It will be a very interesting media decade!
2019 ended with dignity in December with the multi-billion dollar acquisition of Entertainment One by Hasbro. The massive takeover of Time Warner by AT&T and the nearly equal acquisition of Fox by Disney are still fresh in our minds. Of course, these mega transactions have everything to do with the rapidly changing media landscape, in which the battle for the consumer predominates. This dynamic is the prelude to fundamental changes in the next decade, which is already announcing itself as the Roaring Twenties.
A number of developments that are already observable will come to fruition in this decade. The first and most fundamental is that the consumer and not the provider will determine the media business. The distribution options will be (literally) broader in the coming years with all investments in fiber and 5G. Anyone who manages to reach the consumer with the right content in these times of oversupply will be the winner. This makes effective marketing, according to Meindert Landsmeer, my colleague and analytical anchor, fundamental in the media business. An example is the new role of the traditional program director, who will increasingly function as a marketer, that transformation will be complete by the end of this decade.
Streaming and broadcasting will increasingly become intertwined. Broadcasters are going to set up streaming activities en masse, streamers are increasingly getting involved in broadcast activities. Amazon's deal in Germany, where it snatched some of the Champions League rights to Sky, is the harbinger of what lies ahead. Media companies, whether of digital or analogue origin, will become all-round. Predecessor Netflix will be part of an integrated media company in 10 years' time or has taken over other types of media companies, perhaps large content providers. The consolidation trend that has been going on for so long will lead to the emergence of a small number of media companies in the next decade to dominate the international media world.
The global advertising market, so important to commercial television, will be increasingly dominated by online. The question is whether this will also lead to a shrinkage of the traditional television market. It seems logical that this will happen in the longer term when the TV shy youth of the moment becomes the most important target group for the advertiser. The panels will then undoubtedly continue to move online, a development that, according to the British research agency Ampère, will lead to strong growth of AVOD in the short term. In any case, broadcasters and pay TV providers will have an even harder time and will have to diversify or merge. It will be a true battlefield in the field of commercial television.
How will public broadcasters fare? Many will think that by the end of the Roaring Twenties, many public broadcasters will have ceased to exist. I don't think this will happen: in this case the consumer is not about it, but politics. If independent and multiform journalism and locally produced content continues to be important, the position of the European public broadcaster, in whatever form, will be maintained.
It will be a very interesting media decade!
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!