When Netflix (NASDAQ:NFLX) released Black Mirror: Bandersnatch late last year, it was easy to dismiss the film as a gimmick. Bandersnatch's "choose-your-own-adventure" style of interactive film was like nothing else on video streaming services. It made a splash -- and got an additional branding boost by being a part of Netflix's established and popular Black Mirror series. Still, while it looked like a hit, Netflix has declared a lot of things hits, sometimes with questionable viewership numbers. Bandersnatch was not necessarily supposed to be a sign of things to come.
But that's not to say there was no potential. A few months ago, I described the ways in which replay value and Netflix viewers' binge-watching (or would it be "binge-playing" in this case?) habits could combine to make movies-as-games a very cost-effective way for Netflix to eat up its users' viewing hours. That could make such content a good fit for Netflix's subscription model.
With that in mind, it seemed possible that interactive content would be a big deal after all -- at least if Netflix and others saw the same potential I did. Now it seems that they have.
YouTube, Netflix, and more choice-based content to choose from
Alphabet (NASDAQ:GOOG) (NASDAQ:GOOGL) has recently announced that it will bring a choose-your-own-adventure game to its YouTube platform. Netflix, for its part, is quietly continuing down the same path: Though none have been as big as Bandersnatch, Netflix has made other game-like videos. You vs. Wild, which features Bear Grylls (of Man vs. Wild fame -- get it?), is out now. So are several game-like flicks aimed at a younger audience.
The fact that Netflix is targeting younger audiences (with titles like Stretch Armstrong: The Breakout and Minecraft: Story Mode) is particularly telling. Netflix's current selection of "interactive content" -- that's what it calls this genre since being sued by the Choose Your Own Adventure book series -- includes four titles aimed at kids and just two (Bandersnatch and You vs. Wild) aimed at adults.
We don't yet know much about YouTube's plans: Its interactive content could be for kids or for adults. But given YouTube's popularity with the young ones -- 81% of adults with children under 11 say they let their kids watch YouTube, and 34% say their kids watch YouTube regularly, according to the Pew Research Center -- kid-friendly titles seem likely. If children are our future, then interactive videos might be, too.
Will interactive videos work well for YouTube?
Interactive titles make a ton of sense for Netflix, which makes money from subscription fees and has expenses in the form of content costs. Netflix has an incentive to get users watching its originals instead of content it licenses from other studios. The more hours Netflix users spend watching originals, the less Netflix needs to spend on other content (and the more negotiating power it has when it does move to cut those sorts of deals).
That's why Netflix's original-content strategy makes sense. It's also why interactive content makes even more sense: With their replay value, interactive movies and series can generate binge-watching sessions with single movies and episodes. Just ask the folks who worked out every possible branch in Bandersnatch's decision tree.
YouTube's incentive here is a little less obvious. YouTube allows creators to monetize their content with ads, but it doesn't have content costs in the same way that Netflix does. YouTube also has a different relationship with subscription fees -- it doesn't require them, but users can pay to subscribe to ad-free YouTube Premium. (YouTube TV, another subscription service, shares the YouTube brand but is not really related to this discussion -- it's a live TV multichannel streaming service, not a subscription video-on-demand service like Netflix).
YouTube could make its interactive content exclusive to YouTube Premium, following Netflix's business model. Whether or not YouTube does so, however, remains to be seen.
Get ready for streaming companies to choose choice
YouTube's need for interactive content is less obvious than that of Netflix, but the companies are both part of a trend that seems destined to keep growing. And as more companies enter the streaming video and streaming games markets, the blurry lines between simple games and binge-worthy TV may start to disappear entirely. The bottom line is this: When done right, interactive content attracts an audience and offers lots of content hours through its replay value. That makes it an extremely valuable tool for streaming video services.