The DTC model was a game-changer for retail. But the category’s three letter moniker won’t be remembered for the brands that came from that forgone era. Data suggests that it will be remembered as a media or advertising strategy. There is a precedent for this.
Muzak, often synonymous with elevator music since 1934, represents an early pioneer in streaming, tracing back over a century before the term became entwined with the likes of Netflix and Spotify. Muzak laid the groundwork for the digital streaming that defines today’s entertainment landscape. This evolution illuminates how marketing terms can transcend their original contexts, shifting and adapting across industries and eras. Similarly, the concept of DTC is expanding beyond retail, promising to reshape industries with a legacy that echoes Muzak’s pioneering role in modernity.
Google, Wikipedia, and other sites still suggest that the phrase “direct-to-consumer” and its shorter-form catchphrase are referring to a “business model focusing on e-commerce of a single product category” or a sales channel where the original equipment manufacturer sells directly to the consumer (instead of using traditional wholesale channels).
The DTC era marked a pivotal moment in the way businesses connect with their audiences. This evolution, initially sparked by pioneering platforms like Shopify and BigCommerce in 2007 and 2009 respectively, now sees the moniker pivoting from the exclusive domain of retail and towards other industries adopting the acronym. Today, the media and advertising sectors are the ones stealing the search traffic for DTC news.
The journey of the three letter acronym, from one meaning a nascent brand retail strategy to one meaning a broad-based approach impacting retail, advertising, and media reflects a deeper change in consumer behavior. In eCommerce, DTC is less of a category and more of a function. In media, DTC is entering the cycle that harkens back to the 2009-2014 years of online retail. Here is what I earlier published on this seemingly forgone era:
The Direct-to-Consumer Brand era brought about a significant change in retail dynamics. Brands like Figs and Warby Parker exemplified this era by cutting out intermediaries and connecting directly with consumers. This model, highlighted by the rise of Shopify, allowed for greater control over brand messaging, customer experience, and product quality. The DTC era highlighted the importance of eCommerce, digital marketing, and consumer data analytics, making it a pivotal period in the evolution of modern retail. But few retailers mastered the economics required to become a durable brand.
The pandemic further exposed the vulnerabilities of the DTC model. Many DTC brands, with high operational costs and low savings, struggled with diminished consumer demand and supply chain disruptions. This led to significant downsizing of companies such as Away, Everlane, Casper, and others. Post-pandemic, we’re witnessing a shift in the DTC landscape. Entrepreneurs and investors are reevaluating the model, seeking a balance between the aspects that worked and those that didn’t. The focus is now on sustainable growth, effective customer engagement, and prudent financial management.
Fueled by Facebook and Google advertising spend, that DTC era democratized the market for small and medium-sized brands. Shopify’s platform, among others, played a crucial role in this revolution, allowing brands to sell directly to their consumers and bypass traditional middlemen that were known to block entry, at the time. This model thrived on the back of digital advancements and a growing consumer preference for personalized, direct brand interactions. It is in decline.
But prior to the decline, the periodic spikes in Google Trends for “d2c” are testament to this model’s growing resonance with the public, highlighting key moments of technological adoption and consumer shifts towards more personalized shopping experiences.
The recent strategic move by ESPN to launch a direct-to-consumer version by fall 2025 underscores the shift away from DTC’s hold on physical product brands, moving beyond retail to capture media and advertising realms. This approach, aimed at reaching an audience increasingly disenchanted with traditional cable bundles, represents a broader industry shift towards offering content and products directly to consumers. The collaboration among giants like ESPN, Warner Bros. Discovery, and Fox Corp. to bundle sports content into a new streaming service exemplifies their need to meet the modern consumer’s demand for direct, personalized content consumption. Ironically, it’s a demand that retail brands helped normalize for media companies.
This list spans traditional media companies branching into DTC services, as well as digital-first entities that have pioneered the DTC approach in media.
Disney+ (The Walt Disney Company): Launched in November 2019, Disney+ represents a major move by a traditional media conglomerate into the DTC space, offering a vast library of Disney, Pixar, Marvel, Star Wars, and National Geographic content directly to consumers.
ESPN+: As part of The Walt Disney Company, ESPN+ is a sports streaming service offering a variety of live sports, original programming, and documentaries directly to sports fans.
HBO Max (WarnerMedia): Launched in May 2020, HBO Max combines HBO’s premium content with a wider range of movies and TV shows from WarnerMedia’s portfolio, targeting consumers directly with a comprehensive streaming service.
Peacock (NBCUniversal): NBCUniversal’s Peacock, launched in July 2020, offers a mix of original programming, films, and classic TV shows directly to consumers, with a tiered service that includes free, ad-supported, and premium options.
Paramount+ (Paramount Global): Paramount+, rebranded from CBS All Access in March 2021, delivers live sports, breaking news, a vast on-demand library, and original series directly to audiences.
Apple TV+: Apple’s entry into the DTC media market in November 2019, offering a slate of original content, including series, movies, and documentaries.
Netflix: Although now synonymous with streaming, Netflix’s pivot from DVD rental to streaming in the mid-2000s marked it as a pioneering DTC media service, setting the stage for the streaming wars.
Amazon Prime Video: Part of Amazon’s Prime subscription, Prime Video offers a wide array of original and licensed content directly to consumers, illustrating the expansion of DTC strategies beyond traditional media companies.
Spotify: While primarily a music streaming service, Spotify’s foray into podcasts and exclusive audio content positions it as a DTC media company, directly connecting creators with listeners.
YouTube Premium (Google): Google’s YouTube Premium service offers an ad-free experience, offline playback, and exclusive original content, showcasing a digital platform’s evolution into a DTC media provider.
These examples illustrate the various approaches to DTC in the media industry, from traditional broadcasters and film studios transitioning to streaming, to tech companies and digital platforms innovating within the space. Each has navigated the shift to DTC with unique strategies, reflecting broader trends in consumer behavior, technology, and the media landscape.
While media is headed away from omnichannel and towards DTC, the retail sector has increased its focus on omnichannel strategies, as highlighted in recent analyses. The convergence of physical and online selling, accelerated by the pandemic, has led to significant investments in technology that enhance the customer experience across all touchpoints. Innovations such as augmented reality fitting rooms and interactive in-store displays are not merely enhancements but fundamental shifts in retail strategy, blurring the lines between eCommerce and physical stores.
Yet, this shift towards a more integrated approach to product retail comes with its set of challenges and criticisms. Concerns over scalability, sustainability, and consumer privacy are increasingly prominent. The model’s reliance on continuous consumer engagement and data collection for personalized experiences raises ethical questions. Moreover, for smaller brands, maintaining growth without compromising on quality or customer experience presents a significant challenge.
For product retail: sustainability, transparency, and the protection of consumer privacy are set to become central to consumer choices and, consequently, brand strategies. For media companies venturing into DTC, the creation of value will extend beyond content to encompass interactive and personalized experiences, crucial for attracting and retaining a modern audience. The trajectory of DTC media strategies will likely be defined by a delicate balance between leveraging technological innovations and addressing cost considerations.
The evolution of the DTC model reflects a broader narrative of change, from its early days in retail to its current embrace by media and advertising sectors. This shift is indicative of deeper societal changes and technological advancements. As the landscape continues to evolve, the adaptability and appeal of the DTC model remain clear, promising new opportunities and challenges for businesses aiming to connect directly with their consumers. The future of DTC lies in its ability to innovate while remaining mindful of value creation and proper unit economics, ensuring a sustainable and consumer-centric approach to business.
By Web Smith | Edited by Hilary Milnes with art by Christina Williams