Last month “NewTV” closed a $1 billion funding round. This fresh content network is a joint venture between two industry tycoons, the former CEO of Hewlett-Packard Meg Whitman and the founder of the Hollywood Studio DreamWorks Jeffrey Katzenberg. In a recent CNBC interview both promised that the platform will disrupt Hollywood as HBO did in the 1990’s.
This is a big claim, so how do the duo intend to achieve this? It aims to create content with the biggest production networks (Fox, Viacom, Sony Pictures, Lionsgate and MGM have invested). Sounds familiar? You may be thinking of Hulu.
The twist is that the new platform will offer content created specifically for mobile viewers. Mobile traffic overtook desktop traffic for the first time in late 2016 and NewTV intends to capitalize on this shift to allow its viewers “to make the most of every moment of their day”.
The question is, can NewTV learn from the crucial mistakes that plague startups? It’s not looking likely, so far.
Here are the conflicts NewTV is running into and how you can learn for your innovation projects:
Just because you know the industry doesn’t mean you know how to disrupt it.
While the duo certainly has the experience, seniority, and ability to make these big deals, the team appears to be desperately lacking some young blood that could offer an outside and truly transformative perspective.
Both Whitman and Katzenberg are coming at the industry from within, equipped with an insider knowledge and this perspective limits their ability to create truly transformative ideas. Rather than creating some new type of content delivery the idea appears to merely elaborate upon the existing framework.
Lesson: Industry knowledge is a powerful thing but if an innovation project is pursuing unadulterated innovation it is often better to know nothing rather than everything. This helps to offer a unique and outsider perspective that hasn’t been shaped by an industry’s way of thinking.
Money presents opportunity but investors have their own agendas.
Closing a $1 billion funding round is no small accomplishment and the NewTV founders should be proud. That capital will go a long way to building the platform they have envisioned and getting the project off the ground.
The founders may feel they have the world at their feet but they will come to discover – as Hulu did – that their investors have their own agendas in a competitive space. These agendas often conflict, too.
In 2007 Hulu had three main controlling parties. Disney’s recent acquisition of Fox, however, gives it a majority rule and Hulu will inevitably become more of a walled garden as Disney assumes total control. This move has seen Disney pull its content from Netflix as it gears up to release its own direct-to-consumer platform next year. Another complication for Hulu.
Lesson: It’s true that too many cooks spoil the broth. The more stakeholders and investors involved in a project, the greater the amount of effort that needs to be spent managing people’s interests rather than pushing the project forward. For innovation projects to succeed they need to establish clear rules of engagement between their interest groups and avoid making the project the epicenter of conflicting interests.
Switching the frame doesn’t make the picture sexier.
Restrictions and limits often foster creativity: Vine allowed its users to demonstrate practically boundless creativity with a maximum length of 6 seconds per video clip, Twitter’s character limit (despite being recently expanded) encourages extra effort to be on point and Musical.ly (recently rebranded) restricted its users to relentless focus on 15 seconds of music content.
NewTV plans to reduce the length of content to offer programming in 10-minute slots rather than the average of 22 currently taken by sitcoms. But rather than being driven by innovation or a love of creativity this decision seems to have been made based on market research and hype around mobile audiences.
Given that there isn’t a distinct or dramatic innovation, the platform will come to rely on conventional promotional methods and a breakthrough hit for success – just like other platforms in the space.
This is dangerous and the founders should have learned from the mistakes of other platforms. Take Hulu, for instance. It never managed to find that breakthrough hit and that’s why it is simply a platform that recycles content rather than creates it and ran into severe financial trouble. The platform lacks the spark that creates unique content and helps it to stand out from the crowd.
Lesson: Radical restrictions can lead to creative results. It is important, though, that these restrictions are put in place to truly transform something rather than just move the goalposts. When approaching a new idea or project it’s a good exercise to remove one essential component and see how this alters the premise. Think, for example, how the project might look if there was no funding or the delivery time was half of what it currently is.
It looks as though NewTV – despite its promising foundations – has not learned from the mistakes that have plagued other innovation projects. It is going to be an exciting show to watch if they are able to land that one big hit or if they end up with another Hulu.
Make sure that your next project does not fall victim to the same mistakes. Inject fresh perspectives into old problems to create truly transformative solutions, remain conscious of the number of stakeholders involved in your project and experiment with radical restrictions to truly change the game.