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The real winner: Donald Trump
I’m not referring to the election. By all accounts, both scientific and anecdotal, he’s well on his way toward a loss. Rather, I’m referring to the one and only thing he’s been successful at in his career: Entertainment. He’s poised to achieve something that every major media company in the world has been struggling to crack. In fact, their future depends on getting it right.
Taking a look at Trump’s tweets yesterday morning, political pundits were confused. “What’s the strategy?” they ask. They perceive a man in meltdown mode. He’s railing on his own party and his party’s leader with insults that will forever be carved into the world wide web, never to go away. There is no recovering politically from this state of affairs.
Their lens is off, though. I’m sure Trump is dead serious about getting elected president. But there’s another plan coming together that’s clear as day for anyone currently working in television or online media, which is the marketing campaign he’s running in anticipation of launching a new right-wing news network, likely a digital, over-the-top network — one that could rival or even supplant Fox News.
When Fox News emerged in 1996, cable television was at its zenith. More and more homes were signing up for ever more channels. Fox correctly identified that there was a large audience of conservative-leaning Americans who weren’t getting served by any of the news networks. They consumed their news media through talk radio. Fox News has since risen to the top of the cable news pile in both ratings and revenues.
Over the last 10 years, however, the internet has begun to eat TV ratings. We’ve seen monumental shifts in entertainment consumption, with YouTube garnering more viewership in primetime than the Top 10 TV shows combined, and stalwarts like ESPN facing a decline in subscribers for the first time in their history. It’s evident that the decline isn’t due to a lack of interest in sports. It’s that sports are available more frequently and efficiently via a mobile device and the internet. It’s an issue Disney is addressing.
Cable television has been the backbone of the entertainment and media business for a few decades now. The dual revenue streams of subscriber fees and advertising generate lots of money and represent a disproportionate chunk of the earnings of the major media companies.
So this is a big issue that Disney, Fox, Viacom, Comcast, Verizon, AT&T and others need to solve for, and an area where new entrants like YouTube are hoping to find their way in. The solution? Over-the-top network offerings — essentially, mini-cable channels that charge subscription fees ranging between $2 and $10 per month, the idea being that a consumer can access the channel on any device and watch on demand.
These media companies hope a solution like this will replace the downward trajectory of traditional television. Major efforts include Verizon’s Go90 and YouTube’s Red service; independent efforts include an anime-focused brand called Crunchyroll and Lionsgate’s fanboy-centric Comic-Con HQ.
The problem is that none of these folks have achieved the revenue scale of cable TV (yet), at least as far as they’ve publicly shared. And it’s indisputable that the industry hasn’t identified a replicable OTT model. It’s a scary prospect for companies like Viacom that are solely reliant on their television channel brands. It’s an experimentation game today and the early winners will reap massive rewards.
Now, through this lens, imagine you had a firebrand TV star, the founder of the leading right-wing website, the founder of Fox News and a presidential platform through which to solidify the next would-be Fox News brand. That is the most compelling set of ingredients for a new OTT service that I’ve ever seen.
I’m also not the first to recognize this. Glenn Beck has created a successful subscription service called The Blaze, which marries an ad-supported news site along with premium video content. For all intents and purposes, it’s an early OTT effort. He’s one of those with the most to lose with the advent of a Trump/Steve Bannon right-wing news network — it would be direct competition. Beck has been raising the flag about this for a couple of months.
Glenn Beck’s competitive concerns aside, the environment is ripe for the successful launch of an OTT service. Consumer behavior has massively shifted to online and mobile viewing, with the majority of YouTube’s views, as an example, happening on mobile devices. Smartphones and service providers can easily handle video streams with even just a modicum of service.
The only piece missing is the content offering that would appeal to millions of people in the U.S. and around the world and enough visibility and momentum to convert them into paying subscribers. I’m reminded of the VOD performance of Sony’s film “The Interview,” a comedy lampooning North Korea. Given that Sony was hacked by the hermit kingdom, and ostensibly we all faced the threat of nuclear attack, the movie received an unprecedented amount of media attention. Simultaneously, it was pulled from theaters due to the same threat and public pressure.
So it was released online. It then proceeded to generate over $40 million from VOD. That’s an unprecedented number, and rivals a traditional film release.
Gee, if only every digital film release could receive the undivided attention of the entire world, we’d all be happy campers in my corner of Hollywood. Well, it seems we have that unique circumstance again with Donald Trump, and it may just be enough of a catalyst to help him build the foundation for the most successful OTT service to date.
A veteran of the online video business, Max Benator is the founder of Supergravity, an entertainment studio that specializes in the production and digital distribution of chart-topping films and episodic entertainment. Additionally, Benator is partnered with Fine Brothers Entertainment, a digital production company with more than 20 million subscribers across its YouTube channels and a monthly viewership of over 100 million. Reach him @benator.
This article originally appeared on Recode.net.
