MIPTV 2023: Industry looks back to move forward as market dynamic shifts

As MIPTV TV celebrates its 60 birthday, looking back to some of the old ways of doing business was the core theme of the market; and old in the context of the fast-moving entertainment business means a few years ago. MIPTV seems to have embraced its role as the smaller sister to October’s MIPCOM. Attendance at this year’s event was 5,510; that was up 1,000 on last year’s event according to organizer’s 励展博览集团 , but still a long way from peak MIP. For delegates on the ground, the reduced number of stands made for a ‘relaxed busy’ few days with time for lunch without rushing around the Palais for the next 30 minute meeting slot. The new MIP Lab conference area, sited in Palais -1 to keep conference sessions in the heart of the action, was packed to the walls for Ampere’s opening presentation looking at the changing content demands of streamers as the market enters a new phase of maturity and production money gets a little harder to find.

The key themes of that opening presentation were reflected again and again in the conversations and keynotes held throughout the event: the reality of the streaming market, the global economic outlook and the shifting industry dynamics mean major content owners are beginning to revisit the traditional ways of doing business and find new love for windowing, international distribution and production partnerships. With streamers like Apple and Amazon increasingly engaging with the theatrical window and major studios again talking of releasing their hitherto closely-guarded streaming originals for licensing, the market reflected a ‘what goes around comes around’ mentality that has broad implications for markets like MIP and for the future of making money from content. Jane Featherstone, CEO of production group Sister, referred to the new market reality as embracing a ‘mixed economy’ where in-perpetuity global rights become increasingly rare and co-production returns as a favoured model for high-budget drama.

If value remains in pay one and pay two windows for the streamers, there is also the increasing interest in third and fourth window exploitation through the growing opportunity of Free Ad-supported Streaming Television (FAST) channels. There is nothing new to see here. I have long argued that acronyms like AVoD, BVoD, and FAST will all disappear in the coming few years to be replaced with a simpler (old school) description (and the only one that matters to the consumer): free TV. From a business perspective, FAST as a window is simply a re-enlivened post-pay, free TV window, but the business of FAST is evolving quickly. There was much talk during MIPTV’s first FAST summit of the evolution of channels towards ‘premium’ content, the growth of FAST originals and ad-tier exclusives as looping four hours of content on FAST channel no longer cuts the mustard. But content owners with big show franchises also talked of the success they were seeing with single-IP channels.

Content owners are already re-aligning for the new market reality. ITV Studio’s Ruth Berry was in town for a Tuesday afternoon keynote, her first appearance since taking over a new role as Managing Director of Global Distribution and Global Entertainment that sees ITV Studio’s scripted and unscripted content brought together under one umbrella to reflect what buyers want. That simplification of business and reporting lines was reflected in a new simpler job title which Ruth revealed during the event: Managing Director Global Partnerships.

So if looking back from a business model perspective is the new looking forward, how did we get here and what are the implications for the content business? Central to the theme of Ampere’s opening presentation was the fact that market maturity, saturation in key countries, and a scaling back of content spend inflation means streaming strategy has switched from one of customer acquisition at any cost, to customer retention. I have always said that Netflix (and other global streamers) are TV companies, run like Internet companies, adopting the classic dot com strategy of customer growth first, worry about money second. But the time to worry about money is now.

In a crowded and highly competitive market in which the streaming stack is reaching its ceiling in mature markets and in which paid streaming TV is so well penetrated that there are few customers left to find, dynamics have to shift. Add in economic pressures and the increasing prevalence of boomerang subscription behaviour, in which subscribers come and go from streaming services, and retention of customers becomes the most important strategic goal; and you don’t need Wonder Woman (1984) to keep customers on platform. Big budget, headline-grabbing content that was suited to customer acquisition is not necessary to keep customers happy. Of course, you still need some of that ‘punch in the face’ content, but a decent reality show will also do the trick for many. And it has the advantage of costing a lot less, is well suited to localization through international formatting, works for a weekly drop, and tends to be long-running and multi-season in a single year.

