Kate Bulkley, Media Analyst.

Stakes high as the streaming wars heat up

By Kate Bulkley

Broadcast News

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For Broadcast September 24, 2020

Traditional players are playing catch up having lost power to digital players, says Kate Bulkley

Kate Bulkley

The ravages of Covid-19 show no sign of fading away, and the changes in TV consumption that have been exacerbated by lockdown viewing seem to be here to stay.

Streaming has become the new normal and traditional media companies from the BBC and ITV to Warner Media and ViacomCBS have realised this pivot is the key to remaining relevant to consumers into the future.

Added to that, traditional media companies are losing influence.

Washington is obsessed with Chinese-owned video-sharing app TikTok and not with Quibi, Hollywood’s struggling bid to become a premium player in the app world. US and EU regulators are more concerned with how Facebook moderates political advertising than how many ad minutes linear channels are allowed to play per hour.

Most traditional media companies are now playing catch-up. To that point, AT&T-owned Warner Media stunned Hollywood last month by firing just about all its leading traditional TV execs – including entertainment chairman Bob Greenblatt and Jeffrey Schlesinger, who ran the lucrative TV licensing business and has been a fixture at Mip markets for 37 years – and promoting those with strong backgrounds in streaming and internet content.

Warner Media’s new chief executive Jason Kilar has a background at Amazon and Hulu, from where he resigned after bumping heads with its broadcaster owners.

ViacomCBS is also embracing streaming. The company that owns MTV, Comedy Central, the Paramount film studio and Nickelodeon still generates more revenue from licensing than from its own streaming services, but Bob Bakish is bullish about the prospects for the latter. That’s a big shift from a chief executive who had repeatedly said ViacomCBS would be “an arms dealer” and sell its content to the highest bidder.

“Streaming is not a nice ‘to have’ but is the key to remaining relevant to consumers into the future”

Bakish has now elevated Olivier Jollett, the European head of its AVoD service Pluto TV, to lead an “aggressive phase of digital transformation” across Europe, the Middle East, Africa and Asia, and has unveiled Paramount+, its international streaming service, which will launch next year as a “super-sized offering” of original and library content.

Traditional media players have been forced to pivot from wholesalers of TV and films to direct retailers of content who are as focused on subscriber retention, marketing strategies and streaming interfaces as making good programmes.

Disney led the charge into global streaming by launching Disney+ nearly a year ago. The timing was exquisite, with lockdown keeping people at home.

Not all streamers will be so lucky, however. Britbox could struggle to stand out in the UK, where British content is available everywhere. When director general Tim Davie discussed the potential for the service, he spoke of its success in the US and ability to grow globally.

The power that Hollywood and TV wield is going through a sea change. As traditional media companies embrace streaming and digital, the Trump administration has targeted TikTok as part of its cold war against China, a move that has caused the resignation of chief executive Kevin Mayer – the man responsible for launching Disney+ around the world.

Some see the hiving off of the US business of TikTok, which has 100 million monthly active users in the States and a valuation of around $20bn (£15.6bn), as a huge growth opportunity – among the active bidders are Microsoft, Walmart, Oracle and a rival video app called Triller.

Traditional media players aren’t in the running and their finances may reveal why. For example, ViacomCBS’s total market cap is around $17bn (£12.4bn), while AT&T’s is $208bn (£156.5bn) but with a whopping $169bn (£127.2bn) of debt – so a deal would make little sense.

The stakes are high in the media content world and this doesn’t look to be changing any time soon.

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