Tag Archives: netflix

The internet is finally disrupting the traditional TV industry

The rise of online video streaming is nothing new; Netflix, Hulu, and Amazon Prime have been around for years, and YouTube has become a video behemoth. That being said, traditional TV has remained surprisingly resistant to the internet’s disrupting effects while other entertainment industries like newspapers and music have been decimated. But it looks like the TV industry is finally experiencing a major shift that will result in a major exodus of TV advertisers and cable subscribers. I explain why in this video.

Silicon Valley once steered clear of original content. What changed?

apple tv

By the time news outlets began reporting that Apple is actively negotiating with Hollywood executives to produce exclusive programming for its fledgling television platform, none of us seemed surprised that a major tech company would invest so much money in original content.

If anything, Apple is late to the party. In 2011, Netflix, which until then had been just a tech platform that allowed one to stream already-released movies and old seasons of television shows, plopped hundreds of millions of dollars into the creation of premium shows, greenlighting them before even seeing a pilot. Amazon wasn’t far behind, launching a bevy of shows to mixed reviews. In 2012, YouTube shelled out $100 million to both lure established media companies onto its platform and allow its already-existing stars to up their games. These days, not a week goes by without a major tech company announcing a major content play, whether it’s Yahoo’s resurrection of the show Community or Facebook’s offering of huge advances to YouTube stars in order to entice them onto its native video platform. Twitter recently attempted to purchase the millennial news site Mic, and prominent venture capitalists have bought huge stakes in companies like BuzzFeed, Vice, and Vox, valuing these news outlets in the billions of dollars.

Viewing all this activity, it’s hard to believe that, a mere decade ago, the tech sector considered original content anathema to everything it stood for, a vestigial hangover from the days when the barrier to entry for content production and distribution was relatively high and therefore lucrative.

Circa 2007 – 2008, the practice of creating original content seemed to be a dying profession. The music industry had been completely eviscerated in the wake of Napster and other file-sharing programs. Newspapers were well into their decline, already kneecapped by Craigslist and facing a print advertising exodus. Magazines weren’t far behind them. The book industry, while not exactly suffering, wasn’t thriving either, with most sales coalescing into a handful of conglomerates who were already bracing themselves to have their asses handed to them by Amazon. The television industry seemed relatively sturdy but most assumed its day of reckoning would eventually come.

This is when we saw the rise of platforms that were fueled primarily by user generated content. First Myspace, and then later Facebook, YouTube, and Twitter. Media companies that were suffering looked at Keyboard Cat and assumed that this was the future of content, and Silicon Valley didn’t seem to disagree. Original content was expensive and difficult to scale effectively; why hire 60 journalists to create content when you could spend that money on 30 engineers who would then build a platform on which millions of users would generate content for free?

So what changed? Why are we seeing the sudden emphasis on premium programming in a world where everyone with a GoPro seems willing to upload their videos for no payment?

Well, it turns out that original content actually is scalable, particularly when it’s hosted on the right tech platform. Netflix just announced in July that it had reached 65 million subscribers, a number that would have been difficult to attain when it was merely licensing reruns, especially as other low-cost streaming services have entered the market. And sure, it’s possible that your amateur video of cat could hit the viral stratosphere, but most don’t, whereas YouTube stars can guarantee millions of views for each video posted. The majority of BuzzFeed listicles reach at least a million views, which means that your average BuzzFeed staffer can reach an audience that’s similar in size to The Daily Show’s.

And though viewers have flocked to user-generated content, advertisers still prefer premium programming, especially if it attracts hard-to-reach demographics. The critically-acclaimed USA Network show Mr. Robot only attracts about 3 million viewers per episode, a mediocre turnout when compared to the network’s other hit shows, but it’s having to beat away advertisers with a stick. “It’s a hot property right now,” network president Chris McCumber told New York Magazine. “We have more demand than we can handle for Mr. Robot, and it’s bringing in new advertisers.” And with brands increasingly shifting budgets toward native advertising and away from display, it suddenly behooves tech platforms to have in-house content expertise.

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Finally, tech companies have discovered that exclusive content is a great way to lock users into a platform. A decade ago, there were only a handful of social networks that had the millions of users needed to effectively scale user generated content. Now let’s consider the number of platforms today that have at least 50 million active users: Facebook, Twitter, Google+, LinkedIn, Pinterest, Instagram, Snapchat, Tumblr, WhatsApp, Foursquare, YouTube, Flipboard. I’m likely just scratching the surface.

