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Tom Petrocelli's Musings on Tech

When Content Disappears So Does the Value

December 17, 2015 by Tom Petrocelli

Recently I was listening to an album on Spotify Premium. It was an older, progressive rock band from the 1970s. When it was originally released it spanned three vinyl LPs. Since it was so long I didn’t listen to the entire album at once and came back the next day to hear the rest. There it was in my queue as expected but the songs were grayed out. A grayed out song on Spotify usually means one that is not online. Sometimes that happens when a song or two from an album isn’t available even if the rest of the songs are. It’s downright weird to see an entire album missing in action but there it was. Searching for the band’s page, all that was left were their lousy greatest hits collections (which lack many of their greatest hits) and live albums of their late revival tours. The latter did not highlight the band at its best by any means. All the good stuff was gone.

After a bit of back and forth with Spotify customer service (who nobly tried to say what they clearly were not allowed to say) it became obvious that Spotify no longer had the rights to stream one of my favorite bands. It literary happened overnight; One day I had the music, the next day it was gone. Customer service tried to make it right by offering me a free month of premium service, for which I give them credit. Still, it’s not the same as having a great band’s music at your beck and call.
This experience highlights the real problem – the existential danger perhaps – with streaming content services. Companies such as Spotify, Netflix, Hulu, and Apple are a delivery system and do not control the content they sell. Whole segments of the market for content will be lost to these companies because they lack content important to those segments. Hulu, Amazon, and Netflix are developing their own content but there’s not enough of it and never will be enough of it to satisfy a broad customer base. They will always be beholden to content publishers.
My recent experience with Amazon Prime is another example of how unstable content delivery is unstable. Amazon was giving away a free month of Amazon Prime and since I had holiday gifts to ship, and it cost nothing, I thought it was worthwhile. They gave me access to their streaming content offerings with the membership. So far it has been underwhelming, Simply put, there is not enough of what I want to watch to make it worth my while. As the late Dom DeLuise said in “The History Of the World Part I” (which is not on Amazon Prime by the way) it’s “Nice. Not thrilling but nice.” Certainly not enough value for $100 a year. They had some great original content such as “Transparent” but not nearly enough to make up for not having any Star Wars movies. A couple of shows they can control doesn’t compensate for all the ones they don’t have but need.
I’ve come to view this as the Achilles Heal of streaming services. Desirable content will come and go and with it the value placed on the service. It’s not a matter of quantity – there’s a lot of content on all of these services but much of it is terrible. Instead, it’s about having content a customer wants – now and forever. So, either these services have to license incredible amounts of content, probably more than is practical, or they will experience more customer churn than is healthy. Specialization is not the answer either since cord cutters do not want to pay for many different services that mostly overlap just to get a full content experience.
Ultimately, scale through aggregation may be the only way to create a stable service. Someone has to get so big that they can afford to have all the content and publishers have no choice but to license it to them. Otherwise, constant changes in available content will irritate consumers to the point that they abandon these services.
Posted in: Change Tagged: business, content, streaming services

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