I want to share a statistic that kind of blew my mind.
In 2011, about 20 percent of non-game Internet revenue came from content subscriptions (to stuff like Hulu, Spotify, Amazon Prime, and Netflix). The bulk of the revenue has historically derived from advertising.
Today, that number has completely flopped with subscription-based revenue at 80 percent — in just five years!
And content-based subscriptions will account for more than half of all internet consumer media growth in the next five years.
These projections came from Activate CEO Michael Wolf’s presentation this month at a recent Wall Street Journal Conference.
What makes this trend even more remarkable is that “cord-cutting” (getting all your media from the internet instead of traditional TV and cable) is only growing at just 1 percent per year. Growth in cord-cutting has been blunted because just 12 percent of the U.S. has access to the minimum speeds needed for multiple pay TV video streams.
In our new episode of The Marketing Companion, Tom Webster and I dissect this trend and its implications for marketing.
The new media economy and advertising
I commented that the amount of video content being consumed is exploding, driven by two trends:
- Viewing is now asynchronous, meaning you can view it any time you want and even consume in a binge
- Fueled by subscription revenues, channels like HBO and Netflix can take greater risks on quality long-form storytelling
An entirely new media economy is being driven by this content-driven trend, and the news is not good at all for advertisers. The millions of hours consumers now spend with subscription content is “unaddressable” by advertisers. Essentially, the places to even spend advertising budgets is drying up.
This trend also explains some of the content/carrier alliances and mergers. Could this open up new marketing opportunities?
The development of this new media economy is simply a fascinating idea and you’ll not want to miss this recorded conversation. Click here to get up to speed on the new content dominance strategy:
If you can’t access the edition above, click on this link to listen to Episode 90
Other ways to enjoy our podcast
- Click here to download the latest episode or subscribe in iTunes
- Complete Marketing Companion Episode Guide
- Click here for the show’s RSS feed – for Android listeners.
- Find the podcast on Stitcher
Please support our extraordinary sponsors. Our content is free because of their generosity.
Many thanks to our friend Scott Monty for the awesome show intro. Be sure to check out his amazing newsletter The Full Monty and his new podcast available here: fullmontyshow.com,
BuzzSumo is the world’s best way to discover, analyze and amplify your content. Run over to BuzzSumo today for a 14 day free trial. Beyond data, BuzzSumo offers priceless insights into content discovery, monitoring, influencers and outreach, content research and planning, and competitor research. Find out why so many Marketing Companion fans are now hooked on Buzzsumo. Check out BuzzSumo’s powerful technology to look at the hottest content trends down to the hour!
Affinio is now offering a FREE eBook co-authored with Mark Schaefer called How to Identify, Understand and Grow Your Ideal Content Audience. Check it out, as well as their new free audience Discovery tool. Affinio is an advanced marketing intelligence platform that leverages the interest graph to understand today’s consumers. Affinio believes that if we can understand individuals at a deeper and richer level, then we can fundamentally change the way people relate to one another. By understanding the interests and cultural DNA of key audience segments, marketers are empowered to take an audience-first approach to making meaningful connections with ideal consumers. Find out how at Affinio.com.
Illustration courtesy Flickr CC and Televisone Streaming
