DISTRIBUTION 103: The Tipping Point

By Rodric David

Rodric David with a camera at Thunder Studios, header image for the Distribution 103 blog post.
Rodric David on the set at Thunder Studios

I believe that we are now at the tipping point of massive change in the global distribution of video content in all its forms. Within the next 10 years I predict the complete overhaul of global video content distribution which will radically change the way we consume it and the way we engage with it. Inevitably, this will lead to the destruction of many traditional content distribution conglomerates and the emergence of new, more agile companies that take advantage of rapidly evolving technological advances without the burden of legacy investments and relationships. The battle for consumer eyeballs is just beginning, and the battleground is the pockets of a global audience with a mobile device and access to broadband internet.

Rodric David, smiling with arms crossed, in official headshot as the Chairman and CEO of Thunder Studios
Rodric David is the Chairman and CEO of Thunder Studios

Distribution has always been the great barrier separating content creators and their audiences. Film distribution has been controlled by the major Hollywood Studios and television distribution by the Cable and Satellite Television Distributors. Historically, independent content creators had to develop pilots to pitch traditional television and cable networks in the hope that the network would purchase the programming at a fee that might recover the production cost. Similarly in film, independent filmmakers had to raise equity from various sources, often family and friends, to produce their film and then hope it could be sold to distributors at a price that would recover the cost of production.

High speed broadband networks, mobile video screens, and emerging content platforms completely upend the way content can be distributed. The launch of YouTube in 2005 and its purchase by Google in 2006 commenced the disruption to content distribution. Today, in a single upload, content creators can reach a global audience without any cost of distribution. Content creators are no longer burdened by Network or Studio oversight and involvement in the content they upload; they have total creative control. Using Google’s Ad Sense monetization, individual creators can earn money based on the number of views their videos receive.

Tens of thousands of content creators exist around the world using YouTube and other platforms to distribute their original content. The most subscribed YouTube creator is Felix Kjellberg, a 26 year old Swede, whose online alias is PewDiePie. PewDiePie principally uploads a daily 20-30-minute video of himself playing video games whilst providing commentary on his game play. He has 43million subscribers and has just surpassed 11,000,000,000 (11 billion) video views. To put this in perspective, the largest cable television distributor in the world is Comcast with 22 million subscribers. PewDiePie and other successful YouTube creators point to the future global democratization of content creation and distribution. Psy, A South Korean pop star famous for his song Gangnam Style, is the creator of the single most viewed video on YouTube. The music video sung entirely in Korean has been viewed 2,555,000,000 (2.555 billion) times. Real Grumpy Cat, a channel starring a cat that looks Grumpy, has 232,000 subscribers and a total of 34 million video views.

Consumer acceptance and rapid adoption of recent technological advances in mobile devices, Content Delivery Networks (CDNs), streaming networks such as Netflix and Amazon Prime, and emerging OTT (Over the Top) Networks such as Vimeo, Twitch, and Crackle will accelerate this democratization of content distribution. What does it mean when audiences below the age of 35 are watching more non-traditional content than traditional? What does it mean when a 26 year old Swede can have a larger subscriber base than the largest cable distributor in the world? What does it mean when more people watch Minecraft videos than actually play the game? I look forward to addressing these questions and the upcoming Content Revolution in a future post.