The Future of Media

A conversation with: 

Patrick Courtney

SVP Digital
Fuse Media

From Instagram Ecommerce to Great Video Content, Make Something People Want

Learn about new realities and opportunities arising from cord-cutting, consumer expectations for multi-platform video entertainment, and the intersection of digital entertainment and video ecommerce.

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Interview Key Points

  • People pay for good content. Make something people want. Be indispensable.
  • It's expensive and time consuming to make good content and a strong brand
  • Many digital-first brands investing in video programming (e.g. BuzzFeed) have a big web footprint, but that scale won't necessarily translate a multi-platform video success
  • There has never been more capital flowing into entertainment. It's an arms race.
  • Digital streaming services are making an unprecedented number of content bets
  • Many new creators accept higher risk terms from Netflix, Hulu, and Amazon Prime Video for a chance at
  • Video content is undervalued by consumers. Streaming services will have to gradually increase fees to reflect true content costs.
  • Viewer choice paralysis is common with the influx of commoditized video content
  • Entertainment networks and content creators must experiment and push boundaries to stay relevant
  • There are huge revenue opportunities for digital video ecommerce
  • Social networks may offer the best near-term path to link video and ecommerce
  • Instagram ecommerce in-app checkout is just the start
  • Future version with Instagram Stories in-app checkout could drive massive video ecommerce growth

Full Interview Transcript

Patrick Costello
Patrick Courtney
Fuse Media

P. Costello: Hey everyone, this is Patrick with the Naytev team, bringing you the Future of Media Podcast today, and we're speaking with Patrick Courtney, at Fuse Media. Thanks for joining us today, Patrick.

P. Courtney: Thank you for having me, Patrick.

P. Costello: This transcript is gonna be very confusing. It's gonna be two Patricks.

P. Courtney: Yeah. Yeah, you're telling me.

P. Costello: Well, could you kick things off by sharing a little bit about yourself, and your professional experience, and current focus?

P. Courtney: Sure. So, I am currently the SVP of digital strategy and operations for Fuse Media, which is a cable network. We consider ourselves a multi-platform entertainment company, but people most know us as a cable channel. My background is in audience development and digital marketing for most of my career. I got my start in agency world, doing digital outreach for movie studios, getting placements for movie titles on different blogs and sites, back when that was a big deal for discovery. Also, we're doing some of the first user generated video campaigns. We did an interesting user generated campaign for Dave Chappelle's Block Party back in the day, which was fun, so it was the early days of user generated video.

And then I've been in the publishing world. I worked for for a time doing audience development for their video network, when video on sites was growing and becoming more of an emphasis for publishers. Then bounced around a little bit to agencies, doing word of mouth marketing campaigns, or building fan communities before social. We eventually evolved the agency I worked for into a social media agency, as custom fans communities went by the wayside, as social took that share. And then prior to Fuse, I worked for a company called Above Average, which was Lorne Michaels' digital comedy network, running audience development, marketing, and for a period of that, also the content programming. So, Above Average had a YouTube channel, we were making a lot of short form sketch videos and content for audiences, and selling against instantly branded content campaigns, and building audiences on that.

And then I joined Fuse about a couple years ago now, and my responsibility here, my scope is basically everything non-linear [definition from wikipedia: “media that can be interacted with by the consumer, such as by selecting television shows to watch through a video on demand type service, by playing a video game, by clicking through a website, or by interacting through social media”; in contrast, traditional linear tv programming is where you have a “schedule of shows to be selected by the broadcaster and then viewed at a set time”].

We have our cable network business, and then there's everything else that we consider digital here. That runs the gamut from working with the content studio team that's making content for digital platforms, so the production side of that, the distribution of that content, as well as our linear library, in non-linear platforms, or O&Os [owned and operated], apps, AVODs [advertising video on demand] and SVODs [subscription video on demand], international, and then the overall monetization. So, we look at non-linear as a different type of a business, and how do we build our top line revenues for the non-linear side of the business as we continue to manage the decline of cable overall.

P. Costello: Can you share on overview of Fuse's target audience, and whether or not that target audience differs between the linear and non-linear side?