The net effect is that commissioning activity by streamers (particularly for scripted originals) is slowing and that means programme spend growth will slow drastically this year

?

It also means that unscripted content for streamers is the new focus; a trend that started during COVID lockdowns and then never stopped. It’s the perfect content for retention, especially in the middle of a cost of living crisis.

Windowing, too is making a return. It’s a factor of the same pressures. For retention, do you need content exclusively on-platform for eternity? The answer, is not always. Exclusivity still rules in the paid streaming space (just as it always did in the traditional pay TV market), but Ampere data shows that acquired content is moving far more rapidly between platforms than it did just a few years ago and major content owners are even talking of licensing their streaming originals into a secondary window. That’s in the pay windows. When it comes to ad-supported the level of exclusive content drops drastically. And that’s before we even talk about FAST. If pay streamers are open to pay one and pay two windowing and ad-supported and hybrid streamers content with window three or four, that re-ignites both the international licensing business and the opportunities for co-production.

Ampere data shows that co-production has been in decline the past couple of years. The model is less compatible with global rights demands. Streamers previously happy to work with local broadcasters in exchange for ceding local territory rights for first window moved away from the model as intense competition and a global footprint to service meant they wanted those key local rights for themselves. But in a world where those rights are anyway destined to be made available to others, co-financing suddenly makes sense again.

Theatrical too is finding new fans. Apple and Amazon have both talked of increasing theatrical releasing for original movies. And despite what Netflix said recently about not wanting to ‘drive folks to the theater’, it too is slowly growing the number of films it releases to the cinema.

This renewed interest in theatrical releasing is more than just a reassessment of the old business models and the chain of value created by windowing. It also fulfils an important promotional role (in the same way that streamers like Paramount+ and Apple TV+ are using airline releasing to sell their content to a captive audience). In a world where streaming original content could soon find its way into the international distribution market, box office is a useful—and traditional—measure of value.

That brings us to the original production itself. The nature of original is changing, just as the market and audience change and mature. Unscripted content now accounts for one in every two streaming originals. It makes perfect sense in a cost-conscious production environment to make use of lower cost reality, light entertainment and documentary. Our Popularity data shows that reality and entertainment content may not have the huge impact of a big budget drama, but it is far longer lasting with shallower, but longer peaks in consumer interest; that’s key for that all important subscriber retention.

The audience is maturing…literally. Streaming growth now comes disproportionately from the over 45 age group and older people like different shows. Crime content remains one of the hottest properties for scripted entertainment simply because it satisfies the viewing demands of the older demographics. Documentary, particularly if it features music or sports stars or, better still, true crime, is another hot area for this older age group. The net effect, in a kind of convergent evolution, is that mass market global streamers are increasingly encroaching on the territory favoured by national broadcasters and other general entertainment channels.

And while we’re on the topic of aligning production focus with key growth opportunities, international remains key. We’ve previously noted the increasing skew among major global streamers towards non-US production, and that the countries of focus align with the markets where customer base is largest or growth is strongest. Today that means Asia. During the previous, troubled, 12 months, Asia represented the largest growth market for new customers to the global streaming platforms; not coincidentally, it also represented the strongest growth market for new original commissions. After Asia, the focus is on Latin America and Europe, both still high potential regions.

Adaptation of existing IP is another trend that refuses to die. While books as a source of inspiration remain the most popular, it is movies and Manga that have seen the strongest growth in adaptation over the past 12 months. Business models are not the only thing that is getting recycled, then.

The above is a review of the key trends to emerge at this year's MIP Markets - MIPCOM, MIPJUNIOR, MIP CANCUN & MIP LONDON and the wider implications for the market from Ampere Analysis. The images featured in this article are from the presentation given by Guy Bisson on the opening day of MIPTV. For anyone who missed Ampere's presentation during the market and would like to see a copy of the slides, please get in touch via Ampere Analysis .