YouTube’s growth highlights an insidious and poorly understood byproduct of the disruption process: when consumers’ definitions of quality change. And there’s pretty much nothing incumbents can do about it.
Most people get how disruption happens: Barriers to entry fall, new entrants come into a market with an inferior product, but over time it gets better and eats into the incumbents' share, etc.
Here’s the part that a lot of people don’t get: New entrants don’t only compete on the traditional measures of performance. Often, they also introduce new attributes and, if those resonate with consumers, they change what consumers value – they change the consumer definition of quality.
A couple of months ago, I published a series of posts detailing four tectonic trends in media, including fragmentation of attention. (https://lnkd.in/eE2nd5bS)
I explained that fragmentation is happening across media for two reasons: 1) falling barriers in production, marketing, distribution and monetization are resulting in an explosion of content; and 2) while most of this content is crappy by traditional measures of quality, the consumer definition of quality is changing. New attributes that consumers value include authenticity, relatability, relevance to my chosen community, undiscovered, etc.
In the last couple of weeks, a few data points have underscored this is what’s happening in TV right now.
* On Tuesday, Nielsen released The Gauge report for March, showing that YouTube now represents almost 10% of all viewing on TVs in the U.S., a new high water mark. For a long time, the argument was that short-form/UGC is not competitive with professionally-produced content because it serves a different use case. But this is exactly the same use case: watching on a TV.
* BCG, Accenture and Deloitte all published new surveys in the last few weeks showing what many of us sense intuitively: many consumers, especially young consumers, say they prefer short form/UGC over professionally produced content.
All of this is highlighted in the slides below.
Big media companies are scrambling to do what’s within their power, like find the next hit; optimize yield management on their ad inventory; reduce costs; figure out how to price, package and bundle to reduce churn, etc.
But there’s not much they can do to fend off a changing definition of quality.