Most TV & media businesses miss out on truly building a complete flywheel, others might think they have one- and then there are those, who are so focused on the flywheel idea that they get spinned off the course.
The Flywheel Concept is nothing new to the industry. With the dawn of digitalisation of television the idea emerged to create a perpetual cycle, where one business element feeds into another and allows for continuous innovation and growth. The streaming era more or less is completly build on a Flywheel, if done right and perfectly demonstrated in the case of Netflix, for example.
In essence, for the television industry, the Flywheel concept can be broken down as follows:
1. Content Creation: The TV industry creates content that draws viewers. High-quality, compelling content will attract a larger audience. That’s a no-brainer and the basis of successful TV throughout the years.
2. Audience Growth: As more viewers watch the content, the platform becomes more attractive for advertisers and content creators. A larger audience also provides valuable data on viewing habits, preferences, etc. Here is where the magic starts: in using the data!
3. Monetization: With a larger audience and data insights, the platform can attract more advertisers, leading to increased revenues. Subscription-based models can also benefit from increased viewership. The platform strategy is the linchpin of such monetization.
4. Reinvestment: The revenues earned can be reinvested into creating more high-quality content or improving the platform, thereby attracting even more viewers. See how Netflix constantly pours massive budgets into new, fresh and exciting content.
5. Synergy with Other Platforms: Many TV platforms nowadays also have digital versions or tie-ins with other digital services (like e-commerce or music platforms). This can create a loop where one feeds the other.
Here you must carefully observe new revenue models and bundling opportunities. For example now via retail media.
While the Flywheel Concept is working well for many companies, it is not easy to implement – and it might not be the right fit for every business. Sometimes you better just focus on one segment of the wheel. Others lack the patience and orientation in executing the concept; because it takes often multiple spins before you really fly.
You need to understand how the Flywheel Concept can be applied to your business? Contact us for an intro call to explore this.
