Kate Bulkley, Media Analyst.

The VoD battle lines are drawn

By Kate Bulkley

Broadcast News

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For Broadcast October 23, 2019

Traditional TV execs know that linear is dying, but can SVoD save them? asks Kate Bulkley

It’s official: the linear TV business is in full-blown decline and its heyday isn’t coming back. That’s the narrative across the world, at least in places with good broadband.

Oh sure, there will continue to be big TV events – the Super Bowl will pull in huge audiences and big advertising dollars, for example, and live entertainment and certain drama series will perform on linear as well. However, the audiences that Strictly Come Dancing and a Game Of Thrones finale can attract will be the outliers.

Some of us have seen the decline for a while but now even the world’s leading TV executives are singing this tune. At Mipcom last week, Robert Greenblatt, head honcho at Warner Media Entertainment, described US broadcast market leader NBC, which he ran for eight years between 2011 and 2019, as a “declining business”.

“While linear numbers are down, the total audience figure when combined with other platforms is significant”

Greenblatt believes linear must capture and monetise every TV delivery platform, which is why Warner Media will launch streaming service HBO Max next year. While linear numbers are down, the total audience figure when combined with other platforms is significant, he noted.

Take NBC’s primetime hit This Is Us, which won the US ratings battle with its fourth series opener last month. That episode attracted nearly 40% fewer viewers than the series three premiere and since the start of the series, its audience has continued to dip.

The series is averaging 7.3 million on linear TV, but that number surges to 20 million when non-linear is added.

Even Greenblatt’s new title – chairman of entertainment and direct-to-consumer (D2C) – is indicative of the new mood music in the broadcasting business. The big studios are retooling to get into the on-demand TV business – Mipcom even called its conference theme The Streaming Offensive.

Greenblatt has a familiar formula for winning the streaming wars: “Find the shows that no one else is doing. If you build it, they will come.”

That’s worked before. Greenblatt joined NBC when it was in fourth place in the US ratings. Olympics and NFL football coverage provided ‘air cover’ as he retooled the linear schedule and the turning point was when he bought The Voice. By his third year, NBC topped the ratings charts.

Clues to his new strategy emerged last week. HBO Max’s Grease: Rydell High, a musical series based on the eponymous film, will be released weekly. Greenblatt is also planning to use technology to target audiences, build a strong algorithm and ‘out-data-mine’ digital rivals.

Unlike some execs, Greenblatt has been saying that D2C is the future for five years, but the issues are timing, firepower and ease of use.

Do Warner Media and Disney have the depth of catalogue to attract subscribers? Will they put enough money into originals? Will their scheduling approach appeal to audiences? And will their pricing and interfaces be enough to keep users coming back?

Another question is how many SVoD platforms people will pay for. Insight firm MIDiA Research suggests most will pay for no more than three. Meanwhile, as those services ramp up and linear TV audiences reduce, plenty of advertising money is looking for a new home and ad-supported (AVoD) services like Tubi TV are taking advantage.

Tubi announced at Mipcom it will launch in the UK in 2020, along with child-focused streamer Tubi Kids. Rakuten TV is also launching an AVoD to complement its existing paid-for new-release cinema service, which is available on smart TVs in more than 30 million homes in Europe.

So what’s the more powerful: SVoD or AVoD? Tubi chief executive Farhad Massoudi believes offering up vast amounts of content and helping users find it through machine-learning technology differentiates the AVoD from the paid-for streamers.

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