P. Courtney: Fortunately for us, we are a youth-centric network, so we have one of the lowest median ages in TV. Now, relative to digital, it's still an older audience, considering the median age for cable overall is something like 50. Our audience, we dub as multicultural millennials, but it's basically young people interested in fresh, relevant content, related to music culture. So, as music taps into, or becomes more of an influence across a lot of different areas of lifestyle, from food, to fashion and streetwear, to entrepreneurship, we tackle that space. So, we put music on top of an overall lifestyle brand, and appeals to a younger audience, 18-34. They watch content across all screens and devices, and so it's a priority for us to be in those areas. And that's where my group is responsible for trying to reach them as they span pay TV to digital and social environments.

P. Costello: Among all the distribution channels that you're focused on to reach that younger audience, which ones are most valuable, and has that evolved much in the last couple years?

P. Courtney: Yes, it has evolved quite a bit over the last couple of years, and that's in part why I came to Fuse, was to help figure out what that looks like, and how we build on that. What's most valuable is what our audience finds most valuable. We have various areas of our business that are more economically favorable to us, but it's important as a youth-centric entertainment company, multi-platform entertainment company, that we are where our audience is, and where they want to watch content, and when they want to watch that content.

So that's why we consider ourselves a multi-platform entertainment company. Our audience watches a lot of TV. Traditional cable TV, even though there's a lot of conversation about it being in decline, is still a huge platform, and our audience watches a lot of content there, so we're very much invested in delivering a great content experience on linear [TV]. But we also know that they spend a lot of time on mobile devices, and they spend a lot of time streaming, and so we have content strategies and distribution strategies that suit those behaviors, also.

P. Costello: What's that relative balance look like, between mobile versus traditional TV, and obviously you've got second screen behavior complicating matters — maybe they're watching you on TV directly, while also navigating your site at the same time on their phone. What does that look like?

P. Courtney: The idea of the second screen experience is pretty common now; I think most people probably do that to some degree. It's an attention deficit climate, and generation, and I think that is continuing. We program content for not only various screens, whether they're sitting down on their couch and watching television, but also if they're on their commute to work, or going between classes at college. We program content for those environments, too, and it's a very different approach to content. The way you make a TV show is very different than how you make a three minute video for YouTube. Both in terms of what that content should be, what people want to watch with that time, as well as the production of that.

So, we take a different approach to every type of need state our audience has, with regard to how we deliver content.

P. Costello: You briefly mentioned the trend for people to not necessarily watch content on TV like they might have in the past. There’s a lot of buzz around “cord cutting”, and the rise of digital streaming services like Hulu and Netflix. What are the biggest differences in terms of barriers to entry, and revenue potential between licensing content to traditional TV networks, and streaming services?

P. Courtney: I think that people will pay for good content. If they care about the content that they want to watch, they will pay for the content that they want to watch. We look at it from that standpoint — how do we become an indispensable entertainment brand on the various properties that we're on, and then leverage the economics to the best that we can on those platforms? With pay TV, for example, people come to Fuse because we have original programming that they can't find anywhere else. One of our shows, back to the idea of music culture through the lens of, say entrepreneurship, we have a show with T-Pain, who's really having a moment right now, having won The Masked Singer, and is now hosting the iHeart Awards, and just dropped an album.

But we have a show with him, that he basically goes around to various startups that are interesting, and unique, and have passionate founders, and he is very interested in that space, and thinks about how they're building their businesses, and really understanding people's passions and behaviors. And that's exclusively available on our pay TV offering. We have a windowing strategy, so after a certain period of time, then we'll take a look and talk to a Hulu or a Netflix about a second window in an SVOD environment, where we can continue to monetize that content after the life through pay TV.

I think what's different really, as far as those economics, is the currency that it trades on. Traditional TV trades on ratings. It's pretty endemic to the cable business, and the streamers tend to trade more on performance, or projected performance, or I should say they take more of an interest in how that show will do for them, based on the data they have, and then they take a look at what they might be willing to spend on that. They have a fairly analytical approach, at least from our experience, as far as what they choose, how much they pay for that, what that looks like.

But you know, for us, there's still a significant amount of money in TV. It's a huge business. Even as people do the cord shaving thing, a lot of them are moving to skinny bundles, or to digital IPTVs [Internet Protocol Television] or DMVPD [Digital Multichannel Video Programming Distributors] type things [e.g. Sling TV, Fubo TV, YouTube TV] . There's still a ton of opportunity there, and we're happy to be in that business.

