🦄 vol. 43
matt chats about the explosion of short-form video 👀
screen time 👀
It’s been a shaky few months in the world of streaming services. CNN’s foray into subscription-based streaming, informed by some pretty outlandish McKinsey forecasts, flopped, almost instantaneously, just a month after its launch. After a fall in subscribers, a crackdown on password-sharing and some layoffs, Netflix announced its plans to introduce an ad-supporter, lower-priced subscription tier to broaden market appeal. And the Disney+ strong start, rooted in the quality of its archives, may soon be tempered by the loss of streaming rights for the Indian Premier League, which could see 15% of its subscribers look elsewhere (sash’s chat in vol. 41 🦄).
Who’s competing for your screen time? 📺
After its journey from a mail-renting DVD subscription business, to content-aggregating streaming service, to a fully-fledged production company, Netflix sits atop the summit of streaming platforms. But one should never rest on their laurels, and new entrants are looking to knock Netflix off their perch. Netflix’s domination is largely a result of first mover advantage, but competition has risen and their piece of the proverbial pie has gotten a little smaller. This is what the current landscape looks like in terms of market share:
But that’s not the full story… 📖
… because, as I’m sure you’re aware, your screen time is also dominated by Instagram stories, Twitter threads, YouTube vlogs, and yes, TikToks (and YT Shorts too). And while the (long-form) streaming wars will continue to go on into the future, there are a few players who you may have heard of, eating away at your screen time too…
Yes, that’s not a typo. TikTok has over 1 billion DAUs and YouTube announced its short-form product, aptly named Shorts, just surpassed 1.5 billion DAUs. But comparing subscribers with daily active users isn’t exactly comparing apples with apples 🍏. This might help…
And the reasons? ⁉️
Well there are a few…
Constant content 🎥 … 83% of users have posted at least once, and while paid campaigns have seen influencers remunerated for content production, TikTok essentially gets all its content for free. To put it into perspective, Netflix spent $17 billion on production in 2021, and content acquisition, like Apple TV+’s $2.5 billion deal for exclusive Major League Soccer broadcasting rights, is costly too.
Droves of data 📈 … every second on TikTok generates hundreds of data points: scrolling past a video, pausing, scrolling back to rewatch one, liking, commenting and sharing are all valuable inputs. In comparison, most streaming services can only make use of what you’ve watched, how long you watched it for and what you’ve added to your “List”. Talk about an uneven playing field. And that manifests in a feed that is almost freakishly tailored to your (subconscious) interests.
Decision dilemma 🔄 … if you’ve ever sat down to pick a Netflix show, safe money says you’ve finished your poké bowl 🍣 before finding something you want to watch, at least once in your life. TikTok removes the friction of decision fatigue that every human hates by providing a continuous scroll of never ending content. No wonder it’s easy to lose yourself in the app.
Falling focus 📉 … if you haven’t already noticed, our collective focus has suffered since the advent of social media. So much so that the average college kid can only focus on a task for 65 seconds. We’ve gone from patiently waiting for every Tuesday for a new episode of our favourite advert-punctuated series, to skipping past 15 second videos. Sitting down for a 52 minute Peaky Blinders episode is a commitment, and most are opting for the commitment-free alternative of watching hundreds of short videos for 52 minutes instead. Ironic?
The outlook is promising… 🕶
… for TikTok and YouTube Shorts, that is. Over 50% of TikTok’s users are below the age of 30, and it doesn’t look like they’re going anytime soon. Users spend, on average, over 52 minutes per day on the app. And while 75% of apps are downloaded and open once to never be used again, 90% of TikTok users log onto the app each and every day. Now that’s a sticky app.
But the “stickiness” of the app is predicated on sustaining the rate at which new and engaging content is created, and that ultimately boils down to keeping the creators happy.
As Base spoke to in vol. 33 🦄, TikTok’s biggest challenge has been finding a sustainable revenue-sharing model. Short-form video makes it almost impossible to host in-stream adverts and the pace of the app makes it difficult to attribute ad revenue to the creators. To combat this, TikTok set aside $1 billion for their Creators Fund in order to attract and maintain their talent. And it also prompted them dipping their toes into longer form media.
But the dark horse here may be Shorts. Whispers from YouTube suggest that they may have found a fool-proof revenue-sharing model, despite the short nature of the content. And while their $100 million creators fund will be helpful, solving the issue of revenue-sharing may lead them to the gold at the end of the rainbow. Put simply, short-form is here for the long-run. 🏃♂️
matt
thanks to (ironic) recommendations from both his mentor and mentee, sash recently started reading stolen focus by johann hari
in the wake of the indefensible overturning of roe v wade, matt was shocked to read about how it may also affect couples seeking ivf