The result is a dynamic market and that picture is almost the same all over the world.
At the time of writing this column I should have been on the train from Zermatt to Geneva to catch a plane to Amsterdam. Up and down to address the International Top Media Convention, which 3Rivers has been organizing together with Broadcast Magazine for years.
We would be talking about the great time we have in the audiovisual media. The dynamics have never been greater: the impetus that direct-to-consumer activities give to our industry is unparalleled. After all, at least $ 20 billion extra is spent worldwide on content production, especially scripted programming. Market leader Netflix and a long list of other SVOD operators are investing large sums in brand new productions of a high level. Broadcasters are also showing signs of defending their position by investing more in local programming. Where in the past roughly 1/3 of the program budget was spent on international series, much more is now invested in local programming. Not only local drama, but also entertainment and factual shows are in great demand. The result is a dynamic market and that picture is almost the same all over the world.
At the IMTC we would talk about this fantastic development. Netflix manager Lina Brouneus would talk about the development that Netflix is going through. Where does the company come from in its content strategy and, above all, where is it going in the coming years. Markus Schaeffer, CEO of All3 Media in Germany and Christophe Thoral, CEO of Lagardère, would be present to share their vision on the Dutch TV production market. After all, their companies own IDTV and Skyhigh TV respectively and have invested years ago in the Netherlands. At the same time, they would also discuss specific developments in their own countries: the steps that the French government is taking to force international players to invest maximally in the French market (yes, the exception Francaise from the film world is also entering TV production. ) and the fundamental change in the German scripted market, which was always so conventionally and purely aimed at Germany and now also reaches an international audience with productions like Dark and Deutschland 1983.
The highlight of the evening would be Marco Bassetti, who will lead the largest TV production company in the world this year. After all, Banijay (crammed with ex-Endemol managers) will take over Endemol Shine if the European Commission approves. This creates the largest TV production company in the world with a turnover of almost 3 billion euros. Discussion leader Rick Nieman would interview him extensively about how he will implement the integration of these companies.
Would. Because we all know it by now, Corona is ending the event. The studio in the Hallen will remain empty tonight. Just like so many other studios will be vacant in the coming months. Emptiness reigns: all developments that we would discuss tonight are on hold. 2020 seems to be a written off year for all TV production companies, the tide can turn that quickly.
Do you remember that video from 2006 featuring YouTube founders Chad Hurley and Steve Chen? The two young men addressed the 'YouTube Community' with promises of continued innovation and product development. But after just two and a half minutes, they could no longer keep a straight face. They had just sold their barely 18-month-old, loss-making company to Google for a staggering 1.65 billion dollars.
At the time, many thought Google had lost its mind for paying such an astronomical amount for a fledgling startup. But it quickly became clear that the tech giant had placed a calculated bet. The modest YouTube maintained its position as the market leader in online video, while Google's own platform never gained traction. The team at Google had already recognized that video would become the next killer application on the Internet. Instead of competing, they acquired the persistent rival that was standing in their way, regardless of the cost. The rest is history. According to social media expert Jonatan de Boer, YouTube now generates over 36 billion dollars in annual revenue.
Today, YouTube is unquestionably the largest video platform in the world. Monthly views are measured in the trillions, and the number of active channels approaches 5 million. What stands out is that, according to a recent report by Evan Shapiro, nearly 95 percent of all views come from just the top 10 channels. What began as a platform for short-form, user-generated content is now evolving into a wide-reaching video ecosystem. And increasingly, major media companies are embracing it.
Just a decade ago, traditional broadcasters were extremely hesitant to publish content on YouTube. The Dutch public broadcaster NPO offers a striking example. Acting under the leadership of then-chairman Henk Hagoort, the organization tightly controlled content distribution and explicitly forbade its affiliated broadcasters from using YouTube.
The situation today could not be more different. YouTube is now seen as an ideal platform to promote television programs. An additional reason has emerged as well. YouTube attracts a predominantly younger audience, which gives media companies a valuable opportunity to connect with a harder-to-reach demographic.
Channel 4 in the United Kingdom was among the first broadcasters to recognize the platform’s potential. After a test phase, they decided last year to start publishing long-form content on YouTube. They were also allowed to manage advertising on their Channel 4 YouTube page themselves, with a share of the revenue naturally going to Google.
This created a win-win situation. The broadcaster gained additional reach. YouTube gained more compelling content for its viewers. And both parties benefited from the resulting revenue. YouTube is now often watched on television screens, competes directly with Netflix, and even commands more viewing time in the United States, with 12 percent compared to Netflix’s 7.5 percent. ITV has already followed with a similar deal, and it seems inevitable that others will join. All of this continues to strengthen YouTube's already dominant position: in just 20 years, the once awkward underdog has grown into a mighty media giant.