We now have dozens of networks competing for our attention, and our loyalty to any one platform is tenuous at best. Exclusive content, even if it makes up a relatively small percentage of the content posted to the platform, gives us that much more incentive to choose one platform over the other. Medium, the blogging platform launched by Twitter co-founder Ev Williams, employed this strategy well when it hired top-tier freelance journalists to write on its network before opening it up to the masses (I and call this the “mullet strategy”). Of course, nobody has capitalized on this approach better than Netflix, which is now spending north of $700 million on content you can’t watch without a Netflix subscription.

The question now is how traditional media companies, many of which have been producing original content for decades, will respond. Already we’re starting to seeing seismic shifts in the media landscape, whether it’s HBO launching a standalone app or magazines like Forbes transforming themselves into platforms. News companies are also inking content distribution deals on platforms like Facebook and Flipboard with promises of revenue sharing.

Perhaps the late David Carr was right when he said, in 2012, that “big news is still the killer app,” by which he meant original content. Given how much we keep hearing about the current “golden age of television” and the rise of millennial-focused news companies that are reaching billion dollar valuations, I can’t help but agree. A new dawn is upon us, and if you’re a content producer like myself, then take a few moments to rejoice.

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Why HBO Now’s launch will be great for Netflix

hbo vs netflix

Back in 2012, I interviewed Jake Caputo, a web designer who had a novel idea for how to convince HBO to launch a standalone subscription service that didn’t require a cable package. Instead of simply voicing his wishes, he created a website called TakeMyMoneyHBO.com. It provided a helpful Twitter widget that allowed one to tweet out how much money you would pay for such a service. Because the widget also generated an associated hashtag and a link back to the website, it quickly gained a critical mass that allowed HBO executives to witness, in real time, how much money they were leaving on the table by continuing to require an expensive cable subscription as a prerequisite for HBO.

Well, Caputo finally got his wish (and was even featured in an official HBO ad for his troubles). Late last year, HBO announced it was launching a standalone service, called HBO Now, and the product debuted in April. Almost immediately, the service was declared to be a direct competitor to Netflix, a narrative that was foreshadowed in 2013 when Ted Sarandos, Netflix’s chief content officer, told a reporter, “The goal is to become HBO faster than HBO can become us.” Netflix, the thinking goes, has always positioned itself as a competitor to cable, and so HBO Now will serve as an alternative for those wanting to cut the cord. This idea that the two are competitors is considered such conventional wisdom that Netflix’s shares dropped 3 percent immediately after HBO’s announcement. When Netflix CEO Reed Hastings claimed he didn’t consider HBO a threat, Wired responded with “Yeah, right.”

But HBO is only in competition with Netflix in the sense that it competes for attention, so technically it’s competing with just about any form of media, whether it’s newspaper subscriptions or music downloads. But there’s virtually no overlap in HBO programming and Netflix programming, which means there’s not only little redundancy for those subscribing to both but also these two companies are not bidding for access to the same programming, which would drive up the price of said programming (I would say Amazon Prime is much more of a competitor to Netflix on this front, since they’re likely bidding for quite a few of the same shows and movies).

Also, HBO Now will give many hangers-on to cable just the kind of excuse they need to finally cut the cord, and with joint Netflix and HBO Now subscriptions they can get access to many of their favorite cable shows and the Netflix/HBO original programming at a fraction of the price of what they were paying for cable. Currently, the average cable bill is $64, with many paying upwards of $100 per month. With Netflix’s $8.99 monthly subscription and HBO’s $15, a cable subscriber is looking at a minimum 62 percent savings if he cuts the cord and subscribes to BOTH Netflix and HBO.

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If anything, HBO’s threat to Netflix lies in its ability to push other cable networks into launching standalone apps. As Nelson Granados noted in Forbes, immediately after HBO announced HBO Now, CBS announced their own app. Because Netflix licenses content directly from networks like CBS, these networks will be motivated to drive up prices or rebuff Netflix completely once they’re in direct competition with the company.

Of course, Netflix hasn’t been resting on its laurels and has taken aggressive action in building its own content moat in order to shield itself from the capricious actions of frenemy cable networks.  As the New York Times reported, the company has tripled its original programming in just the last year. Just as we now consider Netflix’s mail delivery DVDs to be the vestige of a bygone era, harking back to the days of movie rental stores, it may not be long before its aggregation of old television shows is viewed as similarly anachronistic. Where once there were seasons of Twin Peaks and Friends, a million Frank Underwoods and Piper Chapmans will bloom.

