May 19, 2015

Streaming Services: Sinking Ship Or Royalties Saviour?

Jeff Cooper is the Senior Partner of Step Change Marketing This article appears in Jeff's monthly column in AdNews – Australia's leading publication serving the advertising, marketing and media industries.


I have a confession to make. When I was young and stupid (not to mention light on doubloons) I used to pirate content like movies, music, games and TV shows. I’m not alone – us convicts lead the world in piracy. I read in some recent and ‘very credible’ research that one third of adults admit to pirating content online. That increases to 50% for those between 18 and 24 years of age. I don’t believe those stats for a second – I’d bet they’re much higher!

 Thankfully, I’m now clean.  I’ve seen the light, the dull glow from my flat-screen TV, as Netflix auto-plays the fourth episode of Bloodline at 11pm on a school night.

 I now have Netflix. Not because I watch much TV but because, for me, the value proposition has far surpassed pirating, free-to-air and AppleTV (and probably many other on-demand alternatives). The point is content producers should stop cursing pirates and start partnering with distribution channels that are winning over the masses with their superior value propositions. And those distributors who are losing the battle should smarten up.

 At $8.49 a month, Netflix costs less than 30c a day for unlimited content across all my devices. AppleTV is around $3 an episode (equivalent to 10 days of viewing or 240 hours of Netflix gluttony). Free-to-air is full of crap and ads, with the only half decent content being at the worst possible times. Pirating is a pain in the ass around quality and logistics… oh yeah, and it’s illegal.

 Spotify has a similar customer value proposition – one monthly fee and unlimited streaming.

 Now artists and content producers are saying that their share of revenue from these streaming services is too small, but it’s got to be better than the zero they were getting from pirated distribution. I’m an artist, creative person who makes money from my creativity/thinking, and I have a business that does too, so I certainly value creativity. I’m also a realist.

 These services have done something that other models have failed to do: they have brought pirates back from their sea of filth and squalor, and they’ve charged them for the pleasure. Many pirates are turning in their eye-patches and peg legs, or choosing not to strap them on quite so often. For me, that’s alchemy.

Tides are changing. New legislation has been passed that, for the first time in Australia, will bring retribution to those that chose to break our piracy laws that until now have been impotent. This will further swell the tides in favour of streaming services.

 As always there is opportunity for those that move first. The weather forecast predicts rough seas and strong currents away from the traditional distribution channels so the smart seamen would be setting a course for the light.




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