While communications giants have sought to cash in on short-form content by aggregating and curating videos from the web, analysts now say the lessons learned from Comcast Corp.'s Watchable and even Verizon Communications Inc.'s Go90 platform prove this strategy is not enough, and going forward, content creation will be essential to success.
"It's kind of difficult for companies that are trying to curate and aggregate without a lot of original content and original programming to differentiate it. They seem to struggle," Kagan analyst Seth Shafer said in an interview. Kagan is a media research group within S&P Global Market Intelligence.
Source: Comcast Corp.
Shafer pointed to Comcast's recent decision to pull the plug on its Watchable video service. While Comcast in 2015 originally positioned Watchable as "a unique place that curates and distributes the best content" on the web, the distributor recently decided to reevaluate its online video strategy and cease offering Watchable as a separate service.
"We are taking our learnings, among others, and shifting the strategy for Watchable to focus on integrating the content within our Xfinity TV platforms, notably X1 where we saw the greatest amount of engagement and organic discovery," Jamie Gillingham, Comcast's vice president of strategic development, said.
Shafer also pointed to Verizon's mobile-first streaming service Go90, noting that the telco has invested "a good bit of money" in the service but has struggled to grow usage.
"I think if Go90 were an independent startup, it would be desperate times because from everything we see in terms of data, there is minimal viewership," Shafer said.
According to Kagan's spring 2017 online consumer survey, 28% of respondents who view free online video watched content from at least one of three Verizon-owned platforms: Yahoo! View, AOL or Go90. But while Yahoo! View was used by 25% of free online video users and AOL was used by 7%, Go90 was only used by 2%, according to Kagan analyst Brian Bacon.
Verizon did not respond to a request for comment.
Another analyst noting Go90's usage problems is Dan Rayburn, executive vice president of StreamingMedia.com and principal analyst for Frost & Sullivan. For Rayburn, a major problem with Go90 has been its content selection. "The content it had you could get from other channels. Plus, how many consumers will think of a Verizon app to get short-form video? There's already so many places to get it," he said.
Go90 does have its share of original content. As of September, it featured 1,400 hours of originals and 25,000 hours of live sports and TV.
But Shafer noted Go90 is not known for original or exclusive content in the way that Netflix Inc. is known for "House of Cards" or "Orange is the New Black."
"It's really hard because a lot of this content is available on [Alphabet Inc.'s] YouTube and other platforms where people can get it. And so what's really difficult for companies is luring people away from where they are getting this stuff," Shafer said.
Rich Antoniello — CEO of Complex Networks, the lifestyle brand and media company formed from the acquisition of Complex Media Inc. by Verizon and Hearst Corp. — explained that he sees a balance between exclusive output deals and widespread distribution.
"Both the platforms and the content developers have to realize the more platforms you are on, the more likely you are to reach more people because there are a lot of people consuming content exclusively on some platforms and across others," he said in an interview.
But he noted that with new, shorter exclusivity windows and larger content deals for blocks of programming, distribution agreements are evolving to be smarter for everyone involved, including content developers, advertisers and distributors.
"The distribution platforms are realizing that instead of trying to go show by show and be a curator, they are coming to someone like us and saying, 'If you know and understand this audience, give me a mini-channel or a block or a slew of ideas that we could produce across the board and now we can have a longer watch time,'" Antoniello said, adding that this strategy amounts to distributors "going much deeper and much wider with fewer partners."