P. Costello: Do you think traditional networks will start using more of the metrics that streaming platforms rely on to make show investments?

P. Courtney: Yeah, I think so. There's always that argument with content that you need to balance art and science. I think that how you strike that balance depends on the platform, and how much power that platform gives to an algorithm — how much it trusts the system to recommend that content, and how much is dependent on things like metadata, and search cluster information, and things like that. We tend to take a data-informed position, versus being data-driven, so it helps support the process. It guides it in the right direction. But creatively, you still need to take bets. You need to take risks in order to stay relevant, and that's true whether you're a programmer like Fuse, or you're a platform like Netflix.

P. Costello: That ties in perfectly with my next question. About a year ago, Fuse launched three divisions to create content that better connects with target audiences, and your executive vice president, Jason Miller, noted that, “Data and analytics are at the core of fueling all this content.” What do you think is the right balance to strike between analytics and experimentation?

P. Courtney: We're a lot more data informed than we used to be.The tools that are available have gotten more sophisticated across all of our content production, whether it's a linear property, a linear series, or a short form video. But we take a look at the subject matter of the content, the talent, and the format. We run a lot of that through our own analysis, to understand is this the right show, with the right talent, done the right way, that would set it up for success?

We're looking at all the trends of what is successful, and then try to develop something  to take advantage of that. We start with the creative first, but a little bit's also platform dependent. With linear, you're looking at ratings, you're looking at driving larger audiences to tune in. Appointment viewing TV, that can be a different creative process than trying to take advantage of the YouTube algorithm and getting a video from zero to 20 million views, or something like that, because it needs to be something in a familiar format, like a challenge video, or reaction video, or something endemic to that platform.

So, we have varied approaches, depending on the content, but overall, we take a creative-first approach, with a data-informed perspective.

P. Costello: On the data side, to what extent are you able to use audience engagement data that you're picking up from YouTube, Facebook, other social channels, or even website interactions. Can you use that information to better inform future content investments?

P. Courtney: I think it definitely does. We see things in the content itself, like how long someone watches for, where they drop off, how many episodes they consume at a time, how they found the content, what were they searching for, their discovery pattern, that all helps us understand why they might be watching our content. That's all really helpful.

And then back to the conversation about windowing strategy, as we put our content into other platforms that are non-linear, we will often see different viewership habits there. We might see that a series outperforms in a streaming environment, where maybe it didn't quite perform as well on linear. We'll take that into consideration as we look at a renewal, to understand whether or not there is an audience for this that we weren't able to tap into during the first window, but we're able to cultivate that and build something for season two.

P. Costello: Moving back to some of the challenges that have come up in terms of moving from non-linear, and linear, and back and forth for folks, you see a lot of media companies, from Vox, to Vice, BuzzFeed and Complex, trying to license shows to streaming services. What are the biggest barriers facing these new entrants?

P. Courtney: You'd have to ask Vox, Vice and BuzzFeed to get that answer. I'd say you have to have to have something of value, and that sounds fairly simple, but that's not easy. Create something that people want. That can be expensive; making good content is not cheap. It can be time consuming, building an audience around IP [intellectual property] that you're developing can take a lot of time, and it's not guaranteed. You're not for sure  going to be successful.

And then on the other side of it, performance is not universal. What works on one platform might not work on another. If you have a successful YouTube series, that doesn't mean it's going to be a hit on linear. It doesn't mean that it's gonna be a hit in SVOD. Creating value, and then maximizing that value across platforms is challenging.

Editor’s note:

Here are a few data points on new entrants — Vox's 'Explained' on Netflix was renewed for a 2nd season, BuzzFeed's 'Follow This' on Netflix was cancelled after season 1, VICE's HBO series is renewed through at least season 7; Complex just licensed 16 shows to Netflix and Hulu.

Many new entrants are betting that their content will stand out, fronting the costs of production for new shows that may appear on Netflix, Hulu, and Amazon Prime Video. The creators may only receive a fixed fee for every hour that a show is watched, similar to how Spotify pays artists a fee for each stream of their song (Spotify reportedly pays $0.00397 per play). For example, Amazon's terms note, "For Titles made available for Prime Subscription Access, Amazon will pay you according to the below rate card on a per title basis (for standalone titles and seasons), based on aggregate Hours Viewed by customers worldwide" — below are Amazon's listed rates.

