In Q2 2023, PARQOR will be focusing on three trends. This essay covers "'The definition of scarcity is continuously evolving away from linear and towards walled gardens.”
To remind you, PARQOR identifies a few key trends each fiscal quarter that reveal the most important tensions and seismic shifts in the media marketplace. Must-read stories or market developments are not always obvious from press reports or research analysis, and often require a deeper dive. PARQOR’s analysis questions established ideas and common wisdom, reassesses the moving pieces, and reveals the potential in the media marketplace in 2023.
I got an interesting question while discussing my three trends for Q2 2023: “What do you mean by ‘scarcity’?”
The question implies that “scarcity” may be a term more commonly understood within the advertising marketplace than outside of it. It may not be common parlance to simply mention “scarcity” and the audience to immediately assume “Yes, you mean scarcity as the linear distribution model’s historical moat of millions of households aggregated locally, regionally and nationally.”
But, scarcity is a hot topic now after the past month of Upfronts (last week) and Newfronts. Advertiser demand for the scarcity of linear inventory is ebbing as cord-cutting accelerates. With that backdrop, YouTube and Netflix took big swings at redefining the value proposition of scarcity on their terms.
Neither presented scarcity per se, though YouTube and Nielsen reported more than 150 million unique viewers in the U.S. watched YouTube and YouTube TV on televisions for the month of December 2022. That number is different from total TV households in the U.S. because it identifies individual viewers and their devices (e.g., TV in kids room versus TV in living room). It implies superior ad targeting possibilities against Google’s superior ad targeting capabilities, which has been *the* impossible dream for the TV advertising industry, to date.
Rather, both offer very minimalist versions of scarcity.
YouTube's and Netflix's sales pitches at Upfronts were, effectively, exclusivity is the new scarcity for advertisers, and the future of Upfronts will be hyper-engagement of target audiences within niche walled gardens.
Total words: 1,000
Total time reading: 4 minutes
As I wrote in January’s “Media Confronts New Gatekeepers to Scarcity”, there is a problem with scarcity as a value proposition to investors and advertisers in 2023: “the technological, operational and financial structures required to create scarcity no longer seem to have an obvious ...