In today’s Exponential Investor…

  • The most fun thing to do
  • The demise of a nonstarter
  • What does the next few years hold for content?

A favourite pastime of mine is to head over to YouTube and browse upcoming cinema releases.

That usually entails a ‘trailer-fest’ where I can watch a whole series of trailers for upcoming movies.

In 2020, this pastime has somewhat ground to a crunching halt. With next to no new movies being released this year due to Covid-19 and not that many on the immediate horizon, I’ve seen very few ‘Hollywood’ movie trailers this year.

However, that hasn’t stopped my consumption of trailers…

In fact I probably watch more upcoming trailers now than I did in a pre-Covid-19 world.

Just letting you know

Thankfully the glut of Hollywood movie trailers has been quickly replaced by Netflix trailers. Most days now I get a little push notification from my Netflix app to let me know that a show I’ve set a reminder for is ‘now available’.

That’s because every other week I also get a notification about the new shows coming to Netflix.

This prompts me to head into the app, and have a browse through the list of shows and movies that are about to hit the streaming service.

It’s packed full of great trailers. Trailers for movies and shows I’ll probably never watch.

But the short two or three-minute trailers are fun, exciting and a good break from the usual day-to-day research.

I probably watch more Netflix trailers now than I do Netflix movies.

I suspect that’s because when I do have time to actually sit to watch something, live sport is top of my list, hour and a half, two hour… sometimes three hours movies are a commitment I’m not sure I want to make.

Albeit sometimes I will do a movie in two or three ‘sittings’.

Nonetheless, I wouldn’t say my attention span for longer content isn’t there. It’s just a short two or three minute trailer is far easier to jump to and capture in a break than a full blown movie.

This was sort of the idea behind the aspirational short-content streaming service Quibi.

Quibi was an attempt by billionaires Meg Whitman (former CEO of HP) and Jeffrey Katzenberg (founder and former CEO of DreamWorks) to bring a new streaming platform to the masses.

The concept was short, sharp content, minutes long – as in three, five, ten minute shows that people could consume quickly and in huge volumes.

There was one problem.

While people want to watch trailers – myself a case in point – people don’t want to watch ten-minute-long episodes of a series. They don’t want short bites in the way that Quibi was delivering.

They didn’t want to only consume this content via an app. In short Quibi had billions pumped into its launch, content creation and delivery… and no one cared about it.

A few weeks ago, Quibi announced it was shutting down.

Estimates are that is has become one of the biggest ‘failure to launch’ examples in the history of corporate America. $1.75 billion into a streaming platform that failed as fast as it hit the market.

It’s a story of trying to muscle in on a crowded market that really wasn’t asking for it to enter.

It was an attempt at disruption, when disruption wasn’t needed. They tried to create a new market for streaming content, when the market never existed in the first place.

It was a $1.75 billion gamble that didn’t pay off.

And it goes to show big name execs, big name content and big budgets doesn’t automatically equal success if there are no people to actually watch or use the platform and content.

The thing is if that kind of money can’t crack it into the ever more crowded streaming world, then have we reached a period of ‘Peak Stream’?

Tomorrow’s streamers

Netflix, Amazon Prime, Disney+, Apple TV+, Roku, Now TV, Rakuten TV, Google Movies, these are just a selection of the streaming services you can get access to.

You could add HBO Max, Shudder, Arrow TV, and BritBox all to the mix as well. There are more but I can’t think of them off the top of my head.

The world has gone from terrestrial ‘free-to-air’ TV to a hodge podge, mishmash or paid for content and streaming services.

It’s actually now more complex, convoluted and expensive than it’s ever been.

Just to have Netflix, Disney+ Amazon Prime Video and Apple TV+ is going to set you back about £250 a year. Start adding in paid movies, maybe another channel here or there and you’re looking at about £350 a year.

Of course you can still get ‘free’ TV like the terrestrial channels, but even they’re moving more and more online and streaming their services and even offering ‘premium streaming’ without adds – for a cost.

It seems soon enough there will be no ‘free’ TV and everything will be paid for content on streaming platforms.

Of course, there’s no effective aggregation of these platforms. You have to hop in and out of each one, have separate accounts, separate passwords, separate payment methods.

When ‘pay TV’ first kicked off, it brought together all the world’s TV channels into one easy to use platform. That’s how Sky and Virgin Media have grown to the size they have today. They just got access to everything and brought it all under one roof.

They still try and do that today, but in an increasingly diverse and shut off world of separate platforms, the content streaming space has never been harder and more confusing for people.

This doesn’t bode well for companies like Netflix who are now increasing prices for access because they need to spend more and more on content to keep people subscribed. That is a cycle that eventually turns people away.

My take is that Netflix, Disney+, Apple TV+ and the rest are now at the height of their powers. That this streaming industry is actually at a precipice where a real disruptor could come along and shake up the entire industry.

I’m not sure where it’s necessarily coming from right now. But it’s coming. Quibi tried, but they missed the mark by a mile.

I think there will be others who step in and step up like the incumbents did a decade ago. Change is on the horizon for the streaming world, and it’s one area of the market to keep a very close eye on.


Sam Volkering
Editor, Exponential Investor