Content And Its Complements
From the recent Ampere Analysis report, Breaking Down The Attention Economy:
Streaming services rank low among purchase intent items as USA & UK markets plateau.Ampere asked respondents what products they bought in the past year, and what products they plan on purchasing over the next year.
Across the USA and UK, food & drink, beauty & self-care, and alcohol were most cited. Travel and device purchases were relatively higher on most intended purchases compared to in the past year. Macroeconomic conditions may have incrementally limited such big purchases in the past year, with consumers having a more positive financial outlook in the coming year.
Streaming services fell to the bottom of both lists, reflective of the plateau of streaming stacking rates and fatigue of the saturated markets. Ampere found that consumers are increasingly replacing existing streaming services rather than making additions to their current digital basket
Just 31% of respondents purchased a streaming service this year. With a "more positive financial outlook" next year, only 19% intend to purchase one.
The streaming subscription is no longer an easy add-on to the household basket.
It is becoming something people swap, downgrade or manage.
Ad tiers, bundles, free funnels and hyper-personalisation all help, but do they sufficiently change the bigger question: if content no longer reliably sells more subscriptions, what else can it sell?
To be clear, there’s a difference between “media sells marketing” and “media is marketing.” Today, content is the product and one way it monetizes is by renting out the attention it generates—selling advertising. In this new model, content is the cost and the only sustainable profits will be for media companies to own the complements themselves.This may sound extreme, but connecting some dots, we can see that this pattern has been happening in media for years. Prices are deflating. Consumer price sensitivity is increasing (see: struggling box office). Content is increasingly top-of-funnel for complements: Amazon and Apple monetize video through higher customer spend or ecosystem lock-in; recorded music is effectively promotion for concerts; mobile gaming is free-to-play and instead monetizes status or community; and the biggest creators (YouTubers, podcasters) are now making more selling snack foods, beverages, merchandise, courses, or live events, than the direct monetization of the content they create.
As this continues to play out, media companies will have to re-orient their businesses. What used to be called “ancillary” sales will now be primary. Fandoms, communities, franchises, merchandise, and live experiences will be the economic engines, not the content itself.
They will need to: 1) own the tried-and-true complements where possible—consumer products, live events and experiences, and transmedia exploitation; 2) create new scarce complements (such as those built on status and exclusive access); and 3) bundle these scarce complements to increase consumer lock-in.
Some media companies already think about content franchises holistically (Disney being the canonical example). Most don’t.
It’s an opportunity for media companies that can position themselves accordingly. For others, it will be a hard pivot.
This is the uncomfortable move.
Stop treating complements as ancillary.
The show, film or game may still be the thing people care about.
But it is not the thing that makes the business work.
But the business increasingly depends on what it makes possible around it.