As a short thought exercise, let's pretend you made a show that commanded about 3 million viewers per 1 hour episode (similar to Jimmy Fallon's The Tonight Show), and that you maintained this throughout your your full first season (pretend it's 12 episodes). You'd earn about $2.2 million (excluding potential ad revenue) for your first season at Amazon's rates listed below. Sounds great, but it may not be enough to cover production costs which aren't cheap...potentially hundreds of thousands of dollars per episode. This investment could entirely be worth if your show has a good chance of being widely viewed and renewed with a multi-year license at higher rates.

Source: Amazon Prime Video Subscription Access License Fee

P. Costello: Do you think that these new entrants might have any extra edge to outperform standard show success rates, given that they reach so many people with their websites and social media?

P. Courtney: Brand doesn't necessarily translate across platforms. It's not important, necessarily, to have a large audience, but you need to have an engaged audience that you're able to mobilize. They need to recognize you and trust that you're going to deliver a great content experience anywhere you engage with them. I think some of the digital media companies have enormous scale, but they don't necessarily have the ability to take that scale and move it across screens and devices. There's a lot of brand value that has to be built, that can be sometimes challenging to do, especially if it's in a space where they don’t have lot of history or experience.

So, you have to think about that, and then you have to think about where the audience that you do have, where they are spending their time, then figure out a way to offer value there. If your audience is on TV, if they're on Netflix, if they're on Pluto, if they're on YouTube—  where does your audience go, and for what reasons? Understanding that very intimately, and then having a strong enough brand that you can enter into those spaces, and deliver that audience, I think is what's important.

P. Costello: Having that engaged audience makes a lot of sense, and relates to my next question around the massive volume of new content that seems to be available now through streaming services. They have a lot of great content, but they also have an enormous volume of what seems to be low quality content, and a while back there was a really apt description on the Reddit forum, r/showerthoughts, that stated,

“Netflix is like a refrigerator full of food, with nothing I want to eat.”

What do you think that the drivers are behind this phenomenon, and does it relate at all to the way in which streaming services are licensing or paying for content?

P. Courtney: I think that sounds more like choice paralysis than necessarily low quality content. Everybody has that problem, and it's often because you don't know how to decide. I think choice paralysis is a real thing. I think there's a couple things going on. You've got more capital flowing into content creation than there's ever been; there's just a lot of content being made. People call that the content arms race, because they're all trying to create their own original library offering, to be able to continue to drive pricing power and get people to stay subscribed to their services.

And then there's more sophisticated methods of search and discovery, so these platforms, like a Netflix is like notoriously focused on how people discover content on their platform, how the algorithm works to drive related content. There's a lot of discussion about how they do that with very strange search clusters, or subject matter pairings and how people's interests translate across different areas of content. I think this provides an environment for you to be able to take more bets, and then the algorithm filters out what people want to watch, what people consider to be good, or not good, and present that to you.

And when you're that well capitalized, there's a lot of bets that don't pay off, and that's not necessarily a concern, as long as some of them do, and I think that's maybe what people might be referring to when they say that there's a lot of "junk" on the platform. It's just that there's just a lot of content, and some of that content has very specific audiences, with niche interests, and there's just a lot of content being populated on those platforms. I get the analogy about the refrigerator full of food, but I don't necessarily think that's a bad thing.

P. Costello: As a follow on to that top reddit comment, the second top comment was,

“Netflix is a refrigerator full of so many foods I've never tried, but I let them rot, and eat leftover pizza I've had a million times before instead.”

Even if you have more capital for experimentation, and can go after very targeted audiences, does it even make sense to experiment much? Is it a better bet to just stick with tried and true, maybe just a repackaged version of the archetypal hero's journey?

P. Courtney: I think the leftover pizza analogy is like  Friends, or The Office, right? That's what Netflix paid $100 million to stream Friends for a year non-exclusively, because of that. I think there's a little bit of ... and I don't mean this in a negative way, but there's a little bit of a laziness, when it comes to entertainment.People want to be entertained; they don't want to really work. Familiarity is a very strong motivator.I think that's important, but that doesn't drive interest in the long term.

