This article isn't about television and movies. It's not about YouTube and TikTok. It's about startups and entrepreneurship.
But it's also about television and movies and YouTube and TikTok.
Because all those things are converging and not enough people are taking it seriously.
ARTICLE BY JOE PROCOPIO, FOUNDER, TEACHINGSTARTUP.COM @JPROCO
I'm Dead Serious About This
Look, we're all aware that there's a zillion dollars floating around YouTube and TikTok. And creators are grabbing for those dollars like a kid in a ticket tornado booth at a Chuck E. Cheese. I'm not going to waste your brain cells talking about how making videos for ad money is the new startup. It's not.
My premise, crystallized in the title of this article, is speculative for sure, but also very legit and serious. Look, the bromantic notion of entrepreneurs building microcomputers in California garages is dead. The days of pitch-deck road shows to fund the next SaaS product nobody needs and fly-by-night accelerators hawking 12-step Successories to Elon Musk wannabes are waning.
At the same time, something worth funding has to come after this AI wave crashes. Artificial intelligence is likely the high-point of modern computer science, at least until they start injecting code directly into our brains. And that's just unpalatable.
No, the next wave of entrepreneurship is going to take a step forward by taking a step back, the same way it always does. Just as previous generations of entrepreneurs rode contemporary technological gains to digitize our shopping, then socialize us, then mobilize us, future entrepreneurs are going to exploit recent tech advancements in a singular quest to entertain us.
And yes, that's happening now, to an extent. Still though, at the time of writing, this week's box office champ was the third version of a Willy Wonka story that first lit up the silver screen 52 years ago.
So before I make the argument that creators are the new entrepreneurs, I need to line up all the dominoes that detail the fall of the entertainment industry.
The Writing Is On The Wall In 96-Point Helvetica
Let's start with television. Dead.
I can't speak for you, but I also can't think of a network-based television show (NBC, CBS, ABC, Fox) in the last 15 years that I've thought to myself, "Wow, I'd like to watch that." And if you bring up the golden age of television that started with The Sopranos and HBO, I'll raise you squid games and Max.
It's over. Television and cable haven't been relevant in a decade.
Movies. Dead?
If you were to use one word to describe the year 2023 for movies, what would you pick? Because I'd go with "bomb," and not in the Oppenheimer sense. If you allow me a couple more words, I'd go with "expensive, unexpected, historic bomb."
Raises the question: Was it just an off year? Maybe the last of the pandemic impact? Or is it a pattern? Did they all just suck? I don't know. I liked the new Indiana Jones movie when I saw it for free. The rest of the bombs I didn't see because... I didn't bother.
And that's my point with the current state of entertainment. Books died because print died, but screens have only become more pervasive. Television and movies are choking on apathy.
Apathy kills incumbents and breeds startups.
So in effect, yes, these YouTubers and TikTokers and Twitchers are the new entrepreneurs, in the sense that there's a gaping hole in a massive industry that generates tens of billions of dollars annually for which almost no one is funding the content coming from the disruptor class.
Even the tech companies who spent billions on high tech streaming platforms are seeding those platforms the old-fashioned way -- throwing Jennifer Aniston and Steve Carell out there in a show about how television used to work 30 years ago.
The problem with The Morning Show is that no one watches morning shows.
The kids don't care.
The Numbers Are Quet, But They Don't Lie
Back in August 2023, while the entertainment industry was striking and negotiating and shelving blockbusters for the tax write-off, Nielsen let everyone know that linear television had fallen below 50 percent of all viewership for the first time ever.
They also mentioned that "cable usage had dropped by 12.5 percent since this time last year, accounting for less than a third of viewers' time, while broadcast TV slid to just one-fifth of total watch time in American homes."
The studios can live with that, right? Because all those streaming services were about to harvest the rewards of a cavalcade of entertainment that no one bothered to see in the theaters. Blue Beetle was on the way to save the second-string streamers, not to mention the Marvels and Indianas and Shazams and such.
But there's another issue: Netflix is still eating everyone's lunch and that probably isn't changing. As noted in TV Scientific (December 2022): "Subscriber loyalty is a problem, as many users tend to take advantage of free trials to watch a few shows and then cancel. The average churn rate is 37 percent, and it's over 50 percent for Millennials and Gen Z."
If my churn rate was 37 to 50 percent, I'd shut down my business and apologize. A lot.
In 2023, I went from watching zero YouTube to watching almost nothing but. And I'm not doing this waiting for the bus or laying in bed scrolling on my phone until my eyeballs bleed. I'm sitting down with popcorn on the couch in the living room for 15 minutes to two hours at a time glued to a 75-inch screen.
But Wait. YouTubers Are Not Entrepreneurs.
No. They're not.
But some of them are.
Engineer Mark Rober effectively turned his glitter-bomb prank into a subscription box to help turn more kids into engineers (or more to the point, turn more parents into parents of future entrepreneurs). And Mr. Beast, whom I'll admit I have never actually seen in a video, just launched his own analytics software, ViewStats, which he and his cofounder funded with their own money.
Money which came from -- here it is -- paid ads and sponsorships tied to his YouTube videos.
They're the exception. For now.
Yes, venture capitalists are funding creators already. And while I believe they're going about it the wrong way, I'll also be the first to tell you that Amazon wasn't the first eCommerce company, Facebook was far from the first social network, and Apple didn't launch the first smartphone.
Venture capital funded these things into existence while the previous generation of VCs were looking for the next Hewlett-Packard.
Creators are starting to figure out that once they reach a certain level, they don't need YouTube or TikTok or Twitch for the income. Discovery is the platform's strength, but once you've been discovered, if you're smart enough to do the math, you're probably smart enough to take control of your top line. And you've probably got the money to fund the venture yourself.
Is there deal flow there? It's too early to tell, but at least it's hopefully the end of the influencer era.
For now, creators have realized that the fame and money they get on a digital platform isn't a step to the next level, it's starting to look more and more like the top level. Why take scale to do a guest stint on a network reality show when you can just launch your own company and keep all the money?
When they figure that out, that's when things get interesting.
Re-Published from Inc. online
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