Monday, September 30, 2013

DirecTv Producing Content

For distribution companies, the need for quality content to put in the pipeline is essential.  And for content companies, having a strategy of placement to assure a nice return on investment is essesntial as well.  For DirecTv, it has led to a couple of attempts, most notably, trying to buy Hulu and its content deals.  But that attempt failed as Hulu pulled back its for sale sign and DirecTv has been looking for other alternatives. 

While not as big a deal as Hulu, they have found their next opportunity in the indie film arena.  "The satellite operator struck a deal with startup movie studio A24 Inc. to partner with it in acquiring independent films in exchange for rights to offer them exclusively on its video-on-demand services 30 days before they hit theaters."  While that might do A24 any favors with movie houses, it does guarantee them a premiere window and access to its huge subscriber base.  Add to that the marketing muscle of DirecTv and all you need is a potential hit film to dangle to consumers as "only available on DirecTv".  Of course to be realistic, very few indie films break through; in fact, some don't get their true notice till after their theatrical run when they hit the premium and/or DVD window.  Still, for DirecTv, its a good first step.

For those of us that believe that Content is King, it becomes crucial for distribution companies to secure exclusive content agreements to differentiate itself from others.  Its been done in the premium window with HBO, Showtime, and Starz and its been done in the streaming window with Netflix, Hulu, and Amazon.  And as my last post stated, it is why Intel Media has yet to move ahead.  Content is what viewers tune in for; it is why they are willing to buy cable subscriptions, premium subscriptions and streaming subscriptions.  And the value of these subscription deals are improved when the content becomes accessible across multiple screens.  But for me, it is most importantly the quality or the perception of the quality of the content. 

So DirecTv's decision to partner with A24 makes sense. But it can only be the tip of the iceberg of more exclusive content agreements.  I expect more such deals for DirecTv as they and others compete aggressively for subscribers.  That means that demand will continue to grow and the cost for content acquisition will as well.  And that is good news for content companies.

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