Creator-Generated Content💡🎥💡
The lockdown is promoting individuals over big media🤳, ads-driven outlets are in trouble despite record viewership📰 and EPIC disrupts game publishing🕹️
Hi again! Not a fantastic amount of tech news over this past week as more and more companies replace product announcements with donations. Nevertheless, tech must go on…
Photo by Chris Murray
We’ve seen in last week’s newsletter how Disney’s situation was getting worse by the minute as every part of the company except their streaming service has effectively shut down, and the company was forced to rely on the back catalog in order and moving up recent theatrical releases to the service in order to keep Disney+ subscribers happy. As the content creating freeze continues in large media companies, they continue to suffer a faith that will only get worse as previously-filmed content is also exhausted in the coming weeks, but there’s one side of the industry that’s experiencing a boom.
If you’re amongst those who’ve supercharged their use of social media whilst isolated at home —like I am myself— it’s hard to not realize that individual content creators are killing it with videos made at home right now and viewers are tuning in. The current status quo has not only put these previously-dismissed-by-the-masses creative individuals on equal footing with big media companies, it’s given them an even better position compared to them since most of them are very small operations and the majority are one-woman/man shows. Don’t believe me? Just watch the host of NBC’s late-night show sending in his work from home🙄
Platforms like Youtube, Twitch, TikTok or Snapchat with a business model that relies on user-generated content will become the new go-to spaces for entertainment in the next 10+ weeks, if current estimations on the coronavirus lifecycle are accurate, and some of these creators realize that. A lot of them are using this time to broaden their target audience and engage more with them by reacting quickly to the developing situation, finding new ways of telling stories and creating new genres of entertainment in the process. Innovation usually comes from restrictions and ‘not being able to interact with other people in person’ is as good as any other.
Over the past decade or so, social media enabled the transition of power from big organizations to the individuals making up said organizations, journalists working in big agencies or athletes within big franchises have increased their influence over the audience beyond that of the organization they operate within. The equalizer that is forced self-isolation is adding to this reality and putting individuals on pedestals for everyone to see. As the golden age of television has temporarily stagnated, the golden age of the individual creator is stepping up to the task of entertaining the bored, content-hungry masses and I think this short period will be enough to promote individual creators from their current image of niche entertainment to mainstream sources of quality content in the minds of a bigger slice of the audience.
Another possible side-effect is that in their efforts to stay afloat, traditional media companies requiring on-screen talent to do the jobs of everyone else via remote assistance from the pros will transform the people in front of the camera into single-operating entities, or at least give them a better sense of their now-higher worth. It’s not impossible that these newly acquired skills will drive at least some of these currently high-profile individuals to part ways with their current outfit and go at it alone in the post-COVID19 era —if there’s gonna be one— or set up a small production company.
Photo by Aaron Sebastian
The effects of increasingly more people staying at home are clear when it comes to the consumption of entertainment. Whilst last week I was mentioning a 75% increase in internet bandwidth from gaming alone, this week HBO made public the changes they’re seeing regarding how US viewers are using the service in the Era of Corona. Amongst the highlights are a 20% increase in overall viewing hours —mostly from the young demographic—, a 40% increase in time spent on HBO NOW compared to the average of the previous four weeks, doubling audiences for The Sopranos, tripling audience for The Wire and, last but not least, a seven-fold! increase compared to recent weeks when it came to Ebola: The Doctor’s Story. I have no doubt that other companies like Netflix, Youtube and Facebook are experiencing increased usage of similar magnitudes despite their respective bandwidth throttling measures of late.
Regardless of this, profitability is actually going down for ads-driven outlets.
Facebook stated over last week that they’ve seen a weakening in their ads business in countries taking aggressive actions to reduce the spread of the virus while Twitter came out to say they will most-likely miss their guidance numbers for Q1 of 2020 despite the platform adding 12 million users in the interval. Both regional newspapers and digital outlets of a certain size, such as BuzzFeed, have been forced to lay off staff over the past week as they’re struggling to stay afloat, so what’s happening here?
While digital platforms are seeing a spike in usage, the record viewership is not converting into ad revenue because businesses are cutting their advertising budget left and right, rightfully fearing that the accelerating reduction in consumption will affect their sales. The thin veil over ads-driven businesses with low margins is starting to fall and the entire ads-reliant side of the media industry is in line for a big correction.
