The streaming wars are heating up. In March, Disney
delayed the release date of Obi-Wan Kenobi to May 27 to coincide with the
launch of Netflix’s top show, Stranger Things. This on the back of Google’s
announcement YouTube Shorts had matched TikTok’s 1.5 billion subscribers in the
short-form video market.
Facing increased competition, falling subscriber numbers, and loss of content, Netflix and TikTok are having to diversify. And for this,
they’re turning to games. With more than three billion players worldwide
and an estimated market share of US$200 billion, the gaming industry is both popular and lucrative.
Netflix introduced mobile gaming last year for all its
subscribers. This included two notable Stranger Things tie-ins. Meanwhile,
TikTok has offered games to select users since 2019 and seems very likely to expand these offerings.
Both Netflix and TikTok have
transformed the entertainment business.
They appear diametrically opposed on the surface. The former gets
revenue from subscriptions, and spends millions of dollars on licensing or
creating content. The latter makes money by linking viewers to advertisers,
with the help of streaming “influencers” who have mastered the art of
short-form video.
However, the two platforms share some
key characteristics. They both:
deliver video content via the internet
aim to constantly grow their user base
benefit from unique and original
content
collect user data and use it to
improve their services, and
face considerable and rising
competition from other companies and entertainment media.
Many well-loved films and television
series are departing Netflix for competitor platforms. At the
same time, TikTok is also losing short-form video influencers to other platforms. Both platforms are seeking new strategies
for subscriber retention, growth, and original content.
This is where gaming comes in.
According to one consumer insights report, 79% of the world’s online population engages with games in some form. And millennials
rate gaming as either the most popular, or second-most popular entertainment
activity – behind watching other people play games on video platforms.
Why is gaming an attractive space?
Games typically afford longer
engagement periods than series or movies. This is due to the psychological principles of motivation that underpin most
gameplay.
People invested in games will often
seek out additional narrative (or “lore”) in the form of shows and movies.
Alternatively, audiences invested in shows may also look to video games to
provide alternative narratives and opportunities for world-building. So shows
lead customers to games, and games keep them engaged between season releases.
This technique of telling a story
across multiple platforms and formats is known as “transmedia storytelling” and has been used with great success by broadcast, social media and
gaming companies. This is what platforms are banking on to keep audiences
locked into their entertainment ecosystems.
Content creation has boomed since the pandemic, and younger audiences are
spending more time than ever watching user-generated content online. They have
been particularly tuned into games such as Crab Game (a fan-made version of the popular
Netflix show Squid Game) – which also has millions of view hours on the streaming service
Twitch.
The rise of Minecraft as a popular “modding” game (in which players can collectively
transform the game space through their own modifications) has also helped video
streaming and subscription services. Minecraft-related videos have been
streamed more than one trillion times on YouTube.
Transmedia success provides additional
avenues for companies looking to leverage their licensed or original
copyrighted content.
Intellectual property and data
analytics
We know games promote attention,
motivation, emotion, and socializing among players.
Companies such as the game-hosting
platform Steam have demonstrated user data can influence the creation of new
content by game developers. In fact, this is a market advantage that Netflix
and TikTok have over rivals.
For example, one could easily imagine
that a character who is popular in a game, as revealed through gaming data,
would also be more likely to feature in an upcoming show based on that game.
Netflix and TikTok can lose big
When we speak of the streaming wars
and greater competition, it’s not a level playing field. There are crucial
differences between Netflix and TikTok, and other players such as Disney+,
Amazon Prime, Apple TV, and YouTube.
Netflix is in the streaming business,
and TikTok in the video-hosting industry. On the other hand, based on revenue
Disney is in the theme park and toy business, Amazon in the online sales
industry, Apple in the computing and phone industry, and Google in the search
and advertising industry.
For these companies, streaming and
video hosting is a small side business that provides useful data to feed a
greater machine. So in the “streaming wars” they don’t have as much to lose, as
they can run these side businesses at a loss.
Netflix and TikTok aren’t so lucky. By
turning to games, they’re grabbing onto a lifeline they really need.
Source: thenextweb