Goodreads, After the Buyout

For those not already familiar with them, Goodreads is an online community for readers to keep track of books they want to read, are reading, or have read. It also allows them to interact with other readers and authors. Authors can also use Goodreads to promote their own personal brand and books while interacting with readers.

To the best of my knowledge, Goodreads was built as an independent entity using venture capital funds (and not a subsidiary or affiliate of Barnes & Noble NYSE:BKS). The entire business may originally have been “built to flip” given its rather thin monetization on a sketchy business model up to its acquisition in March this year by Amazon.com (NASDAQ:AMZN).

I have three Goodreads accounts serving different purposes, including an author's account. It’s handy for keeping track of my books, but its user interface could use a lot of improvement; I hope Amazon will spend the money to do so. I don’t use it for community interaction about books. but a number of acquaintances use it extensively for tracking their reading, interacting with other readers interested in the same books, and for promoting their own works.

[Hereafter follows lengthy business discussion, skip as desired.]

Video On Demand: Film and Television's Blind Spot

[Theater in which you are playing]

Missing the VOD Forest for Movie Trees

Scott Myers at Go Into The Story asked this past week why film studios are not making more movies for the largest demographic groups.

What struck me as odd when looking at the Nielsen data provided in Scott’s post: the remarkable stasis in movie audience over the three-year period, when we know that the video-on-demand (VOD) market has changed dramatically during the same period. Consumption of VOD movie content nearly doubled between 2009-2012. (It had already doubled in the preceding three-year time, according to a Pew Internet and American Life study.)

We’re looking at this form of entertainment called film or movies, based on content delivered initially at an external location in approximately two-hour long chunks. But this product and industry appears to be benchmarking against itself when it has other more challenging competition or an entire market in the form of VOD.

This may be one of the answers in itself as to why the industry pitches to the same market; they either cannot get a bead on VOD due to its newness and volatility, or they are blind to it.

Take a look at this presentation [PDF] by the American Advertising Federation (AAF). The numbers are quite different and are extremely fluid, changing substantially over the last three years. Think Netflix, Amazon Instant Video, Hulu, and YouTube as primary examples; how much have their audiences&rsquo consumption patterns changed?

The movie industry’s favorite demographic is the one most likely to watch VOD. At some point, traditional movies as currently formatted will not sync with their lifestyle.

Why is it that the film industry does not appear to be targeting the audience least likely to shift?

Why is it that the film industry is not encouraging development of products that are inherently more flexible in response to their current target demographic before they screen in a traditional theater?

Or is the film industry relying on its traditional products aimed at young adults to continue to appeal through traditional outlets, in spite of the dramatic shift in digital delivery? This approach leaves a more mature market under-served at both the box office and at home.

In theory, advertisers should be pressing the film industry to do better by women with hybridized VOD-movie products as they are the largest group of VOD consumers in terms of consumption of both entertainment and attached advertising. We can see AAF has the numbers, but we can’t yet see any shift in how financing of films may be changing in response to advertisers’ understanding of the marketplace.

There’s a disparity and tension here not fully articulated. Entertainment industry creatives, whether attached to film or VOD, would do well to position themselves for an earthquake when the tension releases.