The CQ: A Better Business Strategy for the Streaming Wars
Is AppleTV+ onto something timeless with its less-is-more streaming service?
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Buzzing at the Forerunner Office…
AppleTV+ Makes the Case for Scaling Thoughtfully
By Priyanka Suri, Investor
@priyankasuri_
In a world where blitzscaling is idolized, there’s a case to be made that the most effective way to build a new company or offering is to be thoughtful in the way you scale. Don’t just serve up a lot of options, but remain careful and intentional to meet your growing customer base’s desire for the best.
In recent months, AppleTV+ has made a fascinating case for why putting the consumer first can be a powerful way to set your company apart. The streamer’s wins have been well-publicized, breaking onto the scene just 2.5 years ago with a less-is-more content strategy and a string of critically-acclaimed, viral hits like “Ted Lasso,” “Severance,” and Oscar-winning “CODA.” Meanwhile, Netflix’s subscriber woes have also taken center-stage. Despite having the largest subscriber base of any streaming platform, and an endless library of originals, the entertainment giant has started to lose subscribers more rapidly than ever in 2022. Netflix has also had fewer breakout hits this year, which feels natural given the sheer volume of high-quality content we’re seeing from a growing number of streaming services entering the market.
Maybe volume isn’t the surest strategy. In the streaming wars, AppleTV+ has become the service focusing heavily on quality over quantity, keeping its annual budget to a manageable $1-2 billion. Meanwhile, Netflix spends $17 billion annually on its TV and movie lineup, Disney spends $32 billion, and Amazon Prime Video shelled out $1 billion for The Lord of the Rings: Rings of Power alone. The dollars flooding into the production of streaming content are staggering, making AppleTV+’s growing success feel even more impressive.
While high-volume streaming options like Netflix and Disney+ seemingly give consumers the best “bang for their buck,” and might feel like obvious frontrunners in a recession, lower-volume yet high-quality options often stand the test of time—and this approach extends across nearly any category as a timeless business strategy. We at Forerunner are interested in companies that are taking a calculated approach to serving consumers with the best they can offer, opting out of the numbers game and cultivating a more thoughtful product experience to meet customers’ wants head-on.
This Week’s Top 10 Consumer Insights
Consumers are heading back to the office, according to new workplace data from LinkedIn. 52% of workers are full-time in-person, while 29% have stayed remote, and another 17% of employees have a hybrid setup.
After months of a hot housing market, consumers now finally expect a cooldown leading to lower prices. Half of consumers expect it would be tough to get a mortgage right now, the highest percentage since 2014.
Although two-day shipping is synonymous with the Amazon Prime experience, many customers are complaining that they aren’t receiving packages in just two days anymore. This includes places like Spokane, WA, in which Amazon has recently opened fulfillment centers.
Psychologists say that two to five hours per day of free time is ideal for promoting happiness.
Overworked and underpaid, teachers are quitting their jobs at a higher rate than ever—around 41% more teachers left their jobs in June of this year compared to the year prior.
Newell Brands, maker of Yankee Candle and Sharpie, says that retailers are cutting their orders this year as consumer spend shifts and many stores were plagued with excess inventory following supply chain chaos earlier this year.
Recommerce is growing, and Trove has now worked with Lululemon, REI, and Patagonia to help retailers’ expand their resale presence and capabilities. The service is now in 700+ physical locations in the U.S., and the startup is on track to double its business in 2022.
YouTube is trying to reach a huge, untapped market of schools and colleges with Player for Education, allowing edtech companies to tailor offerings from its huge library of content for students.
The U.S. is now responsible for 38% of the world’s Bitcoin mining—up from 3.5% in 2020—and this is ultimately hurting sustainability progress, according to the government.
As Amazon and Walgreens have snapped up new acquisitions, CVS announced one this week, as well. The drugstore will double down on in-home healthcare with by purchasing Signify Health for $8 billion.
Weekly Wisdom
“Lead with empathy. I think there’s been so much pressure to grow, deliver, execute, and be exceptional, and those are important, because we’re in a competitive environment where only the best will win. But your companies have people in them, and I think the last couple of years, we’ve learned about just how human everyone is. It’s not just a person who works in HR, or a person who works in supply chain; it’s a mother, and a father. The same problems that you have as a leader, they have themselves, but they don’t have the flexibility that you have. So when you think about teams, and expectations, and the way people work together, just remember you have a whole company of humans, and that will lead you to better solutions together.”
—Eurie Kim, Managing Partner at Forerunner, gives her best advice for the next generation of leaders on the NYSE’s Future in Five.
✨ Ask Forerunner ✨
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Forerunner Highlights
Eurie is interviewed alongside top business leaders for The New York Stock Exchange’s “Future in Five” Series.
Kirsten talks to Fortune about expanding the definition of consumer investing.
Nicole is named among the top investors for health and wellness by INSIDER.
Portfolio Highlights
The New York Times features ŌURA’s Gucci collaboration in its international edition.
Fora Travel was named to Condé Nast Traveler’s Bright Ideas in Travel 2022 list.
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