That’s how swiftly things can change.
2023 was again a tumultuous year in both domestic and international audiovisual markets. A lot happened, yet much remained the same. In January, I attempted to predict the major developments. Now, eleven months later, it's time to review and assess: where were my predictions wrong, and where did they hit the mark?
A bold prediction was that streaming would surpass linear television in terms of market share within this year. It's undeniable that the trend has continued, especially due to the significant growth of AVOD. However, the magical 50% threshold has yet to be reached, not least because public and commercial broadcasters (including the constantly-evolving pay-tv operators) fiercely defend their position in the battle for viewers. A prime example is ESPN retaining the Dutch Eredivisie rights. The transition from linear to streaming is thus slower than I anticipated.
I also foresaw a correction in the production market, expecting streamers to limit their content investments and broadcasters to intervene in their budgets due to the declining advertising market. However, I underestimated the impact: my projection was a 10% correction, but investments decreased much more rapidly over the past eighteen months. As a result, many freelancers in major European countries suddenly find themselves without work, whereas just over a year ago, the market was completely overheated. That’s how swiftly things can change.
Most of the other predictions were reasonably accurate. The projection that AVOD would take off has been proven to be true. Netflix regained its subscriber growth trajectory by fully embracing AVOD. Clearly, the measures taken to limit the illegal sharing of subscriptions played a role, but the availability of a cheaper subscription proved to be decisive. Disney also shifted towards AVOD and achieved success in doing so. Local streaming providers are moving into this same direction, resulting in a sensible mix of SVOD and AVOD. This will accelerate the development of streaming, potentially marking 2024 as the moment streaming surpasses linear TV in terms of market share.
Another prediction was that broadcasters within the streaming domain would concentrate more on their own brands, leading to the demise of joint national platforms. In the UK, ITV launched the new platform ITVX, and competing organizations also increasingly focused on their own brands. Britbox is becoming more of an American platform for British television but hardly plays a significant role in the UK anymore. The impact was even more pronounced in France, with the joint platform Salto being shut down. If NLZIET hadn't clearly positioned itself as a 'cable disruptor' in the Netherlands, it would likely have faced a similar fate.
I also predicted that the consolidation of media companies would be halted. Indeed, major deals didn't occur, and mergers between broadcasters (TF1 and M6 in France and RTL and Talpa in the Netherlands) were prevented by the regulating authorities. These regulators shouldn’t take much pride in this: the reasoning used by the ACM in the Netherlands could also have been written down within six weeks. This made 2023 a media year for many to nót take pride in.
Change in the media sector occurs at the speed of light. Just over ten years ago, Netflix was a relatively unknown phenomenon and began its first major original production, House of Cards. This month, Dutch Telecom Paper came with remarkable news: in the Netherlands, streaming has surpassed broadcast in terms of viewing time. It's not different in other countries in Northwestern Europe, not to mention the USA. A true paradigm shift!
It is clear that broadcasters, both public and commercial, need to change fundamentally. A paradigm shift, like the one mentioned above, requires profound changes in business operations. After all, these organizations all face the task of changing from traditional broadcasters into digital media organizations. Top-notch change management is required, and the question is whether they have the courage to take major steps. Some broadcasters believe they can keep their heads above water with a few minor adjustments. Often, they talk about transformation, but in reality, there is little of it. Simply tweaking things isn't enough; a fundamental change of course is needed. Thinking digital-first becomes essential, which has a massive impact on business operations.
Ask TV4 in Sweden and TV2 in Norway, and in their wake SVT and NRK. In Scandinavia, Netflix and Amazon Prime had an early impact. The leadership of these broadcasters quickly realized that these new competitors would make life difficult for them. As is typical in Scandinavia, swift interventions were undertaken, and strategies were overhauled. It soon became clear that this was not going smoothly: two years after formulating a new strategy (with a strong focus on streaming) then-CEO of TV4, Casten Almqvist, concluded that the TV4 ship had not yet changed course. What became apparent? The existing management had no incentive to change and was blocking the necessary transformation. Taking employees along on that journey and, if necessary, replacing them is the core of a successful transformation.
