Thread by @EntStrategyGuy

1/ A non-coronavirus topic I’ve meant to address via thread.

It’s hard to launch a new streamer because operations are hard.

And that has lessons for every player in the streaming wars.

2/ To be clear, I’m distinguishing here between operations at a studio and producing a TV show. So this will be a bit of a primer.

Said another way, most streamers are building their own “studios”, when maybe buying one would have been much easier.

3/ Most studios don’t do the actual work of producing their own shows. Instead, they hire a lot of smaller production companies to produce the shows, and pay them for that work. (Why? To keep headcount low and limit liability. And that’s just how it’s done.)

4/ Still, even if you aren’t doing the actual production, studios still have teams manage this. Which are usually called “Production”. And by teams I mean armies of people.

5/ In addition to Production, studios have business affairs negotiating contracts, creative development picking shows, finance approving payments and marketing to build buzz.

6/ In all, studios like Disney, Fox, Warner Bros, Universal, Sony and Paramount have thousands of people focused on these efforts. The TV networks themselves have additional hundreds of folks.

7/ What are all these people doing? Coordinating everything. Frankly, producing a TV show is investing in an 8 figure project. And all these projects need to be completed on a schedule so the network/studio can have content year round.

8/ Again, this is an operational challenge and while it may seem needless for the studios to have thousands of people working on this problem, there are processes and people set up to handle lots of issues.

9/ I use “operations” deliberately because it captures much of the challenge. Coordinating hundreds of people requires lots of effort. Processes, headcount, procedures and technology are employed to keep the studios running.

10/ How does this apply to the streaming wars?

Well, my gut is a few of the new streamers (and the old ones) thought they could circumvent hiring thousands of people. And well they couldn’t.

11/ For instance, Apple is building a studio on the fly right now. They could have acquired a studio but said, “We’ll follow Amazon’s example and just build a studio by hiring the right people.” In particular, the two former heads of Sony TV.

12/ But inheriting a fully functioning TV studio is different from building one from the ground up. And as a result Apple has a lot of delayed shows. Lots of over budget shows. And a very uneven release schedule.

13/ All of which described/describes Prime Video. Bezos had pretty much the same thoughts. Instead of buying a network or studio, I’ll just build one from the ground up. From what I’ve heard, they’ve also always tried to shoestring the headcount too.

14/ My gut is Hulu had the same problem. That’s why their originals have been slow to build steam and essentially the plan is to give Hulu’s production over to FX, which knows how to do it. And has the operations capacity to own it.

15/ Speaking of Disney, even Disney screwed up Disney+. From what I can tell, they thought a small team in Burbank could just collect TV shows from all the sprawling parts of Disney and have a steady flow of content.

16/ But that hasn’t worked. You need lots and lots of people to manage even productions within the same company. To just ensure the trains run on time.

Things were delayed even before coronavirus, which has exacerbated the problem.

17/ As for the new streamers—Peacock and HBO Max—I’m more optimistic. I think the previous head of content for NBC Bonnie Hammer will make sure Peacock is up and running. HBO Max is also basically an extension of HBO.

18/ So we’ll see if their originals fare better than Disney+. Meaning they come out on time, regularly and on budget more frequently. (And new seasons happen within 12-14 months.)

19/ So who has been the best at this? Netflix.

They built a studio at scratch by throwing tons of money and people at the problem. Which is how they’ve scaled to the size they have in both US and international productions.

20/ In other words, they built up an operational capacity by throwing enough headcount at it. And, notably, taking a lot of time to get there by relying on their supply of licensed content.

21/ What about Quibi? They’re a bit more of a black box for what they have and haven’t done.

They seem to have been an outlier since they had a TON of content at launch.

22/ The caveats are: 1. We'll see when the next tranche of shows come to Quibi. That's really the operational challenge.

and 2. A lot their "TV shows" are really just movies. Which are easier to produce/buy than TV series.

Oh and how will coronavirus impact all of this? Will try to address tomorrow.