Streaming platforms no longer care about content exclusivity
PLUS: How Cityside built a sustainable model for local news
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Streaming platforms no longer care about content exclusivity
In 2017, Disney made an announcement that caught the attention of nearly everyone in Hollywood: not only was it launching its own dedicated streaming service, but it would pull all of its content from Netflix in the runup to its launch. At that point, Netflix was licensing a vast array of shows and movies owned by Disney and had partnered with the House of Mouse to develop several extremely popular Marvel shows.
At the time, nobody really disputed that this was the best business decision for Disney. By then, it had become settled doctrine within Hollywood that the biggest mistake the studios had made over the past decade was allowing Netflix to build a huge customer base on the back of their content. The reigning assumption among these studios was that their longterm survival was predicated on pulling all their content onto their owned and operated streaming apps.
It wasn’t just Hollywood that held these beliefs. In fact, the 2010s could be considered the era of content exclusivity — a time when the platforms spent enormous amounts of money and resources locking content behind their walled gardens in an effort to boost user acquisition.
In 2020, for instance, Microsoft kicked off an industry-wide bidding war when it paid Ninja a reported $30 million to migrate his live game streaming to Mixer. In a very short period of time, both YouTube and Twitch countered with their own massive streaming contracts, all of which included exclusivity stipulations for the signed streamers.
Spotify was also extremely aggressive in locking down podcast content on its platform. Upon signing its massive $100 million deal with Joe Rogan, for instance, Spotify quickly ceased distribution through the show’s RSS feed and halted full episode uploads to YouTube. After its purchase of podcast networks like Gimlet and The Ringer, it initially kept most of the shows available on competing apps but gradually began pulling them into its walled garden. I remember my own personal disappointment when Heavyweight, the brilliant show hosted by Jonathan Goldstein, announced it would become a Spotify exclusive.
In fact, most consumers bristled during this exclusivity era. It’s not fun to see your favorite shows removed from Netflix and spread across a constellation of different platforms, all of which cost over $100 a year to subscribe to. The podcast community was especially agitated given the industry’s long adherence to an open ecosystem where every show could be downloaded onto a podcast player via its RSS feed.
If you count yourself among these worrywarts, then I have some good news for you: the content exclusivity dam is breaking, and it’s increasingly becoming easier to access your favorite content without subscribing to dozens of different apps.
What kicked off this Great Unbundling? I would point to June 2023, when the news broke Warner Bros Discovery was in discussion with Netflix to license several HBO shows. Up until then, HBO had been steadfast in its refusal to appear on Netflix, but CEO David Zaslav was staring at a mountain of post-acquisition debt and realized that so many shows were languishing in the Max library without producing any returns. Shortly after that deal was announced, Bob Iger surprised everyone by allowing Netflix to license 14 non-Marvel/Pixar/Star Wars shows for its service.
The major live streaming platforms like Twitch and YouTube are also becoming less territorial in their content operations. In 2022, for instance, Twitch lifted its requirement that partners refrain from cross-streaming their game play on other apps. By late 2023, both YouTube and Twitch had mostly stopped signing massive deals with streamers that would lock down their content. Twitch Chief Executive Officer Dan Clancy told Bloomberg News that this strategy “created this bidding war, and I don’t think that’s a sustainable business.” It’s now much more common for the top gamers to stream to multiple platforms simultaneously.
Then there’s Spotify. We first got hints that its exclusivity strategy wasn’t working when it announced massive layoffs within its podcast division. A statement from the Gimlet Union revealed that the “decision to make most of Gimlet’s and Parcast’s shows exclusive caused a steep drop in listeners — as high as three-quarters of the audience for some shows.” Higher Ground, the production company owned by the Obamas, leaked that the limited audience size was a key motivator in its decision to not renew its deal with Spotify.
And now those exclusivity policies are pretty much gone. Starting in early 2023, Spotify began moving many of its shows back into the open ecosystem. But the biggest bombshell came this week when the platform amended its contracts with the Joe Rogan Experience and Call Her Daddy, two of its biggest podcasts, to allow them to be distributed across all platforms.
So why is this happening? I’d point to two reasons.
The first is that limiting distribution to a single service also limits its longterm monetization. With Joe Rogan’s show opening up to all platforms, for instance, Spotify will be able to sell advertising across way more impressions. Similarly, an old HBO show that’s been languishing in the Max archives for years can find a new audience on Netflix. That’s why a show that’s been off the air since 2019 became the most-streamed series last year.
The second reason is that creative talent actually prefers non-exclusive distribution. While money will always play a factor in any deal signing, every content creator wants to reach as wide an audience as humanly possible. While I’m sure that Spotify will financially benefit from having Alex Cooper’s show more widely consumed, I’m also confident that she’s excited about the potential to reach a larger audience.
So do these events spell the end of all IP hoarding? Probably not. But the major tech platforms and entertainment companies are at least admitting to themselves that content monetization isn’t a zero sum game, and that sometimes it actually pays to play nice with your competitors.
What do you think?
How Cityside built a sustainable model for local news
It’s no secret that local journalism has struggled since the Great Recession, with hundreds of newspapers shuttering and thousands of reporters losing their jobs. Over the past few years, entrepreneurs have launched dozens of local news startups to help fill in the gap, but there’s still an ongoing debate as to whether local news should be a for-profit or nonprofit industry.
Berkeleyside is one of the few organizations that has tried both models. For the first several years of its existence, it was a for-profit entity, but then in 2019 its founders switched it over to a nonprofit model, and it’s since expanded into three separate verticals that cover the Bay Area, with a fourth launch planned for 2024.
In an interview, co-founder Lance Knobel walked me through how Berkeleyside came to be, why it switched to a nonprofit model, and how it generates revenue through a combination of grants, memberships, sponsorships, and large donations.
Watch our discussion in the video embedded below:
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I’m looking for more media entrepreneurs to feature on my newsletter and podcast
One of the things I really pride myself on is that I don’t just focus this newsletter on covering the handful of mainstream media companies that every other industry outlet features. Instead, I go the extra mile to find and interview media entrepreneurs who have been quietly killing it behind the scenes. In most cases, the operators I feature have completely bootstrapped their outlets.
In that vein, I’m looking for even more entrepreneurs to feature. Specifically, I’m looking for people succeeding in these areas:
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Video channels like YouTube, TikTok, and Instagram Reels
Podcasts
Newsletters
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Quick hits
Prior to Elon buying Twitter, I actually thought its video offerings were underrated, in that there were some really good video creators building an audience on the platform. While I admire Elon's attempts to share revenue with creators, I think he's done so many other things to damage the platform that it's probably not salvageable. [NYT]
"It was clear, pretty much on day one, that in addition to writing with an authoritative and articulate voice with over 15 years’ experience, I would be expected to help shovel the furnaces with SEO coal ... I soon recognized that time-consuming reporting or rich critical essays were less valued by upper management than quick hits." [New York]
This is a cool attempt to bring local TV news content to cord cutters. [Business Insider]
A great explainer of how France funds its filmmaking in such a way that encourages originality over franchises. [Nerdwriter]
A cool interview with a guy who's been running a newsletter since 1996 and used it to build a $1.7 million consulting business. [Inbox Collective]
Wow, Spotify has already captured 11% of the audiobook market after launching its audiobook streaming option only a few months ago. [NYT]
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I wonder if the end of exclusivity will also slow down the need to maintain different services. It's becoming obvious to everyone that having multiple subscriptions is similar to cable (minus the ads).
Perhaps content will eventually flow to whoever can get the most eyeballs.