Netflix vs TikTok vs Disney vs Facebook: battle of juggernauts

Who’s winning in the media and entertainment battles? We are currently seeing an epic battle in the mobile space for consumer time, attention, and dollars.

Two of the biggest juggernauts are short video versus long … think Netflix vs TikTok, Disney+ vs Reels, with many more combatants and some like YouTube and Facebook with stakes in both sides.

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What’s happening here … and who’s going to win? And why did Tiktok just have the biggest quarter of any mobile app ever?

In this TechFirst, we chat with CEO Ted Krantz about what’s happening in apps, entertainment, video, and … yes … books and graphic novels. Check out the story on Forbes, or keep scrolling for full video, audio, and a transcript …

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Transcript: OTT, video, entertainment, and where Tiktok, Netflix, Facebook, and YouTube compete

TF245 –

(This transcript has been lightly edited for length and clarity.)

John Koetsier: We are currently seeing an epic battle in the mobile space for consumer time, attention, and dollars. Two of the biggest juggernauts are short video versus long. Think Netflix versus TikTok, Disney versus Reels, with many more combatants on both sides.

Now some, of course, like YouTube or Facebook, have stakes in both sides. What’s happening here and who’s going to win? To figure it all out, we’re joined with CEO, Ted Krantz. Welcome to TechFirst, Ted.

Ted Krantz: It’s my pleasure to be here, John. Hello. Good to see you again. 

John Koetsier: Hey, great to have you. And wow, that is a tongue twister right there. I want to get into the winners and the battles that we talked about — and the stakes — but first, you just published a blog post today about TikTok, and it was a little bit mind-blowing.

I mean, we’ve seen a lot of superlatives about TikTok. We’ve seen the download counts, the billion users plus, all that stuff, but TikTok just had the most profitable quarter ever of any app, correct?

Ted Krantz: It is just mind-blowing to watch what TikTok is doing, setting all kinds of records, now expanding into the other categories like with SoundOn and the new app there and start competing for music. But yeah, it’s a mind-blowing trend.

And I think what’s interesting is also when you look at the time spent there, right, for Gen Z, they’re kind of in the pole position on mobile and they are spending three times as much — as hot as OTT is — three times as much in short-form video than they are in OTT. So that’s pretty crazy.

John Koetsier: Well, we’ll get into that.

So: $840 million in Q1, 2022 for TikTok.

You just released a big media and entertainment report and almost half of consumer spend is in two categories, entertainment and books and reference. Talk about that. I mean, the books and reference kind of blew my mind.

Ted Krantz: Yeah, it really is. So when you take gaming out, you got about $54 billion in play. And as you just referenced, this is half of the rest of the pie there in that category. So this is a very hot category. You see growth all over the place. We talked about short-form video and TikTok’s big post and mind-blowing numbers.

And then you have all the OTT players, right? You’ve got Netflix leading the way. You’ve got Amazon Prime. You’ve got Hulu in the top three positions.

And just this trend overall, John, that’s fascinating is the big silver screen is just disappearing, let alone the big plasma at home and your surround sound system, right? Everybody, especially Gen Z, is spending time on the mobile device consuming content.

John Koetsier: Mm-hmm. Mm-hmm. So we’ll dive into OTT because that’s a fascinating category. But I wanna hit up on books, because that shocked me. It surprised me. You saw the fastest growth of any category there … 131% growth.

Ted Krantz: Yeah. It’s mind-blowing.

Now the one thing that jumps out when you look at the data, too, in Korea and Japan, in particular, the comic book piece is just absolutely huge. That’s 44% year-over-year growth just in the audiobooks category from a global perspective and, you know, doing just incredibly well.

I’m also a consumer myself of a really cool app called Blinkist. If you haven’t used it, I highly recommend it. It’s the reader’s digest and audio on all your books. I’m on the treadmill or on the bike and trying to consume that as well. So there’s just lots of cool new apps to consume content.

John Koetsier: The shocker stat there was that there was two times as much time spent in comic books as there was in audiobooks. And that’s surprising because, like audiobooks, my wife listens to them, Audible, right? And she’s like, literally, “Oh, this is a 20-hour book.” “Oh, this is a 10-hour book.” “Oh this is a 50…” [laughs] There’s a lot of time, right?

Ted Krantz: Right. Exactly.

John Koetsier: And two times as much in comic books that’s… it’s kind of mind-blowing.

Ted Krantz: It is. And you also got to remember just how global mobile is, right? In Japan and Korea, in particular, on the comic book side are the predominant force of nature pushing those numbers, but that will continue to expand.

John Koetsier: Mm-hmm. Excellent. Okay, let’s hit the big one. OTT is the biggest single subcategory that you hit … 17% of consumer spend. You mentioned some of the top names off of the top there, and there’s, of course, Disney+ growing fast there as well.

Ted Krantz: Number four.

John Koetsier: It’s kind of an epic battle there.

Ted Krantz: It is indeed. Yeah, like I said, the landscape there is full of winners. I mentioned the top three, you mentioned Disney+ is in the four position. You got a whole host of other chasers there that are our big-time players.

So you can see the fragmentation that’s going on on the consumer side. And there really is kind of a mass race for all of these individual subscriptions to get full coverage of all the content you used to have.

So it’s interesting as we watch what’s happening, the consolidated and kind of aggregated view of content doesn’t really exist anymore. You’ve got to sign up for these individual subscriptions to get the coverage you want.

John Koetsier: And I wonder, I may have been totally off base two years ago, three years ago, as OTT was really starting to take off. And I was going like, how many subscriptions are people gonna have?

Ted Krantz: Me, too.

