Big Media

September 4, 2021

Big Media

September 4, 2021
The broadcasters (whether they are public or commercial) have to fight for the young viewer, who increasingly ignores television.

It is by now extremely clear that Big Tech is forcing the media world to change. Google and Facebook have been conquering the advertising market at an unimaginable pace for a decade, and Netflix in particular has shown the way to the new way of television viewing. The consequences are enormous, and that awareness is all too present in the boardrooms of media companies today. The example of the music industry, which has finally re-established itself after many years of crisis, speaks volumes. Under pressure everything becomes liquid, and that means that the media companies are prepared to take very drastic steps.


After all, almost all 'traditional' media companies are under pressure. The broadcasters (whether they are public or commercial) have to fight for the young viewer, who increasingly ignores television. The commercial broadcasters  have to fight for their advertising share, because digital/online is growing fast, while television is stagnating. And at the ever very profitable cable companies, dark clouds are also starting to loom in the sky:  cord  cutting is already an important phenomenon in the United States and the first signs of this are also surfacing in Europe. In short, all traditional players see their activities threatened.


The way in which this is responded to is different. The online VOD initiatives of media companies tumble over each other: from Disney+ to Peacock, from Videoland to  Streamz, from  Joyn  to Discovery+, from  Viaplay  to  Paramount+, the number of new initiatives is almost over the top. Public broadcasters are also involved in the fight with mostly local initiatives. But by far the most important development is that media companies will defend themselves by working together on a large scale; the merger initiatives fly around our ears.


Amazon's acquisition of MGM is of course of a different nature, but it does indicate that the panels are definitively shifting. The biggest news this year was that AT&T decided to divest Warner Media, which had just been purchased a year earlier, and merge with Discovery. 


Super interesting is also what happened in France. The eternal rivals TF1 and M6 decided to merge. This is the ultimate signal that things-are-a-changing, because until recently the leaders of these companies were still competing heavily. In apparently perfect harmony, a groundbreaking deal was forged, which was undoubtedly sanctioned by the top of French politics early in trial in the Elysée Palace. L'exception  Française  isn't it? Soon thereafter, the merger between Talpa and RTL in the Netherlands was announced. There is no doubt that a similar exercise is on the cards in Germany, which would really be significant.


The conclusion: consolidation in the media world is starting to gain pace. The threats of Big Tech have led to a new phenomenon: the development of Big Media!


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Transformation

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!

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Podcast met Jonatan de Boer, Tess Scholten en Britt Messing over Gen Z

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

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Moonshots

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...

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