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How Facebook is trying to pull a Netflix

Facebook-drives-traffic

Those following the ongoing travails of the digital journalism industry have likely read by now that Facebook has been making direct overtures to news companies — many of which rely overwhelmingly on the social network for traffic — arguing that because their mobile sites offer an inconsistent (read: terrible) user experience, they should host their news content within Facebook’s ecosystem. In return for this handover of content, Facebook will share the revenue for any ads it sells against it.

Unsurprisingly, many have come to regard this offer as a Faustian bargain, one that will give Facebook even more power over news publishers until it can leverage that power to make them obsolete. Writing for The Awl, John Herrman argued that these publishers will give in by rationalizing the move as mere diversification of revenue.

Handing over a major source of revenue—not to mention analytics and audience data and the establishment of boundaries—to an outside platform might sound like a risky transfer of power. It would be! But a publisher might be able to dismiss that concern by pointing out that many publishers are already dependent on vendors and ad agencies they don’t control, rather than directly negotiated advertising deals, and that the industry seems to be moving further in that direction, and besides, platform anxiety didn’t really stop anyone from trying iOS apps, right?

It’s easy to detect a heavy dose of skepticism in Herrman’s writing — he’s been a longtime critic of the viral content mill born in part to suck more traffic out of Facebook — but this wouldn’t be the first time media companies will have handed over large amounts of valuable content to another platform: in fact, Netflix’s entire business model is based on just this sort of transaction, and yet so far it has only added to media companies’ bottom lines, providing an additional source of revenue generation.

When television networks syndicate the rights to their programming to Netflix, they’re sending it into a black box where they can extract no user data — all that goes to Netflix — and at the same time they’re giving cable subscribers that much more ammo to cut the cord and just consume media from Netflix. But so far, TV companies have not been hit as hard financially as other forms of media, including record labels and newspapers. For one, they’ve diversified their holdings, launching multiple channels across the cable dial (Fox owns Fox News, FX, and FXX). Also, Netflix has received competition from the likes of Amazon, Google Play, and Hulu, both in terms of viewers and for the rights to TV shows. And now we’re seeing some channels launch their own standalone streaming apps. For the longest time you still needed a cable subscription to access them, but, with the launch of a standalone HBO Go app, we’re likely to see others try out subscription services outside cable.

In fact, news publishers can learn a lot from how TV companies approach streaming services like Netflix and Amazon. For one, they don’t hand over the entirety of their content offerings; you’ll find plenty of NBC shows on Netflix but far from its entire roster. News publishers could set aside certain stories for Facebook while publishing many others exclusively on their websites. TV networks also produce some kind of delay between when a show airs on cable and when it’s available on Netflix — this helps prevent them from cannibalizing their lucrative cable audience. News publishers could also delay uploading content to Facebook, giving its web version a headstart in collecting readers.

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Most important, TV companies ensure their audience isn’t dependent on just one platform. Their stations are available on cable, satellite, antenna (if they’re one of the main broadcast neworks), Hulu, Netflix, Amazon, and their own websites and streaming apps. Though Facebook is certainly the most powerful of social networks, there are still large userbases present on major platforms like LinkedIn, Pinterest, Twitter, Email, Flipboard, and YouTube. Not to mention their ability to create their own standalone-apps for smartphones.

So while it’s healthy to show some skepticism (as I have) when entering any kind of content partnership with Facebook, it’d be foolish to ignore the collective power of Facebook’s engineering base and its success monetizing mobile users, especially as display advertising, the main revenue source for news publishers, performs so poorly on mobile. Turning away that revenue may hinder Facebook from gaining even more monopoly power over the internet, but it could just as easily mean cutting off your nose to spite your face.