John Koetsier: People aren’t going to have five subscriptions. Here I sit, I think I have six … you know? [laughter]

Ted Krantz: I sort of control myself… I’m four, and I hold back. There’s content I’d like to have, but at some point it’s just like, that’s gotta be enough.

John Koetsier: Well, and there’s more content than time. So…

Ted Krantz: Yes, exactly.

John Koetsier: That is a problem, which is kind of a good segue because there’s this epic battle going on, which your report illustrates, between short videos and OTT, connected TV, smart TV, the Netflixes, and the HBOs, and all that stuff. They’re almost equal in downloads in terms of app downloads.

OTT has three times the consumer spend, $6 billion to $2 billion. But the cost structure has got to be hugely different there because you’ve got to build all your own content if you’re Netflix, and you don’t if you’re TikTok.

How do you see that battle shaping up?

Ted Krantz: Yeah. It’s really interesting, John, because they’re kind of chasing obviously, right, the same eyeballs there’s only so much time … but they’re coming at it from different angles, right?

You’ve got just this massive loyal user base with TikTok, expanding now into SoundOn and trying to compete directly with Pandora and Spotify and all the music subscription players that are pretty well established.

And then you’ve got the squeeze moving into OTT. What’s interesting, Gen Z, right, they’re still spending about three times as much in the short-form video than they are in OTT. That’s a really interesting trend and can TikTok move into other categories with that very loyal base and then starting to try to increase the monetization more in line with the bigger subscription plays that are on OTT.

And then vice versa, OTT trying to figure out how you keep everybody loyal when you have all these, you know, disparate options to subscribe to. So it’s going to be a really interesting situation to see how that shapes up.

Last point though, to make it even more complicated, there’s a third player here, and that is the base that we’re not talking about today, which is gaming, which is still the biggest category. And they’re moving into media and entertainment. So this is like a WWE match.

John Koetsier: [Laughing] They’re tag-teaming new combatants. They’re coming in from the side. The chairs are flying.

Ted Krantz: Yes. Coming in from the side, jumping off the rope, all kinds of crazy stuff going on. Yes.

John Koetsier: Well, it’s funny. I think you answered my next question. My next question is, are these competitors, right? Because they’re different categories in a sense, but at some level, as we already talked about, I have a limited amount of time, you’ve got a limited amount of time, and it can’t be spent in both, correct?

Ted Krantz: That’s right. You’re really trying to capture eyeballs and the eyeballs can only be in so many places, right? So there is massive consolidation there.

Plus we’re kind of in chapter two of mobile, and it is consolidation, and land grab, and expand. And you can see the categories starting to drift and merge together.

And you know, as we’ve discussed in other situations too, when we’re talking about gaming, now we’re in media and entertainment but it’s all coming together. Instead of watching the movie with George Clooney, you’re gonna kind of star in the movie. That’s how this is going to play up.

John Koetsier: I wonder how I’m going to relax, because I like to relax and watch George Clooney, but we’ll figure that one out.

Ted Krantz: [Laughing] Yeah, right. That’ll still be available. 

John Koetsier: Exactly. I do want ask you about App IQ. And this is gonna get a little bit wonky maybe for some who are listening, but it’s actually really, really important. So App IQ is your new categorization system for apps. And I know a little bit about this because I’ve done a bunch of reports in mobile myself.

It’s really hard to categorize apps. They’re spread out. They’re different on the major platforms. Apps that somebody puts in one category, you put in a different one. Apps that somebody, the publisher puts in a certain category, you think, “Nah, it doesn’t fit there, it fits here.” It’s really hard.

But if you don’t get it right, you can’t really study them that well. You can’t really know what’s going on and compare apples to apples and oranges and, you know, to oranges. Talk about what you did there and what you built.

Ted Krantz: Yeah, no, I’d be happy to. So we’re really excited about our entire IQ product line. It really started with Game IQ where we worked with some of the industry experts — I’ll throw a plug out there for Joseph Kim who is definitely a thought leader in that space — but basically, what we’re trying to do, anyone that’s living in our data just like you, John, right? You’re trying to get as forensic with the data as you possibly can to look for opportunities that others quite can’t glean from the data, at least at a high level.

So this forensic approach is all about creating a taxonomy, classifying by genre, sub-genre, and trying to split and dissect that data in the most granular fashion as you possibly can.

We did that for Game IQ.

Now with App IQ, what we’re going to be able to do in the first cut of this is for media and entertainment is start expanding it into other vertical applications, leveraging that same taxonomy and methodology that we built that is heavily reliant upon AI, predictive elements of AI, which we’re really excited to lead the market on. And that goes part and parcel with the company name change to

John Koetsier: Really interesting. I wonder… we know sometimes that publishers move categories. You remember Twitter moved years ago from social to news. How much do you take into account where publishers have put their app? And how much do you take into account… well, you know, we think it’s actually part of that category.

Ted Krantz: Yeah. It’s tough to get all that calculus right and you have to come into this with some flexibility that you’re going to move it around a little bit. We even did with Game IQ, we changed the taxonomy structure probably after the first couple of quarters to really zone it in. So you almost need a little bit more real-time feedback from customers, not just the early adopter customers, but broader adoption to really tune it.

So, we have the flexibility to continue to take the feedback and tune it there. It also offers a tremendous opportunity though, John, to provide more flexibility than you get directly through the App Store, more categories, you can aggregate the data differently. And we also see some of the best performers on mobile looking outside their industry for insights, more so than ever now, especially with this larger land grab and you’re trying to swap lanes or grab more lanes to expand your play. So this isolated look into the data isn’t as hardcore as it used to be. There’s a lot more analysis outside the industry.

John Koetsier: Super interesting, and looking forward to more insights from that. Thank you so much for this time.

Ted Krantz: Thank you so much, John. Loved it.

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