In addition to Netflix, Hulu, Amazon Prime Video, CBS All Access, and the upcoming Disney streaming services, AT&T’s Warner Media will launch a superhero-centric service next year. Does it have a chance? Our Chief Strategy Officer explains.
By Brad Berens
DC Entertainment — home to Superman, Batman, Wonder Woman, the Justice League and a part of the recent AT&T acquisition of Time Warner — has announced a new streaming video on demand service called DC Universe that will premiere in 2019.
The service is a competitor to Netflix, Hulu, Amazon Prime Video, and other Over the Top (OTT) services, and it is also unusual in ways sufficiently interesting so that four burning questions are the topic of this week’s column.
How much appetite for superheroes is out there?
DC Universe is narrower and deeper than most other OTT offerings outside sports.
Netflix and Amazon Prime strive to have something for everybody at all times. Hulu also has a cornucopia across all genres, but its main draw is very recent television programming; its movie catalog is paltry. CBS All Access is like Hulu in its TV focus across genres; it also has two marquee exclusive shows in Star Trek: Discovery and The Good Fight (a sequel series to The Good Wife).
The DC Universe, in contrast, is all tights all the time.
The offering starts with old superhero shows: library content that includes movies (like the Christopher Reeve Superman and Michael Keaton Batman films) and TV shows (like the Lynda Carter Wonder Woman show and the 1990s Batman animated series). It also offers exclusive new shows like live action Titans and Doom Patrol series, a new third season of the popular animated series Young Justice, as well as series featuring Harley Quinn and Swamp Thing.
The first burning question is: are there enough superhero fans out there who will subscribe for $7.99 per month for the service to make money? And, if there are enough fans, then will DC Universe have enough programming to sustain their interest for months at a time?
Why is the DC Universe bothering to create a digital longbox and an online social network? In this case, what I really mean is this: beyond the obvious — which is to give established and new audiences access to the source material for the TV shows and movies as well as to each other — why is DC doing this? The answer is what I’ve long called the “multi-strategy strategy.”
Also, as audiences weigh the monthly fees for Netflix ($7.99 to $13.99 monthly), Hulu ($7.99 to $11.99 monthly), or CBS All Access ($5.99 to $9.99 monthly) — not to mention fees for cable and premium cable channels like HBO and Showtime — can they justify another eight bucks each month or will they shuffle their subscriptions when a new season of something that sounds good starts up?
How does DC Universe fit into Warner Media?
AT&T now owns HBO and, according to magazine articles, the new management is telling HBO to pursue a Netflix-like quantity over quality strategy.
Here’s the second burning question: how will the DC Universe fits into AT&T’s total OTT strategy?
Outside whether there will be enough fans and programming to be profitable, there’s another use for the DC Universe: to act as a marketing vehicle for other DC superhero programming like the upcoming Shazam!, Flash, and Black Adam movies, and the Wonder Woman sequel, as well as the various TV shows on The CW (for example, The Flash, Supergirl, and Arrow) or Fox (Gotham).
In earlier columns, I’ve discussed how Disney’s total ecosystem has grown from its roots in the 1950s and can function as a multifaceted promotional vehicle; AT&T could do something similar with the DC Universe.
The “multi-strategy strategy”
The third burning question concerns two unique features of the DC Universe: in addition to lots of video programming subscribers also get a “digital long box” -– a curated and revolving selection of comic books –- and access to a social network of fans who love DC Comics. (There is also an ecommerce store for merchandise, but it does not seem to be exclusive.)
Why is the DC Universe bothering to create a digital longbox and an online social network? In this case, what I really mean is this: beyond the obvious — which is to give established and new audiences access to the source material for the TV shows and movies as well as to each other — why is DC doing this?
The answer is what I’ve long called the “multi-strategy strategy.”
Put simply, it’s easier to convince people to do something if you give them more than one good reason to do it. If the meal you order is both healthy and delicious, then that’s more compelling than a kale salad with no dressing.
The multi-strategy strategy is central to Uber’s business philosophy: getting a ride from Uber is both easier than driving yourself and cheaper than a taxi or driving your own car. (The rides are cheap because Uber subsidizes them, which is why the company is famously losing billions of dollars each quarter.)
Amazon Prime also uses the multi-strategy strategy: you get unlimited two-day shipping and unlimited access to Amazon Prime Video on Demand and lots of music and free Kindle books each month and discounts at Whole Foods, with new benefits arriving all the time… all for one annual payment of $119. It’s a no-brainer.
Because Amazon Prime encompasses so much, it’s difficult to do a head-to-head comparison between Prime Video on Demand and Netflix because Prime feels free (as Center Director Jeffrey Cole recently observed) and Netflix pops up each month on your credit card bill.
Likewise, by including a social network and a digital longbox, the DC Universe is working to make it difficult for customers to include the service in whatever mental math they do when evaluating the costs of different OTT subscriptions. Any head-to-head comparison between the DC Universe and Netflix or Hulu will quickly run aground because neither Netflix nor Hulu provide digital comics or a fan community.
Digital technologies erode the analog conventional wisdom of creating easy head-to-head comparisons among competitors within a category (Crest versus Colgate, Bank of America versus Wells Fargo, Ford versus Chrysler, Chevron versus Shell).
Instead, the savviest digital businesses pursue incomparability, striving to be unique rather than the best in a category.
The fourth burning question is simple: will the DC Universe’s exclusive superhero shows be any good?
Brad Berens is the Center’s Chief Strategy Officer.
See all columns from the Center.
July 25, 2018