the number of subscribers: “The time someone spends on our portal. That can be measured independently and then compared, not only between streaming portals, but also between Netflix and social networks or the video game Fortnite.”

Attention Economy call it monetizing attention. “It’s about much more than pure consumption – the relationship between platform and customer has completely shifted since TV stations stopped saying: It’s happening at the time and if so many people tune in, we can charge so much for advertising breaks “, says Julia Alexander from Parrot Analytics, which advises streaming portals on strategic decisions: “The questions are different.”

Everyone is vying for people’s time

“Who creates edits on Tiktok? Who gets people excited on Twitter? How do you make individual episodes available to people who aren’t subscribed yet – but are interested in the topic? Or, for example: teenagers are spending a lot of time with creating their own content about films and series that they see on portals.” A new genre would emerge from this, and that would ensure that more people would spend more time on the portal.

All vying for people’s time, only not unsubscribing if they think they’re spending enough time on a site to make it worthwhile. Netflix (currently around 226 million subscribers) therefore wants to take stricter action against “account sharing”, in which a subscriber shares access data with others. Instead, the service wants to offer additional subscriptions at a special price, maybe even advertising. In terms of content, Netflix has identified video games, but this industry is considered extremely difficult – who remembers the products from the video game divisions of Amazon and Google? Nobody? Just!

There are already far too many streaming portals and it’s a shambles, especially in the USA. Just one example of many: Disney has the Disney+ platform, the ESPN+ sports portal and Hulu, which, like ESPN+, shows live sports and gets other content from NBC – which is its own portal Peacock owns. That pivot from Disney is now the possible entry into the sports betting business due to the many sports rights. CEO Bob Chapek recently said of this move away from the no-vices-only business, “Because of the behavior of young viewers in particular, we want to include betting as part of the experience.”

Open detailed view

For customers, the competition between the portals is initially positive. dude with a sign a successful satirical Instagram account with messages that are funny because they are true, but had already stated by the end of the Quibi portal: “Nope, we don’t need any more portals”. With $4 billion in seed capital, Quibi set out to revolutionize the industry with 10-minute videos. Above all, this showed that it is not enough to simply publish as much content as possible.

What often works, however, is the fusion of two giants into one giant. The merger of Warner Media, which owns HBO Max, news channel CNN and the Cartoon Network, and Discovery – which already offers more than 55,000 hours of documentaries and reality TV formats on the Discovery+ portal – was announced on Friday. “This could be the widest range on the market,” says Jessica Reif, an analyst at Bank of America. Sometimes it is not necessary to change strategy after all, but a lot of thrust. If someone had said that to Joey from “Friends” during the couch transport, but he really wanted: “Pivot!”.