Product Iteration for Consumer Video
Continuing from the previous post, successful consumer video products distance themselves across the Entertainment Value curve and deliver the right combination of Social value + Production value. Startups have to iterate upstream or downstream from where they are placed currently on the entertainment value curve until they find product market fit.
How to not iterate
Twitters acquisition of Periscope
Twitter tried to jump across the Entertainment curve from 140 characters to video because it saw the explosion of video and wanted to ride the curve. It acquired live video streaming app Periscope and integrated Live Video. Five years since the acquisition, Twitter silently shutdown Periscope citing ‘declining usage’.
Twitters users are geared for high interaction, with instant reactions, retweets and responses while Periscope caters to live performances. Twitter couldn’t come up with a new way to integrate video and solve for a particular use case that excited enough users. There was no transition for users coming to Twitter for snack-able content to start watching long form content.
Microsoft acquisition of Mixer
Microsoft acquired video game live streaming platform Mixer and merged it into the Xbox division as part of its strategy to compete with Twitch. It signed some of the biggest streamers with eye popping contracts, but announced that it was shutting down after five years citing ‘inability to scale operations’.
The Xbox division operates with a high production value strategy. For Xbox, getting the right partnerships and producing high quality games are key for success. They took the same strategy and acquired the world’s top game streamers and signed contracts with them. This led to an increase in the amount of unique hours of content being streamed on the service, but the number of concurrent users kept dropping.
The team failed to understand their place on the Entertainment curve and ignored the social aspect of the platform. Even though the acquisition of content brought in more users, they ignored to create a community that was passionate around the streamers and the platform suffered with low interactivity.
How to iterate
Users behave differently and have different expectations based on where the app lies across the entertainment curve. Users listen to Spotify for twenty minutes while driving to work, browse Instagram for twenty second bite sized content while taking breaks at work, and watch Netflix with their spouse at home.
It is difficult to jump across the Entertainment Curve and satisfy someone at the other end. It is much more easier to add value to the adjacent user and move the product gradually along the curve. Apps that copy features from competitors close by on the curve integrate them more successfully. The focus should be on innovating a feature or interaction that unlocks value.
Products move upstream by increasing the social value for the users at the cost of decreasing the production value bar. This generally means shorter form content, and more interactions. Users upstream look for snack bites of content rather than paying attention to engrossing content.
Instagram decided to move up the chain and increase interactions. It copied Snap’s Stories Feature and decreased the bar from stunning pictures to more natural unscripted stories.
Instagram is a curated feed, but you only get to see the highlights. Stories creates a place for content that’s not “good enough” for the Instagram feed, or at least is too silly to fit in amongst the art. — Instagram CEO Kevin Systrom
Copying that feature brought Instagram so close to Snap’s position on the Entertainment curve that Instagram ate into Snap’s market of ephemeral content and became the market leader by nature of its network.
Products move downstream by increasing the production value and creating entertaining content. Typically content is long form, and has to capture the user’s attention span for long. As companies increase value along the production, the content strategy becomes important, and predicting content demand and producing high quality content becomes key.
Netflix started with dvd mail service + streaming at $ 9.99 per month and kept increasing its price despite all user complaints. At the same time, it got rid of all social value and removed community features and interactions such as user ratings and reviews.
Raising your monthly subscription will improve Netflix’s ability to acquire and offer high quality content, which is the number one member request- Netflix CEO Reed Hastings
Netflix started original programming with House of Cards and now deploys USD $ 20 billion to fund its content strategy of releasing at least one new movie every week.
Generating good ideas
Good ideas are a combination of Social value and Production value. Once startups identify a particular place on the map they want to iterate towards, they need back it up by acquiring the necessary content. Acquiring content is expensive and more important than building social features.
Instagram launched Stories allowing users to share pictures that would disappear within 24 hours. It backed this with the content strategy of ‘Behind-the-Scenes’ content from Celebrities which increased the social value of the content. Celebrities used Stories to giving a glimpse of their lives, their homes and a typical work day without makeup or filters. It made fans feel that celebrities were sharing something personal and this matching of Content strategy led to the success of Insta Stories.