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Why YouTube is much more disruptive than Netflix

Netflix-vs-YouTube

You have to give Netflix its due. It began as a mail-order video rental service, then pivoted to a mail-subscription video service. In just a few years it decimated the video rental industry, leaving Blockbuster a bankrupted carcass. But instead of standing and gloating over its spoils, it quickly recognized that the future of home television consumption was via internet streaming and began securing the streaming rights to hundreds of television shows and movies, all of which were grateful for the extra revenue. Then, when other corporate giants began moving in on its turf — Amazon Prime, Hulu — driving up competition for streaming licensing, Netflix decided to make itself indispensable and invested in expensive, high quality original content that would lock users in. It’s clear that the company is innovative and has forced the slumbering cable industry to react; it’s unlikely that HBO would have committed itself to a standalone HBO Go service if it weren’t for Netflix. And when the history of cable is written it will be credited for being a major impetus for millions of consumers to cut the cable cord (though I have to agree with Ben Thompson that the “great unbundling” won’t happen nearly as quickly as people think it will).

But as much as Netflix has impacted the television and cable industry, you have to admit that the more it has pivoted, the more it has begun to resemble a traditional cable network. Many networks, for instance, syndicate reruns of shows (why you’re still able to see episodes of Seinfeld despite it being off the air for more than a decade) while producing a steady stream of original programming. Netflix’s licensing of shows is its own version of syndication. And as Netflix has moved toward this more traditional model, it’s found more competition encroaching on its user base. As James Surowiecki wrote recently:

Once content providers saw how popular streaming was becoming, they jacked up the price of their content. Netflix’s success also attracted new competitors to the market (like Amazon), and encouraged existing competitors (like HBO) to invest more in streaming. “The calculus here is simple,” Ulin told me. “There’s lots more competition for viewers. That means it’s harder to get content. And the content you do get costs more.” In the past few years, Netflix has lost thousands of movies as licensing deals expired, and this year it will pay at least three billion dollars for content.

When journalists write about cord cutting and cable unbundling, they often cite Netflix as the catalyst for this industry shift. But there’s another company, I think, that both cable companies and networks should worry about more: YouTube.

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Nextflix may be producing a few of its own shows, but the majority of its money is still going into the coffers of network television companies. AMC may be losing some cable subscribers to Netflix, but then Netflix is at the same time paying millions of dollars to license Breaking Bad and Mad Men. YouTube, on the other hand, is producing millions of hours of programming outside the television ecosystem,  and though it has played around with various licensing deals with traditional television companies, the vast majority of its viewership is on non-television videos. Even worse, it’s seeing some of its strongest growth with teenagers and is conditioning these future cable subscribers that a world without cable is not only possible, but preferable. Witness the hordes of screaming teens who mob YouTube stars at online video conventions.  These are YouTube personalities that you and I have never heard of, and yet they have millions of subscribers and television channels are clamoring to give them their own shows. In some cases, they’ve rejected lucrative TV offers because they can make more money on YouTube and enjoy more creative freedom.

Because of this homegrown talent and programming, YouTube faces massive growth potential. Netflix is projected to hit $5.5 billion in revenue with its 37 million U.S. subscribers. Its CEO hopes to eventually reach between 60 and 90 million subscribers, after which its revenue will have presumably doubled to $11 billion. YouTube, on the other hand, is projected to reach $7 billion in 2015, and Bernstein Research thinks it’ll reach $30 billion in annual revenue within just a few years. YouTube also has a much more impressive lead over its competitors than Netflix. As Quartz reported, “Facebook says it gets 1 billion video views per day. YouTube had 4 billion views per day back in 2012, and has grown significantly since then.”

All these numbers don’t get at YouTube’s real strength, which is that it’s a hotbed of user generated content and therefore brewing its own homegrown talent. And because it’s built like a social network, it sees much more engagement with its users. YouTube comments may be a cesspool, but content creators have much more intimate relationships with their audience than television or movie stars.

So yes, cable and television industries, worry about Netflix. Devise ways of offering better streaming services so customers can consume your content on multiple devices. Improve your great television programming. But while you’re busy duking it out with Netflix and Amazon Prime, don’t ignore the rising giant that is quickly convincing many of your future customers that they don’t need you and never will.

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Why a standalone HBO option might not be a great deal for consumers

hbo go

In June 2012, a web designer named Jake Caputo launched a website called TakeMyMoneyHBO.com. The concept was simple: Visitors could enter the amount of money they’d be willing to pay for a standalone HBO Go account and the website would tweet out that amount with the hashtag #takemymoneyHBO. I don’t have access to any data for what amount users tweeted out on average, but I’d be willing to bet a fair number of them named a price somewhere between $8 and $9 a month. Why that range? Because that’s about what users pay per month for Amazon Prime ($8.25), Netflix ($8.99), and Hulu Plus ($7.99).

