Netflix – commissioning for attention patterns

Netflix have just released their most recent shareholder report, and in amongst the good news on international growth and conversion from DVD to streaming customers, there’s a very interesting section on their approach to original programming.

Another way to think of originals is vertical integration; can we remove enough inefficiency from the show launch process that we can acquire content more cheaply through licensing shows directly rather than going through distributors who have already launched a show? Our on-demand and personalized platform means that we don’t have to assemble a mass audience at say, 8pm on Sunday, to watch the first episode. Instead, we can give producers the opportunity to deliver us great serialized shows and we can cost-efficiently build demand over time, with members discovering these new franchises much in the same way they’ve discovered and come to love shows like “Mad Men” and “Breaking Bad.”

The highlighted section is most interesting – Netflix are plainly stating the difference between themselves and traditional broadcasters. Because they aren’t reliant on spot advertising, they don’t have to worry about delivering a live, synchronous attention pattern around their shows. Their subscription model means that long-term engagement is more important to them than overnights; data is more important than ratings. Over the last few years timeshifting attention has become increasingly common for certain kinds of genres, particularly comedy and drama. This is a real problem for broadcasters reliant on ad breaks for their income, which is why ‘live’ event formats are becoming increasingly important to schedulers, and are moving on from reality/entertainment/sport to new genres like specialist factual (the BBC announced Planet Earth Live only this week).

If Netflix and other VOD platforms can follow HBO and build strong brands for drama and other high-value content that is not reliant on a strict schedule,  where will that leave the traditional broadcasters? Will the live event pattern be the only way they can guarantee an audience for their advertisers? Or is their future to join Netflix et al in building more income from direct subscriptions, and become less reliant on 30sec spot ads? That would be a long and painful pivot for pretty much all commercial broadcasters, as their income from online platforms is generally less than 10% of total income.

As new attention patterns develop and mature in audiences, we’ll see more and more examples of companies making major content investments based on these new patterns. Netflix’s original investment is one, Youtube’s Original Channels is another. Expect this to be a major growth area over the next 5 years.

Storythings Business Cards

Yearnotes – a year of Digital Attention

Storythings started as a company on March 18th 2011, so we’re just over a year old.

Its been a fascinating year, working with some brilliant people and clients, and developing from a bunch of ideas and contacts into a real pipeline of work and a clear sense of what the company does, and how it can grow. Talking to friends who have started companies, the constant piece of advice was to find the work you want to do, and build your company around that, rather than the other way round. Its good advice – companies are rarely forged in a single strike, but instead accrue like coral, taking shape with every decision, conversation and piece of work they put into the world.

One of the things that has refined a lot over the year is the one line pitch about what Storythings does. Our work this year has been about 50% strategy and R&D projects, and 50% making stuff (like Pepys Rd for Faber & Faber – go and play it now if you haven’t had a chance yet). This balance is important – in an age of agile and iterative culture, the lines between research, strategy and product are blurry and often irrelevant.

What unites everything is an interest in Digital Attention – the way that digital networks change the way people find, share and engage with culture. We’ve been interested in attention and culture for a long time, but this year has focused our thinking away from the debate about digital cultural products – ebooks, online video, apps, games, etc – onto digital attention – the patterns and behaviours that we use to find and share culture.

Over the last five years, digital networks have become the default way of finding cultural products for nearly all culture industries, regardless of whether the product itself is digital or not. Even if the end result is not digital, a digital network will have been involved at some point in the discovery, research, sharing, buying or remembering of that cultural experience.

Most media and culture businesses have waited until the format of their industry turns digital, but really, this is far too late. Way before then, people will have been using digital networks to find and share information about what you make. The cultural object itself is often the very last thing to turn digital.

At Storythings, we’re helping clients understand recognise these new patterns. We can already see reasonably mature patterns of digital attention in most cultural sectors, and help companies think about what this means for their cultural products and business models. We can also develop new products that take advantage of these patterns, or that encourage new patterns of digital attention to achieve specific goals.

This is a more sustainable long-term strategy than focusing on specific platforms. Facebook, Twitter & Pinterest may or may not exist in the same way in five years time, but  the patterns of digital attention that your audiences are using now will have become deeply engrained habits, regardless of whatever platforms happen to be popular. Understanding these patterns and designing for them is what Storythings is passionate about, and what we’re focusing on as we enter our second year.

So – thank you to the people who have worked with Storythings this year – James Bridle, Hugh Garry, Phil Gyford, Alex Parrott, Kim Plowright, Tassos Stevens, Blast Theory, Chris Thorpe, Dean Vipond and Tim Wright.

And thanks to everyone who has hired us for work this year – BBC, CNNi, Dazed & Confused, Faber & Faber, LBi, Manchester International Festival, MSL, P&G, Pulse Films, Speak-It Films, Syrup, and Wellcome Trust.

We’re developing a fantastic roster of clients and work – if you’d like to talk to us about working with you, please get in touch. Its going to be a very exciting second year, and it would be great to find some new clients who are as curious about digital attention as we are.

The Story 2012 - view of Conway Hall

Storythings Podcast Episode 4 – Tom Watson & Emily Bell

The fourth Storythings Podcast features Tom Watson MP and Emily Bell, Professor of Journalism and Director of the Tow Center at Columbia University, New York. Tom Watson has been a key figure in the Hackgate scandal, and interviewed James and Rupert Murdoch as a member of the Commons Select Committe on Culture and Media. Before moving to Columbia University, Emily Bell was Head of Digital at The Guardian, where she covered the emerging Hackgate story as it happened. In this frank and candid discussion, Watson and Bell talk about their personal experience of the scandal and what it means for Politics and Journalism in the UK. Recorded at The Story conference on Friday, February 17th, 2012.

Tom Watson’s book about his experiences of the Hackgate scandal – Dial M for Murdoch
– is available to buy from April 19th.

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Play the Podcast (25.07)

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