Netflix and HBO are making grand entrances to the Nordic market in the coming months, bringing with them a tidal wave of uncertainty sweeping over local video-on-demand players, and anybody else trying to make a living out of distributing – for the main part american – content.
Starting in 2005, video-on-demand services created a promise of a better, user centric world of viewing. Tech-savvy start-ups like Headweb andVoddler dreamt up companies that would get the latest features and shows out to the local market, allowing users in Sweden and the Nordics to watch them at the same time as the domestic audience in the U.S. Taking advantage of the smartest delivery networks and technological advances of the time.
But every story needs a villain, and the antagonists to our tech-savvy protagonists were the major studios of Hollywood and the local broadcasters, who had spent the better part of a century thriving in a siloed world. Because while the internet dependent Swedes had grown tired of being discriminated against due to their nationality – meaning no one was selling them the series and films they wanted to buy because they happened to live in another country – the local broadcasters and movie studios were fighting with all their might to keep from evolving their business model, keeping to the ways of yesteryear. And when the population was craving a product that existed, but the product maker didn’t seem to want to sell, a black market occurred with the Pirate Bay front and center.
While Headweb and Voddler tried getting the product out via legal ways, the Hollywood studios were not ready to innovate their business. If they had, when the technology was first made available in post-Napster time, legal video-on-demand sites could be owning the consumers by now, instead of having to compete with a black market and a behavior etched in the mind of millions.
The most crucial challenge for Filmnet, C More, Viaplay, ComoYo, Headweb, Voddler and the rest of those guys is that they don’t own their own product.
This is the same issue that the american and international brands – Apple, Netflix, and one can only assume with increased force in time, Amazon’s Lovefilm – face. Because while Netflix is producing their own shows with Lillyhammer and Arrested Development 2.0, the majority of their business is distributing someone else’s content.
The reason why the HBO launch is so interesting is that its the first distribution channel setting up shop, selling their own content. This means that if they feel like distribution on all platforms simultaneously so the consumer can watch whenever the hell they feel like it, they’ll do it (congrats,Samsung). If they feel like an all-you-can-eat buffet of their whole library so that all those who decide now is the time to watch all seasons of the West Wing and the Wire (seriously, you should), they’ll have it. And if their users ask for new possible ways of packaging their content that would make the users happy and even more willing to pay, HBO has the unique possibility of actually being able to execute. Because they own their product.
If the HBO experiment is successful, there should be the possibility of the whole Warner conglomerate opening up a hub in the Nordics for direct to consumer distribution. And where one goes, the other follow.