Amazon and Netflix Battling to Own Media

Viewers have been ignoring commercials since commercials began, but recently it has been taken to a whole new level. Tivo allowed viewers to skip them, but two new developments are cutting brands completely out of the equation.

Netflix has signed a deal to distribute Dreamworks titles, which will start in 2013. And Amazon has signed a deal with Fox to stream thousands of movies and tv shows.

What does this mean for brands?

Great film and video content has been a mainstay of brand advertising for decades. In the beginning, brands paired up with individual television shows for which they were the sole sponsor. Then networks began offering the sponsor slots to any brand that wanted to be represented during a show, and that is how video has been funded for decades. But now brands are being cut out completely, and the revenue from this content will go to Netflix, Amazon, or another content distributor.

There is a lot of talk about how to market brands and products that divides efforts into Paid Media, Earned Media, and Owned Media. The idea is that paid media such as display ads or commercials is the old way of doing things, before social media and digital distribution. You can say whatever you want (you control the message), but there is no guarantee that anyone will listen. Earned media is word of mouth, having a commercial go “viral” — it’s buzz. It’s the elusive magic dust that all brands strive for…but there’s no control over it at all. Owned media includes websites, twitter accounts, and any other ways that brands can enter the conversation and interact with their customers. The brand owns it and can control it, but it requires lots of maintenance and is inauthentic (everyone knows the brand’s motive).

With video going away from advertising as a funding model, some brands are taking initiative on this front and creating media that has their identity wired into it. BMW sponsored a series of shorts called The Hire with Clive Owen. From the wikipedia article on it:

After the series began, BMW saw their 2001 sales numbers go up 12% from the previous year. The movies were viewed over 11 million times in four months. Two million people registered with the website and a large majority of users, registered to the site, sent film links to their friends and family.

Kmart recently spent $600K on First Day, a web series that represented their brand identity. The characters each wore a specific line of Kmart clothing and the sets were filled with other Kmart products. The show got 8 million views. At least half dozen other brands are sponsoring new or recent shows, including General Motors Co., Sony Corp. and Intel Corp.

Tim Leberecht comments that smart brands are shifting their focus to being constantly “present” in the minds of consumers. “…marketing shifted from broadcasting to narrowcasting, from mass communications to social distribution, from prime time to real time, from paid media to earned (or increasingly) owned media, and from awareness to engagement.”

When the brand identity is baked into the media, it is immune from being “owned” — it no longer matters whether it is shown on TV or YouTube, whether views skip the commercials or ignore them, whether Amazon or Netflix buys the media. When brands inject their identity into great video content, all it needs to have is a compelling story, and it becomes that longed for unicorn that is both well controlled and viral, branded and authentic.

It becomes identity media.

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