Consumer Trends have Changed Dealmaking

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Samsung Sero TVs are on display at the Samsung booth during the CES tech show, Tuesday, Jan. 7, 2020, in Las Vegas. The TVs can rotate to play vertically or horizontally. (AP Photo/John Locher)
Photo courtesy of the Associated Press (AP Photo/John Locher)

There are three trends in consumption and dealmaking today. 

1. Diversification of platform and content

More and more people seem to be watching television on social media than on television.  More and more people seem to be getting their information on podcasts than talk radio.  More and more people seem to be listening to podcasts than reading books or the newspaper.  Streaming is of course king in nearly all forms of content.    

There seems to be more diverse content at people’s fingertips and available by voice control than ever before and growing by the day.  Consumption seems to increase on distribution platforms, but reducing in watch length over time.  Meaning people are consuming more content over shorter periods of time, everywhere, and anywhere they can access the internet or a download. 

Spotify utilizes an algorithm of user experience to create daily stations.  Spotify also allows users to experience content a consumer might not have listened to before based on that user experience.  The algorithm is not perfect, but it is the wave of the future.  Interactive, smart, and learning platforms. 

2. Monetization of use and ideas

In Salim Ismail’s book Exponential Organizations he proposes that “Once any domain, discipline, technology or industry becomes information-enabled and powered by information flows, its price/performance begins doubling approximately annually.”  He also argues that “The Internet is now the world’s nervous system, with our mobile devices serving as edge points and nodes on that network.”  Ismail also states that the information age is still so young that we have only traveled one percent of the path when considering how much information is collected compared today to ten years ago and is ever-expanding on a daily basis.  However, “One of the most important—and least celebrated—achievements of the Internet during the last decade was that it cut the marginal cost of marketing and sales to nearly zero.” 

If anyone needs evidence of the above, think about how much content is consumed now for free because of information and platform expansion and advertisements on those platforms.  Think about how much less expensive content is to consume now versus yesterday.  Multiple streaming platforms for movies, television, and music are available to the point where this author has personally experienced more content in the last year few years than in a lifetime prior.  In addition, many times consumers forgo watching full length content on social media platforms, which is also free.   

Where platforms can collect data on usage it can monetize that data to reach more consumers and deliver content that the consumer wants.  Often that data includes ideas shared in commenting, liking, and watching, which again can be monetized.  It goes without saying, but industry is able to gain insights from hashtags and user experience that can be available for corporate responsibility and monetization. 

3. Sharing of liability and revenue

Where many of the professional sports leagues and players unions share revenue, there seems to be an increasing call for partnerships in dealmaking.  People having equal liability and ownership.  People equally invested in the success of something.  In some sense, it is the empowerment of content creators and businesses to have mutual success.  There is evidence of this in Netflix offering its creators guarantees and nine figure deals.  There is evidence of this in brand partnerships between athletes and major companies.  And finally there is evidence of this in content creators getting nine figures and keeping ownership on podcast platforms. 

Indeed, consumer trends have changed dealmaking. 

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