But when HBO finally launches a standalone HBO Go subscription next year, as its CEO Richard Plepler recently promised it would, it’s likely to set its subscription price 75 to 100 percent above that $9 threshold.

Even if it wanted to compete with these other streaming services on price, HBO likely doesn’t have a choice in the matter. Currently, nearly 30 million households purchase HBO add-on subscriptions to their cable packages, resulting in $5 billion in revenue and $2 billion in profit for the channel. And what do these add-on cable packages cost? An average $15 a month, according to the Wall Street Journal. With cable companies responsible for the majority of revenue going into HBO’s coffers, they’re unlikely to sit idly by and allow HBO to undercut its own cable package, thereby giving more encouragement for consumers to ditch their expensive cable subscriptions. In fact, as noted by that same WSJ article:

The average monthly cost for an HBO subscription is about $15, and the fee for the new service isn’t expected to be any cheaper than that, according to a person familiar with the matter.

I wouldn’t be surprised if the standalone HBO Go subscription is north of that $15 subscription, since cable companies will argue that it’s an “unbundling” and that cord cutters shouldn’t get access to the bundling price.

The problem for HBO is that consumers have been trained for years to think a streaming subscription service should cost between $8 and $9. How sensitive is that price point? Well, look at the bellyaching that erupted when Amazon Prime raised its prices from $6.50 a month to $8.25.

According to a survey conducted by Brand Keys, which measures brand engagement and customer loyalty, Amazon’s rating fell from 93 percent to 83 percent in the two days following the price hike.

Netflix faced even bigger problems when it hiked its monthly price by a dollar. On Wednesday, its stock tanked when it announced that its subscriber growth in the last quarter had slowed.

The company is blaming its $1 price hike in May, which raised the cost of a subscription to $8.99 per month. “As best we can tell, the primary cause is the slightly higher prices we now have compared to a year ago,” management said in its letter to shareholders. “Slightly higher prices result in slightly less growth, other things being equal, and this is manifested more clearly in higher adoption markets such as the US.”

What’s more, HBO has already cannibalized its own fanbase by handing over many of its old shows to Amazon Prime for a reported $300 million (I’ve been enjoying rewatching The Wire on my Prime account). One of the draws of HBO Go is that you’re allowed access to the entire back catalog of old HBO shows. How many consumers will pay $15 to $20 for an HBO Go account when they’re already paying $8 for a Prime account that gives them access to most of HBO’s back catalog, a bevy of non-HBO shows and movies, and two-day free shipping of all Amazon orders?

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Ironically, this move may be a boon to Netflix, due to what economists call agglomeration. Why do so many New York jewelers congregate in close proximity to each other when it would seem smarter to branch out into geographic locations with less competition? Because by setting up close to each other, the Diamond District becomes a destination spot for shoppers, attracting many more buyers that more than make up for the increased competition.

So while HBO Go might be now competing with Netflix, it is also incentivizing millions of cable subscribers who were thinking about cutting the cord but unwilling to part with their Game of Thrones watching to finally make the leap. With many of those cable subscribers paying upwards of $100 a month, paying $20 for HBO and an extra $9 for Netflix still saves them $70 a month. And those users are more likely to subscribe to Netflix instead of Amazon Prime since they won’t need access to Prime’s HBO shows.

Don’t get me wrong; there are probably plenty of hardcore HBO fans who are more than willing to pay $20 or higher for HBO Go. But for the rest of us, the people who may like Veep or want to rewatch old episodes of The Sopranos? Well, many of us are already “borrowing” HBO Go passwords from our parents, neighbors, and friends. And looking at a price tag that’s twice the cost of Netflix, it might be too tempting to continue mooching off Mom and Dad a little longer.

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Jeff Bezos is busy building moats

bezos

Amazon founder and CEO Jeff Bezos has made a number of puzzling moves lately, business deals that have left analysts struggling to understand how they will ever make money. Chief among them was his decision to buy the Washington Post, a purchase that made many media watchers hopeful that he had thought up a revolutionary new model for profitable journalism. But, a year later, the results are mixed, and his most aggressive move so far with the Post was to develop an app that will come pre-installed on new Kindle Fires.

Amazon Prime is another example. For roughly the price of a Netflix subscription, you not only have access to a wide library of free shows and movies, Amazon has aggressively developed its own programming and dropped $300 million to get access to old HBO shows. What’s more, for that same price you also get free, two-day shipping for all Amazon orders. The profit margin on that monthly subscription cannot possibly be substantial.

