PARQOR is the handbook every media and technology executive needs to navigate the seismic shifts underway in the media business. Through in-depth analysis from a network of senior media and tech leaders, Andrew Rosen cuts through what's happening, highlights what it means and suggests where you should go next.
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Last Friday I built an essay around a quote “Built to Fail”, a book on Blockbuster Video’s rise and fall. In that book, we learned the rental video market under Blockbuster changed the economics of movie productions because it:
Effectively, the additional revenue catalyzed the supply of productions, and Blockbuster’s model catalyzed the demand for those productions.
Today’s essay looks past the demand side and supply side catalysts for Hollywood’s future lying in the creator economy. As I wrote back in January, “YouTube talent is moving closer to Hollywood’s model than Hollywood is moving toward YouTube’s.” Meaning, YouTube creators are finding faster and cheaper ways to produce legacy media–type content that both audiences and advertisers increasingly consider to be “premium”.
On a surface level this dynamic mirrors the Blockbuster story:
So, it would seem the supply side and demand side catalysts are pushing the creator economy into a competitive dynamic with Hollywood and legacy media that is analogous to the “unprecedented independent film movement” of the 1990s.
But, the lens of YouTube’s 135MM CTV users in the U.S. reflects why the emergence of the creator economy presents two very different catalysts from the Blockbuster story:
YouTube is capturing more legacy media ad dollars, which it is sharing with creators, and those creators outperform legacy media content with faster, cheaper and sometimes better content. Instead of catalysts, these dynamics help to reveal how YouTube is changing the economics of streaming to its advantage.
Here are four marketplace tensions to consider.
YouTube's marketplace advantages in Connected TV streaming are so much more dynamic than simply supply or demand side catalysts. It seems inevitable that it will win.
Total words: 1,500
Total time reading: 6 minutes
I consider a "tension" to be a dynamic that, if a trend continues, seems poised to change or even "break" in a marketplace. Focusing on both supply and demand side elements of that tension helps to hone in on those breaking points.