SWRM Labs Blog

Dear StreamSpace Community Member,

Jul 16, 2018 9:46:43 AM / by Robert Binning posted in Streamspace, Film, Community Update, Streaming, Uncategorized, Blockchain


Dear StreamSpace Community Member,

Thank you for being part of our community! We want to keep you abreast of what we’re up to across a variety of technical and business development fronts.

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Platform Strategy vs Product Strategy

Aug 30, 2017 3:19:48 PM / by Robert Binning posted in Filmmaking, Ethereum, Film, Streaming, Uncategorized, Blockchain


If a man has good corn or wood, or boards, or pigs, to sell, or can make better chairs or knives, crucibles or church organs, than anybody else, you will find a broad hard-beaten road to his house, though it be in the woods.

— Ralph Waldo Emerson, Wikipedia

A few years after Emerson’s death in 1882, he was mis-quoted with the now-famous line, “Build a better mousetrap, and the world will beat a path to your door.” Thus began a never-ending quest for new and improved products, including over 4000 variants on a mousetrap.

But what makes one of these new products take a significant share, growing in popularity over all of the other innovations? What makes a new product concept transformational instead of merely offering an incremental improvement? How does a new idea disrupt and shift an entire industry? For the past 10 years, business strategists have been preaching the vision of designing and managing “platforms,” which change the industry value chain, often by upsetting traditional industry rules to serve new mass markets.

As noted in a Harvard Business Review article on this topic, the success of a platform strategy is based on three factors:

  1. Connection: how easily others can plug into the platform to share and transact
  2. Gravity: how well the platform attracts participants, both producers and consumers
  3. Flow: how well the platform fosters the exchange and co-creation of value

Consider some examples of how successful platforms achieved this status. Apple’s iOS and Google’s Android platforms each made it very simple and relatively inexpensive for app creators to launch their services, especially compared to other mobile environments, such as Symbian and Microsoft Windows Mobile. Apple and Android have different strengths, but both have succeeded by offering app developers the ability to create and distribute content or services easily and to build relationships with their end users. Both of these parallel platforms have transformed the software industry, as developers increasingly make everything X-as-a-Service.

The platforms in today’s media entertainment ecosystem represent the four main monetization stages that content passes through to reach its audiences:

  • Theater distribution
  • Over-The-Air Broadcast or Cable networks
  • DVD production for home purchase and (less frequently) rental
  • Streaming Video on Demand to smart TVs or thin clients like Roku, Apple TV, and Amazon Fire, to PCs / Macs, and to mobile phones and tablets

A different dimension of platform emphasizes the industry’s current focus on blockbuster series with myriads of films and TV shows that feature “bankable” names: DC and Marvel superheroes, Disney/Pixar’s Cars, Nemo, and Toy Story collections, Star Wars, etc. It seems that it is impossible to escape programming dominated by sequels and spin-offs, and it feels like half or more of Hollywood’s budget is going into huge, “safe” productions instead of toward edgier, creative fare.

This business architecture serves the studios quite well, since global revenues continue to climb for the major production and distribution shops. However, it is easy to see chinks in the armor of the major players in today’s industry.

The number of US domestic movie theater tickets sold each year peaked in 2002, at 1,577 million, and has mostly hovered around 1.3–1.4 billion tickets sold per year over the past 20 years. Total industry revenues have continued to climb, but this is due to inflation, increasing average ticket prices, and new viewing formats like 3D.

Both broadcast and cable viewership have declined over the past 10 years as more people “cut the cord” and seek entertainment from online sources instead of the major cable and satellite providers. Americans between 50–64 have changed TV viewing habits the least, and older Americans have seen modest growth in the number of hours of TV content consumed, +7.7% over the past 6+ years, but all demographics of younger Americans, from teens aged 12–17 through adults aged 35–49, have seen significant reductions in the number of hours of TV content viewed over this time period. The DVR, currently in 50% of American households, is the architectural control point for cable service providers. But the one-size-fits-all business model maintained by the cable and satellite provider industry is proving too expensive and too limited at the same time.

DVD sales peaked in the US in 2004 (and in 2007 for the UK market), and the revenue from DVD sales has shrunk by 30% from that peak 13 years ago. Netflix’s DVD subscription base has been falling and now only numbers 3.76 million households (2Q17), down 73% from 2011, and Redbox has been struggling with declining revenues since its peak in 2013. However, DVDs are vastly more profitable for the studios than any other format for viewership, and the huge installed base of DVD players, still in 88% of all households, means that this format will not disappear anytime soon.

What has been growing is the digital streaming segment. Netflix now has nearly 100 million subscribers, evenly balanced between US and non-US markets. While the number of films or series available for streaming is only 5,500 in the US (and lower in other country markets), Netflix has been building its library of self-funded projects such as House of Cards, Orange is the New Black, and Beasts of No Nation. Its scale places it easily in the top 10 studios and larger than all of the major cable providers combined. Amazon Prime Video has more movies than Netflix, about 18,000, but only about 27–30 million US subscribers. Amazon has also been building its catalog of exclusive content, such as Room, Bosch, and I Love Dick. Hulu, which is co-owned by four major TV content distributors, Comcast, Fox, Disney, and Time Warner, is smaller yet with 13 million US subscribers in 2016.

All three stream service providers claim to be platforms for streaming video. Hulu now offers live TV channels over the Internet along with next-day searchable content. Amazon and Netflix have integrated movies and series into their recommendation engines by genre and track consumer rating preference scores to try to lock in “eyeballs” for their offerings. Along with smaller platforms like iTunes and Google’s YouTube TV, the streaming ecosystem appears to be a weakly differentiated group of competing systems, with competition for unique and exclusive content.

The end consumers are increasingly frustrated by this ecosystem complexity. Either they have to maintain multiple subscriptions to capture all of their desired content — Netflix for House of Cards, HBO Now for Game of Thrones, Hulu for The Handmaid’s Tale, Amazon for Manchester by the Sea, etc. — and spend a lot of time sorting through hundreds of mediocre titles to find the works they want to watch before the content goes off the shelf, or they have to limit their choices to one or two preferred services and miss out on the content their friends are discussing. Either way, the tech-savvy streaming film consumer is frustrated by today’s ecosystem that serves the tech giants, but not the consumer market.

StreamSpace is different. StreamSpace is a platform for independent filmmakers to create and promote their projects to fans in search of nontraditional films. Rather than subscribing to a service that costs $8 to $20 per month that locks the viewer in to a limited set of film choices, StreamSpace is enabling an open platform for thousands of filmmakers to engage with their fans and create and share their works of art, with the filmmaker in control over pricing, viewing schedules, and geographies as they choose. Viewers pay for the films they want to watch, and community social media channels help them discover new, exciting content. The distributed blockchain storage model means that there is no central behemoth dictating terms, and the security of the blockchain immutable ledger puts the filmmaker in full control to upload the film, observe the transaction history, and decide when or if to remove the film content at will.

Come join our community as we bring a new model for film distribution to a market that is frustrated by mediocrity and expensive contract commitments.






Photo credit:

Photo by Samuel Zeller on Unsplash

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