You have to push boundaries, and take risks, and have something fresh and interesting to keep people glued, to keep people subscribed, to keep people watching and tuning in. You need to continue to push boundaries to stay relevant, so you can eventually get to a place where you can make the next Friends or The Office.

P. Costello: Makes sense. So, cater to some aspect of familiarity, power through choice paralysis, and any particular laziness, and always be pushing the boundaries in a balanced way.

P. Courtney: Yes.

P. Costello: Switching gears a bit, which linear and non-linear entertainment trends are you most worried about and most excited about?

P. Courtney: Let's start with what's exciting — to me what is exciting is choice. We feel that Fuse is a strong brand, has a very specific point of view when it comes to music culture, we think the type of entertainment that we provide our audience resonates, we see that with the engagement that we get on that content.The evolution of the entertainment ecosystem is a good thing for brands like Fuse, that stand for something, that are specific, that people care about. That's very exciting, because now people have a lot of choice, and they can get their content in any number of places. If you have strong enough brand, that's advantageous to you.

What scares me a little bit is —there is so much capital going into content at the moment, and businesses like Netflix and Hulu, for example, aren't profitable, andI'm concerned that audiences are spoiled a little bit —they're not paying enough for the amount of content and entertainment that's being delivered to them at the moment. That's why Netflix keeps incrementally ticking up their price, because at a certain point, they need to make a profit... [underpriced SVOD content makes things] difficult for legacy business models that charge an appropriate amount.

History of Netflix Price Increases, source: Recode

You can argue what [price] that content should command, and so you start to almost commoditize content, which isn't a great thing. Now that said, there's an unlimited amount of amazing stuff that's out there, and that's very exciting.There's never any shortage of things to watch or be entertained by. But then you wonder, how do you get consumers to realize that content experience has a cost to it, and right now, they're getting it at a discount, and that will eventually change.. That has to evolve over time, but that's why it puts some pressure on legacy companies and business models.

P. Costello: You have incredible experience on the digital broadcasting side, but I know that you also have some entrepreneurial experience at the company Nearly Newlywed. Could you introduce Nearly Newlywed, and share a little bit about your work there?  

P. Courtney: I helped my wife start a pre-owned wedding dress business about seven years ago or so. We got married, she wanted to wear this $8,000 Vera Wang wedding dress, she didn't want to pay $8,000 for it, for a dress she was gonna wear for a few hours, so she found it pre-owned online.This is a crazy story, but her and her mother flew down to Atlanta to see the dress, because you're talking about potential savings of thousands of dollars. Flying to Atlanta actually isn't that crazy of an idea. But they flew down there to make sure that it was real, and it was authentic, and it fits, and all that stuff, and then she bought it. She bought it for$3,500, something like that.

She wore it for our wedding, she was beautiful, it was amazing, and then she resold it to another bride, and ended up spending, net, about $500 for an $8,000 gown. So, that whole experience helped her get to the conclusion that this would potentially be a good business. So, she started Nearly Newlywed. It's a peer to peer pre-owned wedding dress marketplace. We're now expanding into new products, and accessories, and gifts, and all that stuff. Everything. Basically, it's a place to buy and sell your wedding, and we were very lucky early to be on Shark Tank, so that helped quite a bit with exposure and visibility very early on, and so it's been really fun to watch her business grow, and I moonlight on nights and weekends, when our two and a half year old son, Ryan, is sleeping or taking a nap, on the overall marketing and business strategy side of things.

P. Costello: Are there many lessons that you've learned from that side, that can apply over to your work in digital broadcasting, or vice versa?

P. Courtney: Yeah, I mean I think the fundamentals of digital marketing, and reaching audiences, and delivering, whether it's entertainment, or it's commerce opportunities and calls to action, in those environments, is something that I've spent my entire career doing. There are a lot of parallels between how you get somebody to watch something, and how you get somebody to buy something. They are very different behaviors, but I think one thing that's interesting is there's like a convergence that's happening there a little bit now, where there's this idea of shoppable video. You're seeing a lot of commerce companies invest a lot more in video, enriching their video with metadata that could allow that content to become shoppable.

