Lots of losers and a few winners

March 1, 2020

Lots of losers and a few winners

March 1, 2020
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.

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2024 Predictions

A new year is upon us. What are the major trends for the next 12 months, and what can we expect, not only in the Netherlands but also internationally? For those wanting to know what lies ahead in the longer term, it is best to turn to Evan Shapiro, the leading futurist in the American TMT sector. According to Shapiro, the valuations of Big Tech have once again risen to such incredible heights (for example, Apple and Microsoft are now worth over 3 trillion (!)  each), that it's only a matter of time before Big Tech will truly infiltrate and dominate the media world, in pursuit of advertising revenue. This invasion is expected to unfold through sports rights. While it hasn't reached the Netherlands yet, what happens in the US will undoubtedly make its way to us. The most captivating sports rights deal for us this year revolves around Formula 1, and it seems logical that this will be a battle between Ziggo and RTL. Amazon Prime will not join this battle for now.

Prediction 2: After a year of rest, media companies are actively pursuing economies of scale again. The initial talks between Warner Bros Discovery and Paramount have already taken place. It will be a busy year for dealmakers. As mentioned, Big Tech casts its shadow ahead, leading traditional media concerns (which are comparatively negligible in size) to strengthen their defenses. Big Tech might outpace them: the acquisition of a 'cheaply valued' company like Paramount is small matter for the new rulers. Many significant deals are on the horizon this year, surpassing the magnitude of the last major deal - the merger between Warner Bros and Discovery.

Prediction 3: The use of data will play an even larger role in the media world. The measurement of viewership and listenership figures has seen a revamp this year, and we can expect many more changes. The direction it will take is uncertain; currently, media companies benefit from various less objective measurement systems, but in the long run, this will change due to the arrival of Big Tech. In this domain, a real revolution is on the horizon.

Prediction 4: Public broadcasters will retain their value in Europe. Although we can anticipate the new coalition in the Netherlands will reduce the funding for the public broadcasting system, public broadcasters in our neighboring countries (and here as well) will survive. The required changes are enormous; just take a glance at the funding system of the BBC, which is under intense pressure. Nevertheless, the public broadcaster is definitely not heading for the slaughterhouse, contrary to the notion of many that its days are numbered.

The final prediction concerns the world of sports rights. In the past year, Serie A in Italy struggled to sell its rights. My prediction is that, also due to Big Tech's interest, sports rights prices will soar again. Excellent news for sports rights holders!

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Podcast met Tina Nijkamp en Vincent ter Voert over format-trends

Wat zijn de format-trends in het Nederlandse taalgebied en hoe doen Nederland en België het op het wereldwijde format-toneel?

Waarin zit de kunst van het maken en casten van reality-tv en waarom lijkt daar in dit tijdsgewricht extra vraag naar te zijn?

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Je hoort het in de 3Rivers: Joost Mag Het Weten podcast.

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Accountability from the Columnist

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.

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