In Britain this now is understood. The BBC was early with its iPlayer. ITV has been fully committed to ITVX for the past two years and is making significant strides. Lastly, Channel 4 is moving full steam ahead, with more than thirty percent of its revenue coming from digital. RTL Nederland is the uncrowned king in the Netherlands and has managed to turn Videoland from a problem child into a promising digital platform. In Germany, broadcasters are also beginning to undergo a profound transition, with commercial channels operating a lot faster than their more conservative public counterparts.
Netflix founder Reed Hastings once called Sven Sauvé, CEO of RTL Nederland, a dinosaur when he refused a licensing deal. But it wouldn't surprise me if a large number of European broadcasters will manage to survive in these turbulent times. As long as they transform!
Jonatan bracht in 2013 het Multi Channel Network Mediakraft naar de Benelux en was daarmee de eerste die hier op grote schaal een business model introduceerde voor social media influencers. Vandaag de dag geeft hij advies aan allerlei publieke figuren en organisaties over hun (social) media strategie, was hij recent interim COO bij Buma/Stemra en vervult hij nu de rol van interim Director Broadcasting bij NEP.
Tess en Britt startten zo’n 3,5 jaar geleden For You Agency. Dit begon met het managen van TikTok-creators maar is inmiddels uitgegroeid tot een allround social media marketing agency dat merken helpt om Gen Z te begrijpen, te bereiken en zich daarmee te verbinden. For You Agency doet dit door social media accounts te beheren, creators te managen en allerlei campagnes te bedenken en te produceren.
- Waarom groeit TikTok van alle social media platforms het snelst, voornamelijk in de jongste doelgroepen?
- Wat is het grote verschil tussen het media maken met en voor Gen Z, ten opzichte van bijvoorbeeld Millennials?
- En welke (media)bedrijven begrijpen dit spel? Welke nog niet? En waar zit dat in?
De antwoorden hoor je in de 3Rivers: Joost Mag Het Weten podcast
In the 1960s, the United States fell behind in the space race with the Soviet Union. Yuri Gagarin was the first human to break through the Earth's atmosphere, a monumental achievement. Unable to accept this, the United States - through President John F. Kennedy - established the goal of landing the first person on the moon within a timespan of 10 years. The rest is history and the wording of such a distant, grand objective became known as the 'moonshot goal.'
Stating such a goal is even more important when things are a bit difficult. That was the case with Kennedy's example and is the case for many public broadcasters in Europe. The sentiment in politics is generally unfavorable, budget cuts are commonplace, and digital competition is capturing viewership share. Young people are increasingly unable to find public broadcasters, and consequently a significant strategic crisis has emerged. This is the situation in Scandinavia, Germany, the United Kingdom, and in our own country. Let alone the situation in Poland and Spain.
So, there is a crisis in public broadcasting in Europe, precisely at a time when polarization is increasing, and misinformation is rampant. Especially during such times, it is crucial to prioritize neutral reporting and foster a sense of community. Excellent leadership is invaluable in such circumstances. And it's not the first time that the BBC has set an example during such times. Tim Davie, the excellent Director-General of the BBC, spoke at a Royal Television Society event last month. His argument centered around the fact that the future of the United Kingdom is at risk in democratic, social and cultural terms. He saw three roles for the BBC in countering this threat. Pursuing truth with no agenda by reporting fearlessly and fairly. Backing the best British storytelling by investing in homegrown talent and creativity. Lastly, bringing people together by connecting everyone to unmissable content.
That's what you call a moonshot goal! Because what follows from this? The BBC must serve its 'customers' from every platform, at all times. BBC Three will be closed as young people will find BBC content online, via iPlayer. New services are being developed, such as BBC Verify: the future major fact-checker. Interventions will be made in the BBC organization to make all this possible. And finally, the BBC will also explore whether a new, better funding system than the archaic licensing fee can be developed.
Isn't it wonderful? In the United Kingdom, significant changes are being developed from a strategic perspective. In the Netherlands, we only see politically motivated cost-cutting measures within the public broadcaster, neglecting the pursuit of deliberate strategic advancement in the media sector. I rest my case...