You look at Amazon, anybody with Amazon Prime, you watch content, and you pause that content, and it pulls up all that metadata from IMDB about who's in the scene. You can imagine where that goes when they start to integrate product information.That is very interesting to me. I think that's pretty cool. I've seen a few startups doing some things in that space to capitalize on that. I think it seems like it's still a little ways away yet, but it seems like it's a natural fit for people.I think the TV is one thing, especially with voice, but also on mobile, when you're watching a piece of content, like you can be interacting with that content in a way that promotes commerce in a certain capacity, and so I think that's great.

And for Nearly Newlywed, we haven't really invested in video to this point yet, partly because we're a pretty small operation, but we talk about that a lot. We talk about how if there were video of this wedding dress — of somebody wearing that wedding dress, and watching how it flows in different environments —  how much more value that would add to the consumer who's considering purchasing that item is really interesting. So, that's kinds of where some of that crosses over and that seems like a pretty exciting space.

P. Costello: Is the onus on TV broadcasters or streaming systems to develop that interconnect between e-commerce and the viewing experience? Or is this something you think new tech providers will need to create?

P. Courtney: I think that's a good question. I think it seems like now, you've got the big tech giants, who will eat up anything that looks promising, so there probably will be some of that that goes on. You'll find innovation in smaller startups and organizations, who are super focused on one thing and have a promising technology, and then it gets bought out by one of those players. For Amazon, it's a no brainer —their entertainment business is almost like a marketing platform for their commerce business.

I think for digital media publishers who are trying to diversify their revenue streams, they're taking a lot of the initiative to try to drive new ways of earning revenue, and commerce is a very natural area for that. Whether that's affiliate marketing, or manufacturing of new products based on the interest that they're seeing, the data that they get from their audiences, that's a really interesting thing that's going on. I think BuzzFeed was just in the news talking a little bit about some of the stuff that they're doing with that, which I think is pretty cool.

BuzzFeed Sells Affiliate Promotion, source: BuzzFeed

BuzzFeed Sells Merchandise through Amazon, source: BuzzFeed, Amazon

With video content, the way that that really ultimately works is with a very rich set of metadata for your content that these platforms can read, and contextualize, and figure out ways to map that to other ways of delivering information or value, whether that's actor information on screen, or product information that's available in that content that you can buy. It's coming from all sides, and everybody's figuring that out together.

I don't think that anybody [any individual player] necessarily drives [the linking of the ecommerce and viewing experience]. There's economic interest in ecommerce from the big platforms, and for the publishers, digital media publishers in general who are getting a little more pressure to show profitability, show revenue growth. It's a natural area for them to explore.

P. Costello: It seems like there needs to be some more walking before running. It's pretty nascent, even for Pinterest or Instagram to even be adding taggable shop links to images, let alone trying to make it work great as a user experience on a full video side. As we've seen with a lot of midstream ads on video, they're not particularly compelling and haven't quite achieved the right user experience. Have you seen any examples in the wild, where you think folks have done shoppable content well? Whether with images or video?

P. Courtney: I think what's happening in Instagram Stories is interesting. Instagram in general, I think is doing some interesting things with shoppable ad units. Nearly Newlywed uses that, so we have our product feed plugged into our Instagram account on Nearly Newlywed, and we tag our products, and that shows information that they can get with a tap, before they decide to make the jump and go buy that product, or to do it within the interface of Instagram. We're not seeing that as a revenue driver for us at the moment, and that's in part because we're selling a wedding dress, so if somebody who's gonna buy a two or three thousand dollar wedding dress in an Instagram feed with one click that individual is either very rich or crazy. But what it does do is it puts them in the mindset of shopping.

Source: Instagram

Like, "Oh, this is interesting," like, "I'm gonna learn a little bit more about this product. I might make the jump and I might learn a little bit more about it." Then later, after I've considered that for a while, come back and buy that product. So, for us, it's like one more level deep than just showing a picture of a dress.We can add a little bit more of that information, that metadata, into it to give a taste of what that is, what that looks like, the price, a couple of details about that product that might spark their interest a little more than just a static image could with a caption.

