This first installment is intended to understand how the business model of Netflix and other audiovisual content distribution platforms works, for which we consulted the researcher Gabriel Levy, content coordinator of the National Television Authority, ANTV, and researcher of the phenomena media.
Mg. Luis Fernando Gutiérrez Cano
Mg. Luis Jorge Orcasitas Pacheco
As background and coinciding with Curtin, Holt and Sanson (2014), it is clear that in the last decade an interesting media challenge has been established that manifests itself with the management of the improvement and growth of the film and television industries, a scenario that has been propitiated by various alterations and evolutions of the audiovisual context, forcing the agents of these industries, and those who lead them, to "reconsider the established maxims on how screen media are created, circulated and consumed" Curtin, Holt and Sanson (2014, p. 1).
In the same way, Ojer and Capapé (2012) highlight that "a new demand has been conceived, which has modified the ways of cinematographic exploitation and has allowed the emergence of new business initiatives, such as the new business models in the distribution of audiovisual content. "(P.187). In this framework, the authors point out, the emergence and consolidation of companies such as Hulu, YouTube, Amazon or Netflix, has enabled them to establish themselves as the most important content distribution platforms of the competitive global audiovisual market. We are witnessing what Costas Nicolás (2014) has called "a constant flow of content that has become almost intrinsic to the television medium and that will make us question whether the alternative distribution models, which we will see as Netflix, can continue to be considered. television and its fictions as television "(p.246).
This context has generated what Jenkins, Green and Ford (2014) have described as the great innovations in the distribution and circulation towards more participatory models, in front of an audience that "is not seen as simply a group of message consumers. pre-built, but as people who are shaping, sharing, reconfiguring and remixing media content in ways that could not have been imagined before "(Jenkins, Green and Ford, 2014, p.24).
It should be made clear that when it comes to understanding the revolution that is evident in the current panorama of audiovisual media, it is unquestionable that one of the scenarios to analyze focuses on distribution networks and technologies, which are precisely where they show the greatest transformation processes in the audiovisual field. Therefore, it is necessary to emphasize how in the last decade, it is precisely the aspect of the distribution of screen media that has demonstrated a true revolution in the XXI Century, the overthrow of institutional relations, cultural hierarchies and conventional business models (Curtin, Holt and Sanson, 2014).
Concepts of Gabriel Levy
The following are the opinions on the subject of Gabriel Levy, Content Coordinator of the National Television Authority, ANTV, and researcher of media phenomena.
What is the business model implemented by companies such as Hulu, You Tube or Netflix?
Gabriel Levy: It is important to highlight that, although the three are OTT platforms, whose distribution is made through the Internet, they use different business models. In the case of Hulu and Netflix, the model is flat rate content distribution, meaning that the user pays a single monthly fee and has unlimited access to the service, which allows access to thousands of titles.
Amazon, on the other hand, has a similar financing system, but the fee is annual and covers a limited number of titles, so that the user can, if desired, buy additional content. While YouTube has a very particular model with two forms of monetization, the first and most important is the advertising pattern that is equivalent to more than the 80% of the resources it collects and the second one instead is a monthly plan that the user can pay to change of power to consume content without advertising.
With regard to the business strategies presented, Michael Curtin, Jennifer Holt, and Kevin Sanson in which they highlight that Netflix, like other platforms such as Hulu or YouTube, have used different data from their customers. How has this innovative level of customization expanded access to the film and television industries?
Gabriel Levy: Knowing audiences and their consumption habits has always been necessary to distribute contents successfully and assertively and it is not new to the digital world or Netflix, since audience studies have historically always been implemented.
What platforms such as Amazon or Netflix have achieved with algorithms is to improve the level of accuracy in the systematization of information, taking the principles of big data to the collection and management of the consumption habits of viewers, thus enhancing the precision when offering them to the target audience.
Personally I think that the accuracy has been improved but it is not a perfect system, because until now there is no algorithm that can anticipate human subjectivity, especially when it comes to tastes, emotions or consumption habits. That is, for now an algorithm can not know if a person is sad and prefer to consume a drama to an action movie or vice versa, on account of their mood.
The Netflix phenomenon
Netflix has undoubtedly marked a significant break in the field of contemporary audiovisual and confirms the correct and concrete application of the long tail theory, which made possible the emergence and positioning of the so-called "new star" of the audiovisual firmament through the distribution of content under the concept of Video on Demand, whose most relevant reference, as discussed above, is Netflix. Let's see how these VoD distribution platforms, "revolutionized" the global audiovisual market and, in this way, generated many expectations, but also concerns, especially in emerging media areas, such as the markets of Colombia, Latin America and the Caribbean. Caribbean.
The Regional Coordination Platform Project for Audiovisual Distribution, points out, among other aspects, that Long Tail Theory, which has been disseminated, explained and analyzed by Chris Anderson, has surprised audiovisual professionals and has engulfed many of them in a victimizing psychosis. Faced with this reality. How can this scenario be narrowed to the audiovisual industry in Latin America?
Gabriel Levy: "According to the long tail theory or the long tail, the Internet marks the end of an era of mass successes and the beginning of specialized consumer niches for the audiovisual industry, something that is effectively reinforced by the constant reduction dynamic in the peaks of the Rating in all the channels of Latin America, those times in which a telenovela or party reached almost the 50% of the potential total hearing no longer exist and of parallel form the supply increases of dramatic way, at the time that the atomization of the audiences and the advertising guidelines are the biggest challenge the industry will have to face in the coming years ".
The next installment will be devoted to providing keys to solve the "new" audiovisual media and the way they should be thought of as mass media and niche media.