In the current climate, financial engineering has become interesting again, with various profit concepts being mixed together.
The saying 'what goes up, must come down' is an old piece of folk wisdom. In the audiovisual content market, this certainly isn’t different. Over the past 6 years, we have enjoyed a true boom in content development and - production, which was soon labeled as “the golden years of television”. This year brings the expected correction: media companies are issuing profit warnings left and right. Whether it's RTL or ProSiebenSat1 in Europe, or global giants like Disney, Paramount or WarnerDiscovery, tough times prevail.
A further analysis of the figures from these media companies, reveals several clear trends. The traditional television business is struggling due to declining advertising expenditures. Especially in Germany the market has collapsed, which significantly impacts financial results in the media sector. In the Netherlands, the situation has been somewhat cushioned by sharply increased GRP-prices, but in other countries, the storm clouds are gathering.
Another – more creeping – effect is the inevitable shift in viewing behavior. The UK's Ofcom, which unlike our Dutch Media Authority does consistently provide solid research reports, reported this month that the change in viewing behaviour is accelerating among older viewers also. Linear viewing time in Great Britain among those aged 64+ decreased by 8% in the past year. It doesn’t bode well for broadcasters, if even their most devoted audience shifts to online.
Many media companies are now inclined to make their figures look a bit less rosy, when the market is already somewhat unfavorable. In the current climate, financial engineering has become interesting again, with various profit concepts being mixed together. Playing around with deprecation charges on produced content seems to be a common practice, with the potential write-off by WarnerDiscovery on the already produced Batgirl film as the ‘highlight’. The message is clear: the commercial market is experiencing a dip. As is often the case when the market is down, the public broadcasters are the ones consistently continuing to invest. For this reason, among others, BBC Studios has had a successful year and will do this again in 2023.
Nevertheless, all media companies are subject to the same phenomena: if they don't establish a robust streaming operation, they’re destined to fail. The challenge is that there are still very few organizations capable of operating a streaming service at a break-even point, let alone profitably. This additional financial burden poses significant problems in both the public and commercial domain. Consequently, it's logical that producers are focusing on their traditional roles in the value chain: creating and producing compelling audiovisual content. While demand may be somewhat decreasing, this mostly means that the oversaturated market of the past few years is normalizing to some extent. A blessing in disguise for producers.
For the broadcasters however, it's all hands on deck. The easiest approach is to cut in the content costs, but that would mean falling further behind on the most successful global streamers (Netflix and Amazon). These are challenging times!
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...
Na een loopbaan bij de commerciële (SBS) en publieke (KRO-NCRV) omroep belandde Rijssemus bij producent IDTV, onderdeel van het Britse All3Media dat hem uiteindelijk richting Berlijn dirigeerde om ook de Duitse markt te veroveren. "Dat had ik niet verwacht, moet ik zeggen", aldus Rijssemus lachend. "Ik dacht: ze vragen me voor Amerika, of een bedrijf ergens in de UK misschien."
Wat trof Rijssemus aan en is Duitsland nog steeds 'de heilige graal'? "Je moet de balans vinden: hoeveel energie geeft en kost een baan je?"
Hoe kwam deze student fiscaal recht en economie uiteindelijk in de mediawereld terecht en waarom wilde hij namens RTL zo graag Videoland overnemen? “We hebben daar veel van geleerd en ook heel veel fouten gemaakt, met name een deel infrastructuur totaal nieuw moeten bouwen”, blikt Habets terug. “Toen we 40.000 abonnees hadden, bleek het platform niet meer aan te kunnen…”
Inmiddels opereert hij vanuit München op de Duitse markt en past ook daar zijn ervaring toe met “het omkatten van een televisie- naar een streaming first-bedrijf.” Habets romantiseert zijn internationale carrière niet: “Je moet eerlijk zijn naar jezelf en het doen om de juiste redenen, anders wordt het gewoon een baan.”