For us, that's pretty interesting. We're now getting into gifts, and things that are a little more accessible for social impulse, like impulse line checkout  e-commerce behavior. Selling t-shirts, and mugs, and that stuff, you could just tap that and buy that, and we're seeing some of that behavior.

Editor's note:

Shortly after this interview, Instagram announced that users can now buy products in the Instagram app. This new Instagram ecommerce in-app checkout is a game changing simplification for consumers and retailers. The shopping experience will be easier than ever.

Instagram Ecommerce - New Shopping Flow; source: Instagram

In an interview with Recode, Ashley Yuki, the Instagram product executive in charge of shopping, said, “I love shopping, and it sucks on mobile.” Recode notes, "Between jumping from apps like Instagram to a retailer’s website, to entering credit card and shipping info, the number of steps it takes to buy something online is just too cumbersome, she says. 'I think people abandon [shopping] flows now. I know I do. You just kind of give up.'"

This new Instagram ecommerce experience seems inevitable and indispensable to consumers and retailers alike. Retailers may not like the additional customer relationship disintermediation by Instagram, but retailers will likely see significantly higher checkout success rates and higher ROI on Instagram ecommerce marketing.

Instagram in-app checkout could also eat into Amazon shopping for consumers, change how some media companies sell affiliate deals with retailers, and redirect some retailer budget away from Amazon ecommerce marketing over to Instagram ecommerce marketing.

Regardless, Instagram's in-app checkout seems to match Patrick Courtney's advice and Y Combinator's motto, "Make something people want."

Instagram Ecommerce In-App Checkout; Source: Instagram

Above: Demo of Instagram Shopping Checkout, Source: TechCrunch

P. Costello: I really appreciate you diving into the examples that you've seen working well for Nearly Newlywed on Instagram. It certainly sounds really promising, even if it's just starting to ramp up brand awareness, and getting people in the right mindset. What other social channels do you think are doing well with video commerce right? Whether for Nearly Newlywed, or tying in with the efforts that your team at Fuse might be doing?

P. Courtney: With our show, T-Pain’s School Of Business,  we are showcasing interesting products and ventures from entrepreneurs. You can see that that's a fairly good fit. It's not really so much from a technology standpoint, like being able to buy that product necessarily within the video content itself, but surrounding that content with information about where and how to buy that thing, that's something we're working on. We're in production on season two, so we're excited about what we're gonna be able to do with that.

We're starting to think about our YouTube channel, now that YouTube is getting a little bit more in that space. They've got merchandising shelves on channels that you can access, and so we're thinking about how we can do that, because we often have artists who come through our office and shoot repeatable type formats. We have a show where artists do ASMR autonomous sensory meridian response — gives you the tingles like when you listen to somebody  whisper, or crinkle a piece of paper.

So we have artists do that, so we'll have like Wiz Khalifa do that. They often have their own lines of products, or whatever it is that they're trying to promote, or an album, or something like that, so we're looking at ways that we can start to maybe offer some opportunities for commerce within those experiences.

We're giving it a lot of thought, but as you said before, a lot of this is still nascent. It's hard to really go all in on something. You have to just explore it and take a little few bucks here and there, dip your toe into the water a little bit, so we'll see where things go this year. But there's some exciting things that we're working on.

P. Costello: I'm really excited to see all that come out.

P. Courtney: Cool.

P. Costello: Patrick, thank you so much for your time today. I really appreciate it.

P. Courtney: Thank you, Patrick. This was fun.

Patrick Courtney

Patrick currently serves as SVP of Digital for Fuse Media, a multi-platform entertainment company whose multicultural, youth-centric programming is distributed across linear, OTT, and mobile platforms reaching millions of viewers each month.  There, he leads the organization’s non-linear strategy, spanning product, operations, distribution, audience growth, and business development.  His group is responsible for the exponential year over year non-linear viewership growth of Fuse long and short form originals across syndication, SVOD, AVOD, and social video.

Prior to Fuse, Patrick was SVP of Programming & Marketing Strategy for Above Average, the digital comedy network from Lorne Michaels’ Broadway Video, where he led consumer-facing marketing activations and audience development.

Patrick moonlights as a bridal ecommerce marketer, supporting his wife who founded Nearly Newlywed, a Shark Tank-featured online marketplace connecting brides around the world to help them buy and sell their wedding dress, jewelry, and accessories.