The market for expensive, high-end video content might be nearing a saturation point.
We all know people have been passing the time in lockdown by streaming ungodly amounts of Netflix and spending an equally unhealthy amount of time online.
But don’t let the success of the large platform players distract you from an even more significant shift in the media industry, which is that independent creators have been absolutely cleaning up lately.
Spotify continued its podcast spending spree this week, purchasing the exclusive licensing rights to Joe Rogan’s massively popular podcast, “The Joe Rogan Experience,” for a reported $100 million. The deal comes just three months after Spotify acquired The Ringer — the online publication and podcast network, founded by equally popular sports personality Bill Simmons, formerly of ESPN — for nearly $200 million. Now Amazon is planning to start snatching up podcasts for its Amazon Music and Audible platforms.
It’s not just podcasters. All across the digital media landscape, individual owner-operators are seeing huge gains in audience, engagement and revenue. TikTok, the user-generated video network, added more than 12 million unique U.S. visitors in March. Views on Twitch streams are surging. YouTube viewership is up so much that the platform switched to standard definition streaming in Europe because it didn’t have the bandwidth to handle the surge. And small, indie podcasters are seeing boosts in audience and ad revenue, even despite an overall decrease in digital ad spending.
The trend is clear: Consumers are flocking to indie creators for entertainment during this crisis.
Maybe it’s because these creators come off as more authentic, and people are starved for something that feels real during this time of extraordinary uncertainty and isolation. Or maybe it’s because people are bored and these creators tend to create compelling content all day long between their streams, podcasts and social media posts.
This is in stark contrast to the major platform players, which have struggled to attract audiences despite pouring billions of dollars into producing high-quality content. Quibi raised nearly $2 billion for its new streaming service and then released it this spring with a resounding thud. Apple spent $1 billion on original content for its Apple TV+ streaming service, attracting some of the most high-profile stars in TV history, such as Jennifer Aniston (Friends), Steve Carrell (The Office) and Jason Momoa (Game of Thrones). Now Apple has to literally give away its service to get people to watch — the company is currently offering consumers a year of free streaming as opposed to the industry standard one-month free trial.
It’s no wonder major platforms are clamoring to license content from small, indie creators.
The indie creators have a much better business proposition. Their production costs could not be any lower, and their audiences are exceptionally loyal and engaged. That creates a high-margin media business.
One of the few digital publishers to get this right is Barstool Sports. Not coincidentally, Barstool is also one of the few online outlets that hasn’t had to resort to any layoffs or furloughs during the economic downturn. Its podcasts continue to generate revenue and many Barstool personalities have taken up new activities, such as streaming on Twitch, to compensate for the lack of sports coverage.
Much like with Rogan and Simmons, all of the Barstool personalities are constantly creating content and engaging with audiences across their various channels. And their audiences eat up every single bit of it.
It’s cheap to produce, highly engaging and thus easy to monetize. The perfect business.
Highly-produced film and TV series will always exist in some form. But recent developments suggest that the high end of the content spectrum may be getting saturated, and that the best opportunities exist on the other end of the continuum.