And does the company really want to get into the same-day grocery business, an extremely low margin industry?

But there’s another corporate behemoth that has moved aggressively into new product categories without any near term plans to monetize them: Google. Google Drive doesn’t charge anything to the vast majority of its users (though it does have paid business versions). Google Maps sells no ads. Neither does Google News. Its executives have hinted that it may never place ads on Google Plus. Android, the most popular mobile operating system, is free to install. Chrome? Same thing.

But there’s a reason that Google pours billions of dollars into creating products that have little monetization potential, and it isn’t because the company is feeling charitable.

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In a brilliant 2011 essay titled “The Freight Train That Is Android,” Bill Gurley explained how these free products are meant to do one thing: protect Google’s lucrative search advertising business:

So here is the kicker. Android, as well as Chrome and Chrome OS for that matter, are not “products” in the classic business sense. They have no plan to become their own “economic castles.” Rather they are very expensive and very aggressive “moats,” funded by the height and magnitude of Google’s castle. Google’s aim is defensive not offensive. They are not trying to make a profit on Android or Chrome. They want to take any layer that lives between themselves and the consumer and make it free (or even less than free). Because these layers are basically software products with no variable costs, this is a very viable defensive strategy. In essence, they are not just building a moat; Google is also scorching the earth for 250 miles around the outside of the castle to ensure no one can approach it. And best I can tell, they are doing a damn good job of it.

How does this apply to Amazon? Let’s say that a well-respected brand like Netflix decided it wanted to move into other kinds of content besides movies and television. Like, say, ebooks. Suddenly the Kindle Store, and Amazon’s vice-like grip on the ebook industry, is under threat. Or what if personal food delivery apps like Seamless decide to expand their product offerings? Then it may start eating into Amazon’s e-retail offerings. And if the Washington Post app and Amazon Prime’s video offerings can sell a few more Kindle Fires, then he’ll have a more direct line between the customer and the Amazon ecosystem of products. By encroaching into the spaces of other industries, Bezos keeps those other industries from finding cracks in the walk with which to encroach on his main cash cows. And once he has firm moats around his main profit castles, he can start increasing the price on those castles, capitalizing on competitor-free profit margins. The more power he holds over the ebook industry, for instance, the more authors he can direct away from traditional New York publishers and into Amazon’s internal publishing platform, where Amazon takes between a 30 and 70 percent commission on all sales.

Seen this way, Bezos is more concerned with future competitors who are nipping at the edge of his margins than traditional retail companies trying to move into his space. He’s cornered the e-retail market, now he’s simply scorching the earth around it.

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Why isn’t Amazon’s TV programming taking advantage of binge-watching culture?

There are a number of ways that Netflix is upending the traditional approach to original TV programming, but perhaps its most radical move has been its decision to release entire seasons at once rather than the weekly drip-drip-drip airing of episodes that’s the norm for the rest of the TV industry. Recognizing that we have become a binge-watching culture, Netflix understands the marketing value of allowing a consumer to soak up a bunch of programming at once so that he or she can then go on to evangelize the series to other would-be fans. So why is Amazon eschewing this same strategy with its own original programming?

 Unlike Netflix Instant users, Amazon Prime subscribers do not get every episode of Amazon’s original shows all at once. Their pilots are made and then crowdsourced; they move forward with the most popular ones once users have seen them.

Although this is a direct approach of gaging reactions, things get a lot more complicated from there.

Once users have selected the worthy pilots, Amazon commissions a whole season. Then, they make the first three episodes available to anyone with a compatible device, and make the rest available exclusively to Amazon Prime members. However, even Prime users have to wait to watch every episode, since after the first three, they release the rest one week at a time.

Confused yet? You’re not the only one.

At NPR, Eric Deggans recalls seeing John Goodman on The Daily Show to promote Doonesbury creator Garry Trudeau’s Alpha House. “That strategy doesn’t seem likely to feed binge-viewing appetites the way Netflix does,” Deggans said. “Alpha House seems more like a well-crafted perk for those who already subscribe to the Amazon Prime service.”

Even the show’s stars don’t necessarily understand how the process works, as Goodman revealed during a recent stop by The Daily Show. “I don’t know,” Goodman said sheepishly, when host Jon Stewart asked how to see the show. “I’m selling their product…I’m just a cog in their machine of world domination.”