The battle for consumers’ attention

TWO ENTERTAINMENT TITANS dominated the charts for the last few months of 2016: the mighty Walt Disney and Ryan, a five-year-old boy. Disney’s blockbuster films topped America’s box office in nine of the last ten weeks of the year. Ryan’s YouTube channel, featuring his parents’ daily videos of him at his home in California, was the site’s most watched in America for the last 20 weeks of the year. Most of his audience is made up of children in his own age group, gleefully looking at him unboxing and playing with toys, some of them from the Disney empire.

The internet has made the lottery of stardom available to anyone with a smartphone. This allows for a few random individual winners like Ryan, whose parents have earned millions of dollars from advertising on the channel in a couple of years; or for an everyman in China’s rustbelt to become a live-streaming celebrity. But the real business of entertainment is about owning one of the handful of digital platforms that can command consumers’ attention, including the one that made Ryan a star.

That is why Google’s purchase of YouTube in 2006, for $1.65bn, and Facebook’s acquisition of Instagram five years ago, for $1bn, now look inspired. The idea behind Facebook’s $22bn bid for WhatsApp three years ago was also to increase the company’s hold on users’ increasingly fragmented attention: most people look at their phones dozens of times a day, and messaging is often the first thing they do. As video becomes more integrated into messaging apps, that purchase will look even smarter.

The industry is now trying to guess whether the global leader in blockbuster content, Disney, will also buy a distributor. Under Bob Iger as CEO, the company’s strategy has been to buy up the best intellectual property in entertainment: Lucasfilm and Star Wars; Marvel Entertainment; and Pixar Animation Studios. Under Disney’s control, each of these brands has become even more valuable and even better-known globally. Disney gets a huge amount of attention. But since people are watching less traditional TV and consuming more video in other forms, even makers of great content are at risk of losing audience, so it may make sense to own a platform on which it can be served up.

Hollywood has recently been pushing the idea that Disney might buy Netflix, the global leader in streaming premium entertainment (including Disney films). In an interview with The Economist, Mr Iger was careful not to comment on Netflix, since even a denial that the idea was under consideration might have moved markets. He envisages a future where each of his company’s famous brands can be its own entertainment service, so there would be an internet-only “Star Wars” channel, a Marvel channel, an animation channel and so on. ESPN, he says, can become the “Netflix of sports”.

A bit much

The entertainment business is a never-ending and ever-intensifying war for consumers’ limited time and attention. Around the clock, each minute is contested by companies like Facebook, Instagram, Google, YouTube, Snap, Amazon, Disney, Comcast, AT&T, Sky, Fox and Netflix. Consumers can take in only so much of what is on offer. As this report has shown, faced with an overwhelming array of choices and guided by menus, digital rankings and suggestions calculated by algorithms, they increasingly pick from just a few of the most popular items. Technology and media companies are doing their utmost to induce users to spend even more time on each of their platforms every day. From tweaking algorithms to stepping up notifications to endlessly scrolling feeds, technology has turned human distraction into its metric of profit.

As this report has shown, the good part of this is that almost every imaginable bit of entertainment is now at the fingertips of billions—around the world, across social and ethnic groups and appealing to all tastes, including some that people did not previously realise they had, like watching others play games or unbox toys. This seems intuitively democratic and welcome. But despite all these available choices, technology increasingly shapes what humans select, steering them towards what is most popular and most distracting. In this way the digital age has concentrated the power to entertain on a fortunate few, rather than distributing it along the long tail.

A battle for dominance is taking shape in two different arenas, of free (ad-supported) and premium content. The first is being waged by the social platforms that trade in users’ eyeballs rather than subscriptions. The ability to amass great scale, thanks to network effects, will make them difficult to dislodge as providers of free entertainment—especially so in the case of Facebook.

In the second arena, providers of premium content like Netflix and Amazon are competing against the traditional media powerhouses to see who can persuade the most people to pay for their products. This is an expensive battle in which the ultimate winners are still far from clear. Netflix will spend at least $7bn this year on content, including on new programming in countries around the world, in a bid to become a global TV network. Its rivals are also spending billions in an arms race that, for now, is producing the best (and the most) television in history.

There is a limit to how much people can consume, and how many services they will subscribe to

Yet there is a limit to how much people can consume, and how many services they will subscribe to, so some contestants are bound to fall by the wayside. In the attention economy it pays to have the biggest platforms and the flashiest brands. Technological progress might yet tilt the playing field to a newcomer, especially if some visionary of virtual or augmented reality comes up with anything close to the fantasies of science fiction. In parallel to such efforts, there will always be a market for unique live experiences that yank people away from their screens, be it a giant rock concert or an intimate sleight-of-hand performance by a master magician.

But whatever the arena, the biggest crowds will increasingly gravitate towards just a small number of the most popular hits. Until recently that was seen as a natural consequence of the physical limits on production and distribution. It now turns out that, even in a potentially unlimited digital marketplace, social networks, rankings, recommendation algorithms and the like focus people attentions on just a few items in the same way. The story of mass entertainment in the internet age is a paradox. Technology has given people too many choices, and then instantly relieved them of the need to make them.