I have recently given some talks on the current state of the TV sector, which I thought I’d summarise and share here over a series of short articles:
1 of 4 | The Current State of the TV Sector
2 of 4 | Everything Old is New Again
3 of 4 | The Consumer Perspective
2 of 4 | Everything Old is New Again
- Disruption in business is like evolution in biology. Lots of new functionalities/characteristics are tried out, but natural selection means that only the most successful remain and thrive. All the others quietly fade away.
- The streamers disrupted many established ways of doing things - they had no ads, they released all episodes of a series all at once, they kept their content exclusive to their platform. However, many of those innovations are being rowed back, making the TV business look a lot more like it did prior to the arrival of the streamers.
- Here are some examples:
The introduction of advertising on streaming platforms
- Ad tiers were introduced with two aims in mind: to increase subscribers by offering a lower fee option, and to introduce a new revenue stream in businesses that could no longer rely on subscriber growth alone as the only metric on which to be judged.
- Advertising, in turn, leads to a different kind of content. Subscription TV is like gym membership – the owner of the gym doesn’t really care how often you go, only that you pay your monthly subscription. It’s the same with the operator of a subscription ad-free VoD service - ultimately, it doesn't really matter how much you watch, only that you keep subscribing.
- However, a streamer with an ad tier really cares how much TV you watch on their platform, as that viewing drives their ad revenues.
- Therefore, as live works well for advertising, we are seeing more content that works well live. Using Netflix as a good example, see:
?? its WWE deal – the USD5bn fee starts to make perfect sense in the context of WWE delivering a guaranteed and consistent live audience throughout the year,
?? after renouncing sport for years, buying Xmas day NFL games,
?? declaring that finding a big 'shiny-floor studio show' is now a big priority.
- That looks a lot like the components of a traditional linear ad-supported TV schedule.
- Indeed, Netflix have said that they are looking at the data and trying ways of 'surfacing' the right type of content at a time the audience is most likely to be interested. As
Emily Horgan
pointed out in a recent post, this has been around in linear TV for a long time and is called dayparting.
Other examples of old-is-new include:
- After years of talent buy-outs, streamers are looking at offering high-end talent back-end deals again.
- Streamers are starting to license some of their content off-platform.
- After years of insisting upon IP ownership, there is a quiet acknowledgment that perhaps some non-major studio content creators may be able to retain their own IP.
- Streamers started to release episodes of some series weekly.
- Some, like Netflix, bringing more and more of its productions in-house – recalling the old vertically integrated studios with their own networks and theatres.
- Lastly, and most importantly, as we’ll see in the next two posts, streamers are starting to bundle their offerings together to drive revenue, and, more importantly, reduce their biggest problem, churn. More on this in posts 3 and 4.
Beyond the genuine two innovations caused by the disruption of the delivery of content - (i) the internet allowing on-demand viewing, and (ii) being able to go direct to consumer - the biggest trend in the last year or so, happening quietly and without fanfare, is streamers rejecting many of their move-fast-and-break-things innovations and moving back to what looks a lot more like the traditional television business.
Next, in post 3 of 4 | The Consumer Perspective of television today.
Senior Vice President, Global Content Sales at A+E Networks
8 个月Great stuff, JR, aka The Legal Sage Miss you, man! (I want my MTV! ;)
Media and Entertainment lawyer with leadership experience in US Studio with extensive experience in production and development of film and high end television across the world.
8 个月Concise and inciteful. Trying to bring the costs down of operating a platform seems to drive many of these changes for the non-Netflix players. Thanks Jeremy
Accenture - Strategy and Consulting || Etching growth stories for Communications and Media clients || Ex- Vodafone Idea Ltd. | IIM Rohtak | JEC jabalpur
8 个月Loved the article. Makes sense. Binge release was a norm we saw during the pandemic, but it had its own drawbacks. From a supply-side perspective, it creates pressure to continually churn out new content to keep the audience engaged on the platform. Once viewers finish all episodes of their favorite original release at once, there is less incentive to return to the platform. On the other hand, weekly or daily scheduling encourages viewers to come back to the platform regularly to watch new episodes. This approach mitigates streaming fatigue and provides opportunities to generate more buzz for upcoming episodes through innovative engagement tactics on social media. This strategy resembles the old era of TV scheduling, where consistent viewer engagement was the key.
Ex Disney | Content/Franchise Strategy | Dublin/London/Remote
8 个月thanks for the shout out Jeremy Roberts