The takeover battle has never been so fierce.
The media world is changing at a tremendous pace. Sometimes that sounds like a cliché, but it is undeniably true. World Screen News, an excellent source of information for many media experts, only once listed what happened in our world in 2018. It is too much to mention and of an unimaginable scale. There is no doubt: the media world has never been so fundamentally in flux.
First of all, take the unimaginable growth of streaming video. It has taken a considerable number of years for video-on-demand to break through, but now that technological barriers are increasingly disappearing, growth is unstoppable. Growth rates of 60% and more are measured in some parts of the world. Netflix and Amazon are leading the way, but there are an incredible number of new players who want to claim a share of the market. First of all, these are the existing broadcasters and pay-TV operators, but also all kinds of niche players that focus on a smaller market segment. However, the unprecedented possibilities of streaming video mainly mean that the FANGA companies are marching into our world at great speed.
Under this pressure, the existing players in the media world are switching to an old strategy: to achieve as much economies of scale as possible. The takeover battle has never been so fierce. AT&T acquired Warner, Disney acquired much of Fox's assets, Comcast acquired Sky. These mega transactions, each more than $ 50 billion (!), Are the tip of a big iceberg. It does not seem unlikely that this trend will continue, although the impending Brexit and the fragile world economy could of course throw a spanner in the works. But one big deal already seems to be coming: after the fall of obstacle Les Moonves, CBS and Viacom could indeed merge this year.
Because new and old players strive for the favor of the viewer (rather read in the current era consumer), content providers are rubbing their hands. It is all hands on deck for producers, which is why this part of our industry focuses less on acquisitions: none of the larger players ventured into the tasty snack called Shine Endemol. The focus is entirely on finding and developing the right stories and the right talent to write and produce those stories. Not to mention the acting talent that these productions must credibly present to the viewer.
Finally, cable companies and telcos are increasingly focusing on a mix of distribution, exploitation and content. The huge deals from AT&T and Comcast have already been mentioned, but other companies have also been involved. BT is in a frenetic battle over sports rights with Sky in the UK, Swedish Telia acquired Bonnier Broadcasting and giants like Deutsche Telekom and Telefonica continued to invest in content exploitation and production. Apparently, people in all management offices have come to the conclusion that as a (media) company you can only be successful as a fully integrated party (which controls as many parts of the value chain as possible). John de Mol does this "in miniature" in the Netherlands.
Overlooking this battlefield, the big question is of course what 2019 will bring us. Many strategists overlook this, especially given the uncertain times in the world economy as a result of slow growth, trade wars and Brexit. It is clear to media companies that a standstill means a considerable decline. There are still a number of major acquisitions on the way, streaming video continues to grow rapidly and the first providers in this field are going under. A major shake-out / consolidation awaits us in the coming years, starting in 2019.
Taco began his career on the content-production side, at SBS, before transitioning to public broadcasting in 2009, where he led KRO. After overseeing the merger with NCRV in 2014, Taco became CEO of IDTV (part of All3media) in 2017. At IDTV, he formed a creative team that developed the hit show De Verraders. From 2021 to 2024, he led All3media’s companies in the Netherlands, Belgium, and Germany. Taco also earned his PhD in 2014, showcasing his dedication to learning and expertise.
Oege Boonstra, partner at 3Rivers, says: “We are thrilled to welcome Taco to our team. His deep expertise in both the creative and operational aspects of the media industry, combined with his strategic insight, will be invaluable to our clients. His experience in media management and talent development aligns perfectly with our mission to drive success for media companies.”
Taco Rijssemus on his new role: “I’m excited to join 3Rivers and collaborate with such a skilled team. The media landscape is constantly evolving, and I look forward to applying my experience to help our clients navigate these changes and achieve meaningful results.”
The streaming market is gradually becoming mature. There will still be significant growth, but the tumultuous numbers from the early phase are now behind us. The number of new entrants of any significant size is also drying up, so we can gradually begin to take stock: which companies will survive, which will fail, and what new developments can we still expect?
Let's start with the latter. A few years ago, it seemed that local players could only compete with the big American Tech competitors by working together intensively. In hindsight, this has not materialized at all. Initiatives like the French Salto went under, Britbox eventually became a ‘BBC only’ endeavor (ITV sold its share), we hear little about the Flemish Streamz, and NLZiet in the Netherlands is now cleverly positioned as an alternative to cable, while NPO and RTL are building their own streaming platforms.
Most broadcasters have now realized the critical importance of their brand and are eager to add a +, Play, or MAX behind their names to establish their presence in the digital world. By using the content budget both analog and digital and coming up with smart combinations, they are able to create a new future. With good technology now widely available and no longer a significant barrier, there is no doubt that local broadcasters take charge of their own digital future to survive. The latest in that lineup is Channel 5 in the United Kingdom, which is going to exploit all digital activities under one brand name, 5.
Moreover, the major international media players face significant challenges in keeping their traditional businesses afloat. The write-offs that Paramount and Warner Discovery (WBD) have taken in recent months (each amounting to nearly ten billion dollars!) speak volumes. The traditional business is increasingly under pressure, and investors see that too. For instance, WBD’s stock received a downgrade from Standard & Poor's (to negative). That must cause a lot of pain in the boardrooms.
What does all this mean for the streaming market? First of all, it means that many more local brands will survive than previously thought. All traditional broadcasters are rapidly transforming into digital media companies because they know that otherwise their days are numbered. While the number of local players increases, the number of international players will, however, shrink. The large American media companies are under immense pressure and can no longer afford the investments needed to build international streaming services.
Who will be left standing? Netflix, of course, which systematically expands its first-mover advantage. Prime Video, backed by Amazon's commercial engine. Disney, naturally, with its broad portfolio, will survive despite the painful managerial road it has traveled. And the aforementioned WBD, which continues to invest heavily in (HBO)MAX. Finally, DAZN, though it is still burning through cash. With Apple, you never know. But the other international players are not going to make it. That is certainly something few could have predicted three years ago...
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!