Broadcast Magazine celebrates its 35th anniversary, a milestone prominently featured in this edition of the media trade magazine. It has evolved into a genuine glossy, allowing it to stand toe-to-toe with international counterparts. Indeed, media trade magazines thrive abroad as well. Each has its own distinct identity, as the trade journals that appear internationally are remarkably diverse. For anyone following global developments in the media industry, they are all well worth reading.
The mother of all media trade magazines is the American Variety. Its first edition was published as early as 1905. In 1930, Variety faced competition from a newcomer, the Hollywood Reporter. These publications remain indispensable resources for anyone wishing to closely follow developments in the American media industry. Interestingly, ownership of these magazines frequently changed hands, suggesting they were seen as valuable, easily tradable assets. Even private equity firms have invested in them at various stages.
In 1973, the UK saw the launch of its first media trade magazine, simply named Broadcast. This monthly publication closely follows developments in the British market and has successfully expanded into a digital platform. Since 2003, the UK's audiovisual content industry has experienced rapid growth, which Broadcast has thoroughly documented
This year, the publisher took a bold step by deciding to expand internationally. Broadcast International focuses primarily on developments in the world of audiovisual content production, quickly establishing itself as a noteworthy source of insider news.
For those interested in the French market, Écran Total is indispensable. It is also a monthly magazine, covering the film and entertainment sectors broadly. True to French tradition, it devotes significant attention to the ‘Exception Française’, the protection of the French film industry. In a way, it represents the ugly duckling among the international trade journals, as the French television world remains relatively closed off, and Écran Total reflects that philosophy.
Then there are the Germans: they truly have their act together. DWDL is an in-depth online platform, filled with excellent articles produced by a team of journalists specializing in the media sector. For those who want to understand how things work in the large German media market, it is an indispensable source, offering daily, detailed articles. Last year, DWDL garnered widespread attention with minute-by-minute reporting of the ProSieben Sat.1 Annual General Meeting, in which our Dutch colleague Bert Habets played a leading role. A clear example of how a media trade magazine can evolve into a highly relevant online platform for our industry.
Remarkably, smaller European countries lack a medium comparable to BM. Broadcast Magazine — now smartly rebranded as BM, since it long ago outgrew its original focus solely on broadcasting — is a successful example, thanks to the entrepreneurial drive of Rob Klap and the tireless editorial leadership of Jeroen te Nuijl. It demonstrates yet again the significant role the Netherlands plays in the international audiovisual content industry.
Sports rights holders are rubbing their hands in anticipation, because the value of sports rights is rising sharply. After the huge price hikes of the previous decade, there had been somewhat of a stagnation in recent years. The French Ligue 1 even saw the value of its new multi-year deal drop. But now, a new group of deep-pocketed interested parties has emerged: the streamers are about to make major investments in sports. Specialized sports streamers like DAZN have been active for several years. Market leader Netflix, after broadcasting the Paul/Tyson match, has also discovered the power of live sports. YouTube (more on that in my next column) invested in American football earlier. According to figures from Ampère Analysis, streamers will spend over 12 billion dollars on sports rights this year.
The investments that British-Ukrainian entrepreneur Sir Lech Blavatnik has been making for years are starting to bear some fruit. His company DAZN is growing rapidly and attracting one investor after another. The company is running at a significant loss and has a massive need for financing. This month, according to insiders, the Saudi Arabian Public Investment Fund paid a billion dollars for less than 10% of the company. With the promise that he’s building the Netflix of sports, Blavatnik has managed to convince investors. As a result, the company has become a tough competitor to pay-TV channels like Sky and is squeezing many public and commercial TV broadcasters even further.
Entertainment streamers, meanwhile, also see the value of sports—and not just for attracting new subscribers. Keeping churn (the cancellation of subscriptions) under control is at least as important from a strategic standpoint. Therefore, Netflix is going to invest in American football. Less dominant players like Peacock and Paramount+ are also heading in that direction—a development that has the National Football League (NFL) rubbing its hands in anticipation. We also know that trends in the U.S. sooner or later make their way to Europe, which will undoubtedly mean that here, too, the value of sports rights will shoot through the roof.
It’s clear, however, that this hasn’t been all smooth sailing. DAZN incurred the wrath of German consumer organizations by hiking its prices for the Bundesliga and the Champions League a little too enthusiastically. Technical problems in Italy plagued the sports streamer, and even Netflix underestimated the impact of a mega-event like the Paul/Tyson match. Those are temporary problems, though—ones that will disappear as streaming technology advances and industry expertise continues to evolve.
Private equity firms see these developments as well and are becoming more and more interested in sports organizations. And here again, the NFL is at the center of attention. After an extensive study, the league concluded that private equity firms (at least to a limited extent, for now) can invest in NFL clubs. Sports are increasingly being valued for what they’re truly worth, because there’s still so much potential in them—due in no small part to streamers taking an interest in the rights. In other words: sports are streaming ahead!