Kate Bulkley, Media Analyst.

The Media Fightback Starts Here

By Kate Bulkley

Broadcast News

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For Broadcast October 26, 2017

Traditional players are finding new ways to take on their digital rivals

At first glance, Mipcom was much the same as ever: stands were packed with people having conversations about coproducing; global stars glided across the red carpet; and TV business leaders were fêted, led by the bosses of HBO and Discovery.

But this year was different, with a palpable level of anxiety about the impact that Faang (Facebook, Amazon, Apple, Netflix and Google) is having on the TV landscape. It felt like a sea-change moment, with the biggest media companies of the past half century openly recognising that Faang is not a side show, but a major and powerful player in TV land.

Snapchat announced a new move into scripted original content and the formation of a new studio, owned 50/50 with NBCUniversal, while Facebook ordered an English-language version of Norwegian teen drama Skam and unveiled its appetite for original programming on its new Watch tab.

”You know you’ve reached some kind of an inflection point when the digital platforms are poaching from each other.”

Now LinkedIn (yes, the business connection site) has revealed it, too, intends to jump on the original content bandwagon, while Apple stole scripted drama guru Morgan Wandell from Amazon to help its $1bn (£760m) push into video content.

You know you’ve reached some kind of an inflection point when the digital platforms are poaching from each other.

One presentation slide at Mipcom summed up the challenge. On the left-hand side were the largest tech companies in the world, headed by Apple with a market cap of $793bn (£600bn), through Google, Facebook, Amazon, Alibaba, Tencent, AT&T and Verizon, the last with a market cap of $202bn.

On the right side were the traditional media companies, led by Comcast at $179bn market cap, then Disney, Charter, Time Warner, Netflix (yeah, go figure, Netflix is considered media, not tech) 21st Century Fox and finally Vivendi, with its $27bn (£154bn) market cap.

To put this in perspective, the market cap of all the media players totals $653bn (£496bn), which is smaller than the value of Google or Apple alone.

“These tech guys could buy us all,” was how one Mipcom regular and now head of Atrium, Jeremy Fox, described the market.

Atrium is part of what I call the ‘TV fightback’. Fox and ex-Sony chief executive Howard Stringer head up the six-month-old drama financing club to help broadcasters cobble together big enough budgets to compete with the deep pockets of the global digital platforms.

The fightback is going on in plenty of other places too. Look at Disney’s recent announcement that it will no longer license its fare to Netflix, or Discovery’s deal with Snapchat to showcase its Olympics coverage.

Meanwhile, Entertainment One is creating short-form content for mobile platforms including Verizon Media’s Go90.

War for eyeballs

Former Dreamworks executive Jeffrey Katzenberg has already announced plans for his NewTV project, with a $2bn (£1.5bn) budget for short-form premium mobile content, while Vivendi’s Canal+ announced that its Studio+ premium mobile 10 x 10-minute scripted drama is bearing fruit: the series has 5 million subscribers across several telco platforms in France, Italy and Brazil.

Vivendi content chairman Dominique Delport (who is also global managing director of ad agency group Havas) believes that working with telcos is the future.

“We’re in a war for eyeballs, and money follows eyeballs,” Delport told the Mipcom audience.

He also believes that TV must “strike back” by creating compelling content like ITV2’s Love Island, as well as producing for the new mobile formats loved by younger audiences.

Vivendi-owned game unit Gameloft will give away a new Paddington Bear game for free on mobiles as a teaser for the upcoming release of the film.

“Mobile gaming is an entry point to attract new audiences,” says Delport. “The original content race has only just started.”

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