The marketing efforts of VOD players dry up: the focus will shift from subscriber growth to profitability.
Predicting the future of media is just like predicting the weather: the truth all too often overtakes the forecast. Last year, I made some tentative attempts to predict the future in a number of columns and - to my relief - those were more often right than wrong. That's why I've gained just enough confidence to look into the future again...
The first one is rather safe: AVOD is going to make a massive breakthrough this year. All major SVOD players are heading in that direction and eventually it will become roughly one-third of their revenue. Remarkably enough, VOD is starting to look more and more like commercial television in this way. Allowing advertisements on the platform used to be a taboo for Netflix a few years ago, but the market leader cannot avoid it, in a time when consumer purchasing power is so heavily affected. Co-market leader Disney is also going to embrace AVOD.
The next prediction is a more bold one. Currently, on-demand accounts for around 30% of the consumer viewing behaviour. I previously argued that the tipping point has already taken place and that the shift to on-demand viewing is going to accelerate significantly. I think major players like Amazon, Apple and Google will invest massively in sports rights, while DAZN will also stay very active. Sports are one of the mainstays for public -, commercial - and pay television: the above-mentioned trend will hit traditional television hard. At the end of 2023, more than half of the viewing time will be spent online, I think.
A few years ago, broadcasters took the initiative to cooperate more closely in order to withstand - in particular - the American Tech threat. I think this development will stop in 2023. Broadcasters have understood that they will have to protect their brand and that this is incompatible with common VOD activities. ITV has already launched ITVX in the UK and similar situations will emerge at local media companies in other countries. Salto and Britbox will gradually be suffocated in their own national market in the coming year.
The increase in scale of media companies will also be brought to a halt. There will be no more major mergers. Only in the production market there will still occasionally be a takeover, but mega deals like the Discovery - Warner merger are a thing of the past. 2023 will be the year of operational excellence. The merger plans of RTL and Talpa will falter because ACM is an obstacle. Thomas Raabe, the CEO of RTL and Bertelsmann, can forget about his dream deal in Germany, a merger between RTL and P7S1.
And finally: the growth will cease in the production market. The marketing efforts of VOD players dry up: the focus will shift from subscriber growth to profitability. The production market will decline by around 10% and will stabilize at that level. In and of itself, this already is fantastic news for producers, because this is still well above the market size of 5 years ago. There still glows a little hope because TikTok is going to invest in long-form content and YouTube will have to participate. Well, we'll see....
In the 1960s, the United States fell behind in the space race with the Soviet Union. Yuri Gagarin was the first human to break through the Earth's atmosphere, a monumental achievement. Unable to accept this, the United States - through President John F. Kennedy - established the goal of landing the first person on the moon within a timespan of 10 years. The rest is history and the wording of such a distant, grand objective became known as the 'moonshot goal.'
Stating such a goal is even more important when things are a bit difficult. That was the case with Kennedy's example and is the case for many public broadcasters in Europe. The sentiment in politics is generally unfavorable, budget cuts are commonplace, and digital competition is capturing viewership share. Young people are increasingly unable to find public broadcasters, and consequently a significant strategic crisis has emerged. This is the situation in Scandinavia, Germany, the United Kingdom, and in our own country. Let alone the situation in Poland and Spain.
So, there is a crisis in public broadcasting in Europe, precisely at a time when polarization is increasing, and misinformation is rampant. Especially during such times, it is crucial to prioritize neutral reporting and foster a sense of community. Excellent leadership is invaluable in such circumstances. And it's not the first time that the BBC has set an example during such times. Tim Davie, the excellent Director-General of the BBC, spoke at a Royal Television Society event last month. His argument centered around the fact that the future of the United Kingdom is at risk in democratic, social and cultural terms. He saw three roles for the BBC in countering this threat. Pursuing truth with no agenda by reporting fearlessly and fairly. Backing the best British storytelling by investing in homegrown talent and creativity. Lastly, bringing people together by connecting everyone to unmissable content.
That's what you call a moonshot goal! Because what follows from this? The BBC must serve its 'customers' from every platform, at all times. BBC Three will be closed as young people will find BBC content online, via iPlayer. New services are being developed, such as BBC Verify: the future major fact-checker. Interventions will be made in the BBC organization to make all this possible. And finally, the BBC will also explore whether a new, better funding system than the archaic licensing fee can be developed.
Isn't it wonderful? In the United Kingdom, significant changes are being developed from a strategic perspective. In the Netherlands, we only see politically motivated cost-cutting measures within the public broadcaster, neglecting the pursuit of deliberate strategic advancement in the media sector. I rest my case...
Na een loopbaan bij de commerciële (SBS) en publieke (KRO-NCRV) omroep belandde Rijssemus bij producent IDTV, onderdeel van het Britse All3Media dat hem uiteindelijk richting Berlijn dirigeerde om ook de Duitse markt te veroveren. "Dat had ik niet verwacht, moet ik zeggen", aldus Rijssemus lachend. "Ik dacht: ze vragen me voor Amerika, of een bedrijf ergens in de UK misschien."
Wat trof Rijssemus aan en is Duitsland nog steeds 'de heilige graal'? "Je moet de balans vinden: hoeveel energie geeft en kost een baan je?"
Hoe kwam deze student fiscaal recht en economie uiteindelijk in de mediawereld terecht en waarom wilde hij namens RTL zo graag Videoland overnemen? “We hebben daar veel van geleerd en ook heel veel fouten gemaakt, met name een deel infrastructuur totaal nieuw moeten bouwen”, blikt Habets terug. “Toen we 40.000 abonnees hadden, bleek het platform niet meer aan te kunnen…”
Inmiddels opereert hij vanuit München op de Duitse markt en past ook daar zijn ervaring toe met “het omkatten van een televisie- naar een streaming first-bedrijf.” Habets romantiseert zijn internationale carrière niet: “Je moet eerlijk zijn naar jezelf en het doen om de juiste redenen, anders wordt het gewoon een baan.”