FRESH CLIPPINGS
The Peacock x YouTube Bundle
In what some are calling a landmark deal, YouTube has agreed to include Peacock in its premium subscription tier.
There’s a few ways to look at this.
Doug Shapiro frames the deal primarily as a bet on advertising for NBCU. Peacock currently pulls in around $8 a month from subscription fees and $5 from ad revenue per user. Taking on the cannibalization risk to subscription income only makes sense if you believe advertising, along with lower marketing costs and reduced churn, can more than fill that gap.
But from the YouTube side, Samir Chaudry (from Colin & Samir), argues that although YouTube has over 125 million Music and Premium subscribers, it has almost nothing in the way of original programming sitting behind that paywall.
Samir’s take goes as follows:
Last quarter, Google’s subscriptions revenue grew 15% while YouTube ad revenue grew 13%, meaning subscriptions are now outpacing ads, and subscriptions only hold if you give people a reason to stick around.
Netflix has spent the past year signing YouTube talent. YouTube is not going to outbid Netflix for those creators. As Samir says, it does not need to.
What it can offer instead that Netflix cannot is a subscription-funded tier on the platform where a creator’s audience already lives. The path back to original programming is not rebuilding YouTube Originals as some have proposed, but rather financing arrangements with partners like NBCU, where creator-led shows can sit behind the Premium paywall without YouTube having to take on the studio risk or the branding.
Samir’s bet is that YouTube eventually consolidates into a single app covering live TV, a Premium tier with exclusive and licensed programming, and the classic ad-supported experience everyone currently has. One ecosystem, three tiers, the whole consumer in one place.
Instagram’s Scripted TV Boom
It seems that the new indie pathway to finding audience first and nailing that streamer deal is to go through IG first.
Natalie Jarvey recently posted a great story about the Instagram TV boom.
The example she highlights is pretty great:
Aaron Karo and Michael Doneger had multiple projects stuck in TV development, until they decided to stop waiting. Their new show idea was a buddy comedy about a lonely guy who builds a robot best friend, and rather than taking Friend Material around Hollywood, they made it themselves. With a thousand dollars, a camera Doneger already owned, and a few friends willing to help. Twelve episodes, posted straight to Instagram.
Less than three months later, the show has been viewed nearly 1.5 million times, and brands have already reached out about backing a second season. The goal is still to adapt the three-minute episodes into a half-hour series for a streamer or network, but the point is one we’ve talked about for a while here: that they no longer need permission from an executive to prove the concept works. As Karo puts it, when they sit down with producers now, they can show exactly how many people have already watched.
Natalie explores if this is becoming a pattern. She spoke to writer-producer Jon Stahl, who has been tracking the growth of vertically-shot scripted comedies and recently counted more than two dozen, with the number still climbing. Brooklyn Coffee Shop, the epitome of IG TV, has been running for three years and built a real audience around its workplace humor.
There’s more she brings up.
But the lesson is that these shows occupy their own corner, distinct from microdramas, even though they share the vertical format. They are closer in spirit to indie film than to the platform-produced, algorithm-dictated micro-series model.
As legacy media continues to de-risk, it’ll be interesting to see whether shows emanating from Instagram rather than YouTube (like the recent horror hits) will take off.
HBO Goes… Vertical?
HBO just announced HBO Max Shorts, a feature that drops users into a vertical, scrollable feed of clips and scenes pulled from the existing HBO Max library. It’s designed to help people find something to watch rather than spend ten minutes staring at the homepage.
Users who find something they like can then tap through to the full show or film, add it to their list, or simply keep scrolling.
Now, this is not original content (at least not yet?). These clips are existing programming reformatted into vertical clips, processed through an in-house AI tool that uses scene-level metadata to identify high-impact moments, with human editors involved in the final selection.
Netflix is doing something similar with its own short-form clips feature.
The question here is whether this is simply surface-level adapting that ultimately doesn’t move the needle in the great convergence.
Sure, this might be a better way to figure out what you want to watch, but wouldn’t this also be a better way to figure out what HBO wants to make?
Commissioning lower-cost new content for this format and analyzing data to see what works to then scale it up to full TV shows seems like sensible logic. But perhaps trying to compete with TikTok on its own terms is not worth the fight.
Either way, moves like this are worth keeping an eye on.
GARDEN VIEW
HARVEST QUOTE
"If I read or hear one more report about how “Backrooms” and “Obsession” have changed Hollywood forever, or how YouTube is the new New Hollywood (or the new Sundance), I’m going to gag."
— Film programmer and journalist Anthony Kaufman
Love grounding takes like these. It’s worth reading Anthony’s full argument, which includes sobering stats such as the discovery rate on YouTube being 0.000005%.
His full post here.
Have a great weekend…
Great analysis ‼️