[NOTE: It's Thanksgiving week, so there will be no Friday Mailing barring some unusual market development happening. Wishing a Happy Thanksgiving to you and yours.]
I continue to believe that understanding "user intent" is the difference between success and extraordinary success in legacy media and streaming.
One tension in this perspective is whether user experience (UX) and user interface (UI) matter more than content library.
Meaning, does it matter more to the growth of a streaming service that there is a library that users intend to consume?
Or, that the UX and the UI facilitate faster or better user decision-making for users?
Coincidentally, as I started writing this, I ended up starting a Twitter debate on this topic with Recode's Peter Kafka and AllYourScreens' Rick Ellis (who wrote about the exchange in his newsletter yesterday).
There were basically three perspectives:
Growth is increasingly on the minds of both streaming services and their investors after subscriber numbers flattened in the U.S., according to both Q3 earnings calls and a Kantar Q3 entertainment report.
Is the reason for the slowdown due to lack of content library due to pandemic-related delays? Poor software user experience (UX) and user interface (UI)? Or some combination of both?
There is not enough evidence to deliver a convincing answer for any outcome. We do not get much, if any, insight into how much a company invests in its software from earnings calls or reports.
When we do learn about it, it is typically an acquisition within a price range that is a small percentage of annual content spend:
In terms of raw costs, a streaming platform's software calculates to matter exponentially less to growth than content.
But the lens of "user intent" suggests growth will come from more being invested in software that understands user intent, and makes the user experience faster and/or better.
In other words: if "understanding user intent has been the difference between success and extraordinary success in legacy media and streaming" (as I wrote in The Metaverse, Dotdash, & Serving User Intent), then better software that better understands user intent will lead to growth.
There is a recent quote from A16Z's Marc Andreessen that I like to refer to as embodying the problems for streaming services struggling with growth:
My partner Alex Rampell says that competition between an incumbent and a software-driven startup is “a race, where the ...