Every streaming company suddenly wants to become a marketplace

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Let’s jump into it…

That’s the interesting question contemplated in this Trapital post:

Netflix’s biggest competitor is now YouTube. Netflix’s push into video podcasts reflects that. But according to Omdia, video podcasts account for just 6% of YouTube watch time. Meanwhile, music videos account for 33%! All those video podcasts are a drop in the bucket compared to music videos. It’s hard to meaningfully compete with YouTube for viewing time without also having access to one of YouTube’s biggest categories.

Of course, the big unknown here is how Netflix could actually pay for all this music content. The large music streaming platforms like YouTube and Spotify pool all their advertising and subscription revenue and then funnel a substantial portion of it to music rights holders. This wouldn’t really work for Netflix’s current model, since most of its subscription revenue is already allocated to its TV and film content.

Here’s how it could maybe work: Netflix would add a music library and then monetize it with advertising — which will appear before and after music videos regardless of whether you’re signed up for Netflix’s ad-free tier. Then if you want to remove the ads, you have to sign up for an extra premium music tier.

Other streaming platforms carve out music tiers in a similar way. For instance, with YouTube you can either sign up for YouTube Premium or YouTube Premium Lite. If you go for the latter, you get all ads removed except whenever you’re viewing licensed music.

Spotify does something like this for audiobook subscriptions. If you’re simply signed up for a free Spotify account, you don’t have access to audiobooks, but a Spotify Premium account gets you access to 15 hours of audiobook listening. But if you want more audiobook listening hours, then Spotify offers a separate add-on subscription.

Assuming the music labels go for this sort of arrangement — and they probably would — then Netflix could significantly expand its library without eating much into its current content spend.

Andrew Fogliato never set out to be a marketing consultant. He was simply trying to succeed as a real estate agent and began creating local online content to promote his listings. His colleagues at RE/MAX quickly noticed that his marketing savvy gave him an edge, and soon he was training other agents across Canada. Eventually, he left RE/MAX to launch his own marketing agency, where he built a strong business helping agents run Facebook ads.

In 2022, Andrew saw an even bigger opportunity. He purchased Real Estate Magazine, Canada’s largest industry trade publication, and immediately began expanding its online presence. In a recent interview, he discussed why he bought the magazine, his approach to monetization, and why he isn’t in a hurry to expand into the U.S. market.

Politico published a long piece on how states across the country are trying to lure film and TV productions, usually through a mix of tax incentives. California, meanwhile, is responding with subsidies and tax breaks of its own in an effort to bring those productions back. [Politico]

I should start by saying that I’m generally opposed to large corporations pitting states against one another to extract tax breaks. Studies consistently find that these incentives often fail to generate enough economic activity to offset the lost tax revenue, creating a race to the bottom in which states give away more and more just to stay competitive.

That said, I’m a little perplexed by the way large portions of the creative community treat the migration of productions out of Los Angeles as inherently bad. One of the biggest benefits of the Creator Economy is that it has democratized content production, allowing virtually anyone to pursue a creative career. You no longer need to live within a 30-mile radius of New York or LA to make content that reaches millions of people.

Spreading film and TV production across the country only extends that democratizing effect. People who don’t have the resources, connections, or ability to uproot their lives and move to California can gain access to an industry that, for decades, was largely closed off to them.

What makes the anxiety over productions leaving LA especially strange is how it contrasts with the current handwringing over so many journalism jobs being concentrated in New York City. In that case, geographic concentration is widely treated as a problem. There’s an active conversation within journalism about supporting news organizations outside New York so audiences are exposed to a broader range of perspectives and experiences.

So why wouldn’t we apply the same logic to Hollywood?

This is every creator’s nightmare: an apparent automation error wipes out an entire YouTube channel, leaving its owner with virtually no recourse beyond launching a petition and hoping an actual human at YouTube sees it and intervenes. [Change.org]

Obviously, this is why creators diversify their distribution and try to build their businesses on platforms they control. But YouTube is still the largest video platform in the world, and there’s only so much creators can do to protect themselves from a catastrophe like this.

Here’s what I have on deck for paid subscribers:

1. Every streaming company suddenly wants to become a marketplace

2. Media companies probably shouldn’t launch their own AI chatbots

3. Kids’ summer camps are attracting up-and-coming musicians

Let’s jump into it…