Streaming is TV’s next gold rush
By Kate Bulkley
For Broadcast September 25, 2019
Producers and hit franchises are set to benefit from the coming SVoD battle, says Kate Bulkley
The punch-through power of a big franchise was confirmed by the big-screen continuation of ITV’s hit drama series Downton Abbey beating box-office expectations both in the US and abroad.
The film, which finds Lord Grantham and family hosting a royal visit in 1927, proves that a well-told story is more important than the media in which it is delivered.
The drawing power of Downton Abbey also underlines why competition for the biggest TV franchises is hotting up as rival streaming companies look to stand out in an increasingly cluttered on-demand landscape.
Netflix has understood the importance of offering subscribers popular brands from its early days, and distributors of TV franchises used to be only too happy to sell their post-syndication fare to the fledging streamer, considering it new money for old rope.
While many observers of Netflix focused on its big original commissions – starting with House Of Cards – older series such as Friends, Grey’s Anatomy and The Office have also been huge draws.
Even as Netflix has moved further into original commissioning, it has remained keen to acquire series that have the profile and pull to keep subscribers on its platform.
“As competition among streamers heats up, expect series with punch-through power to attract big price tags”
The SVoD service recently signed a five-year global streaming rights deal for cult comedy Seinfeld, under which all nine series will be exclusively available from 2021. Netflix is reported to have paid a whopping $500m (£400m) for a show that first aired 30 years ago.
As competition among streamers heats up, expect series with punch-through power to attract big price tags: Netflix chief executive Reed Hastings last week admitted to an RTS Cambridge audience that it lost out to Amazon in a bidding war to acquire the streaming rights to Phoebe Waller-Bridge’s Emmy-winning BBC3 hit Fleabag.
Licensing to Netflix and Amazon has netted billions for Warner Media, Disney and others, but it has also conditioned consumers to seek out big-name franchises on those platforms.
Now the tables are turning, as legacy media companies move into the streaming media game big time.
Netflix is losing Friends to HBO Max, while NBC Universal’s soon-to-launch Peacock will be the new venue to binge watch The Office US, starting in early 2021. Some reports suggest Disney will pull Grey’s Anatomy from Netflix for its Disney+ service.
Hastings is acutely aware of his new reality – he told the RTS Cambridge audience that “a whole new world” begins in November when Apple TV+ and Disney’s new SVoD go live. Netflix’s share price dipped to a nine-month low following the admission.
Netflix will continue to commission lots of original programming – both to stand out, and to replace the TV franchises it will lose to competitors. This will benefit the UK production sector – Netflix is establishing a hub at Shepperton Studios and plans to spend more than $500m (£400m) on British productions this coming year.
The need for standout content means more demand for producers but there is concern about the rising cost of talent, both in front of and behind the camera. Hastings believes that costs will continue to inflate as competition increases. Worryingly, he joked that “someday The Crown will look like a bargain”.
The first series cost an estimated £100m, giving the Peter Morgan-penned drama the moniker of being the most expensive TV series ever made at the time. Of course, it wasn’t made for TV, but for Netflix.
You can expect the cost of originals and the hits of old to attract top prices in future. The new gold rush is in streaming media and the prize is to become one of few services that consumers can’t live without.