Signal in the Noise Vol. 232: Why channel legibility could become media’s new moat

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Signal in the Noise Vol. 232: Why channel legibility could become media’s new moat

Barclays | Signal in the Noise Vol. 232

One way for Netflix to deal with this could be to fragment content itself with its own doomscroll.

AI capabilities such as enabling summary versions of shows and movies instead of full episodes

or aggregation of clips (best comedy clips from Netflix shows or some other automated cuts of

content for instance) in a free tier (please see Signal in the Noise Vol 185: Why Netflix needs to

consider a free tier, 27 Sept 2024) could help drive up engagement and help compete more

effectively with platforms like YouTube and TikTok. This, however, will need significant increase

in content volumes to enable enough critical mass for binging through summarized shows,

which could be expensive. However, another approach could be to lean into the intentionality

of consumption on the service by investing in content that pulls in deliberate viewing. This

would also insulate the service from reaggregation risk which could create further engagement

risks. This is where sports and franchise content could help and may partly have been the intent

behind the company’s bid for WBD. In other words, Netflix may need to choose between

becoming more of a destination or becoming more of a feed or some combination of both.

This could also be a viable model for other forms of content. In a world with unlimited content,

legibility will become more important, which in turn may result in destination gravity favoring

heavily curated, premium content channels. We wouldn’t be surprised, for instance, if premium

magazines became more relevant in an AI world and even AI-generated content within walled

gardens like NYT or WSJ are monetized better than say commoditized AI-generated news on