Going forward we can expect giants like Facebook to stay afloat as they dig deep into those war chests, but if your organization is anything but a giant, watch out. Depending on how much this situation lasts, TV networks could either be safe since ads are sold up-front months in advance, or sorry if this crisis persists beyond the next season of advertisement purchasing. With every pro sports league canceled for the foreseeable future, I doubt any of the current advertisers would want to continue their relationship with TV networks at current prices and the newly launched streaming services can only survive for so long on re-runs. That is, if the launch is not postponed altogether. Pair all this with the new reality of individually-generated content and we could see Jimmy Fallon on Twitch in no-time.
Last, and definitely least —this was to be expected after all—, Epic Games announced last week that they’re adding a publishing business to their existing game engine and digital storefront products, an effort that intends to put developers first. If they choose to sign a publishing deal with Epic, creators get to maintain full ownership of their IP and keep 50% of revenues after development costs are recouped, with the company also funding up to 100% of the development of the project in the pre-launch phase for things like developer salaries, marketing, localization or quality assurance.
Anyone who ever signed a publishing deal will tell you this proposal is significantly better than what the competition offers. While other publishers like TakeTwo’s Private Division label have moved towards relinquishing IP ownership for the games they publish, offering this to any size studio with the even revenue split and springing for the development costs is highly uncommon in this industry. For context, in the past decade, it would not have been obscene for a publisher to keep between 60-70% of revenue, full ownership of the IP and just partially cover development costs, if at all.
The first studios to take part in the venture are gen DESIGN, Playdead (Limbo and INSIDE), and Remedy Entertainment (Control) with specific games to be announced ‘in coming months’ but there are a lot more small studios in the indie community who, since the announcement, have expressed their desire to publish with Epic. The company’s publishing proposal, not unlike their 88%-12% revenue split in the Epic Games Store, is a cut above and is bound to disrupt the business model for the entire industry, it’s gonna be interesting to see if legacy publishers will adapt to the situation fast or choose to maintain their old ways and be blown out of the water.
Slack’s CEO ran a play-by-play on Twitter about what his life has been in the past few weeks and, if you ask me, it’s more than worth your time. If you’ve read any of the half-decent business books of decades past, chances are you’ve stumbled upon the moniker of ‘wartime CEO’, describing at various levels of detail how various individuals handled certain situations; Ben Horrowitz has an entire chapter on peacetime and wartime CEOs. In his thread, Stewart goes deep into detail motivating each decision he made as the environment changed for his company when the global situation got worse and the fact that it’s reported as these events unfold makes it all the more remarkable📚🎒
Rumors that next-generation console lineups will also contain a cheaper, less capable version on top of the flagship models are starting to look more believable. The reason why I personally think this is a real product and not just journalist bait has to do with the previous announcement that the Series X will have no exclusive titles at launch. If Microsoft sells this rumored cheaper version of the console at a similar price to the current Xbox One X with more performance and built-in future-proofing, this sounds like a realistic strategy from keeping consumers from buying the old console🕹️💸
Just a month after the launch of ‘Dreams’ Sony has hit the hard wall encountered by many publishers and developers of products relying heavily on user-generated, IP infringement. Nintendo reached out to Sony, who reached out to the creator of a ‘Mario’ project inside the ‘Dreams’ platform and the entire effort was shut down, moreover, Sony announced it’s on the hunt for other such projects that utilize Nintendo’s IP without permission; which is all of them👾⚖️
The gossip going around that Apple might partner with other companies in making AR hardware is gaining more credibility as HTC hardware is used for ‘internal testing’. With just a controller being developed by the second company in the partnership this makes slightly more sense considering Apple has no task-relevant experience in the field at the moment. The company had no problem in partnering with other companies for providing accessories and other non-essentials in the past while they produced the main device 🍏🤝👓
Depending on where you are in the casual research of ‘The Virus’, this video describing a method of simulating the current epidemic can take you to very different emotional states. Either way, it’s a very good visualization of how viruses spread🦠🧼
If you’re at home with the kids and starting to lose it, Amazon has you covered🧒🧒🏼
Have you ever desired the classic ‘Godzilla’ movie be done with only one actor? You’re in luck…
When underutilized, the mind can come up with strange projects to entertain itself…
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