Good morning!
The Medium delivers in-depth analyses of the media marketplace’s transformation as creators, tech companies and 10 million emerging advertisers revolutionize the business models for “premium content”.
For my final mailing of 2023, I sent out my Top Essays of 2023 and revisited my Predictions for 2023.
While watching "Maestro" on Netflix, I thought of an uncomfortable question for Hollywood in 2024: In the age of YouTube, why did this movie *need* to be made?
There are plenty of clips of Leonard Bernstein on YouTube, whether interviews, recordings of his concerts or behind-the-scenes of his rehearsals. YouTube’s search engine makes it easy to go down the rabbit holes of who Bernstein was or how he conducted an orchestra (I enjoyed this behind-the-scenes clip of Bernstein conducting “Cha Cha” from “West Side Story”).
On the other hand, YouTube clips do not tell the story of Bernstein's private life with his children or his complicated marriage to Felicia Montealegre. “Maestro” imagines what it meant for Montealegre to be married to a musical genius who was also a closeted bisexual. Bernstein never openly discussed his sexuality in ways that celebrities now discuss their sexuality with the public. It was a topic the culturally conservative media of the late 20th century simply did not touch around powerful American cultural figures like Bernstein. So, there is no video content on the subject, and YouTube does not have any of the “behind-the-scenes” stories that “Maestro” re-imagines.
"Maestro" sits uncomfortably in between the symbiotic relationship between YouTube and Netflix: The two platforms dominate streaming consumption—especially on U.S. TVs as per Nielsen’s The Gauge. Before "Maestro", few (if any) were searching for the original clip of the Ely Cathedral concert. Now, worldwide searches for "Ely Cathedral" and "Felicia Montealegre" on Google Trends are spiking. Notably, YouTube Searches for both topics also trend up but with varying dips in interest for each. Searches for “Leonard Bernstein” on Google and YouTube also have benefitted from a spike in interest. The available data tells a story that Netflix users go off-platform to YouTube after watching “Maestro” to consume more clips (I certainly did so myself).
Key Takeaway
Netflix may regret how “Maestro” unintentionally exposes the weakness in its roadmap as it pivots into advertising.
Total words: 800
Total time reading: 3 minutes
In the past, when Netflix's business model was subscriptions-only, that story reflected a symbiotic relationship. Netflix paid YouTube for any click-thrus that “Maestro”-related content sent back to Netflix (and still does). Today, with Netflix moving into advertising, that reflects an asymmetric advantage for YouTube.
YouTube monetizes clips of Leonard Bernstein, Felicia Monteleagre and Ely Cathedral with ads. YouTube captures some invaluable upside from “Maestro” that Netflix simply cannot capture because Netflix is not in the business of hosting random, user-generated clips of old TV shows or concerts. But, Netflix is now in the business of advertising, it needs to be able to serve audiences with more content.
So, now its value proposition to advertisers is narrower than YouTube’s: The content it will recommend to subscribers after “Maestro” will only be from its library of thousands of titles, few (if any) of which also relate to Bernstein. Whereas, YouTube’s enormous library—more than 500 hours of video are uploaded to YouTube every minute—offers infinite opportunities to generate new ad impressions and valuable data on Netflix subscribers seeking that content.
It is also worth noting that Netflix does not share in the revenues of all “Maestro”-driven viewing on YouTube. Nor does it share in the data generated by the viewing behavior of ‘Maestro”-inspired YouTube views.
A trade-off between advertising & awards
This asymmetry raises the question of whether in 2024, Netflix’s bet on “Maestro” is a trade-off between advertising and awards. For example, director and lead actor Bradley Cooper’s recreation of a concert in Ely Cathedral—filmed live—may deliver an Oscar and/or Golden Globe for Cooper and Netflix. But, it also reflects the opportunity cost to Netflix: The story that Google’s data will tell advertisers can be more holistic than Netflix’s data. A simple question that Netflix cannot answer is: “That person who went to Netflix to watch the actual concert in the Ely Cathedral, what else did they watch? What categories of ads did they engage with on YouTube?” In programmatic advertising models, that data is more valuable in the long run than awards. Multiply this challenge with "Maestro" across Netflix's thousands of original and licensed titles, and this weakness exponentially grows.
On a final note, this asymmetry mirrors one that Electronic Arts management (“EA”) discusses with investors, and which I wrote about in last month’s “Media Executives Covet Games, but Are Ill-Suited to Run Them”. Gamers play EA games like Apex Legends or FIFA and then go to third-party sites like YouTube or Twitch to watch other people playing the games or clips from the games. The data and attention of valuable EA customers are both captured and monetized by third party platforms. There is a symbiotic relationship for these platforms that is helpful because it drives awareness for games. It is also punitive: consumers who leave the EA platform are lost opportunities for engagement, attention and monetization. That results in an asymmetrical relationship with YouTube and Twitch, and one that creates an expensive pain point for EA at a time when advertisers value its first-party data on gamers.
The logical implication here is that “Maestro” should be distributed on YouTube and not on Netflix. That is not YouTube’s business model. It attempted a version of that in the early days of YouTube Red, now YouTube Premium, and walked away from Hollywood production models. There may have been a creative need for the movie to be made, but strategically, Netflix may regret how “Maestro” unintentionally exposes the weakness in its roadmap as it pivots into advertising.