The solutions are there: now let’s see who can put this in practice!
One of the biggest threats to media organizations is the churn rate, the extent to which consumers end their relationship with a media company. For years, the term was only used in pay-TV, but lately it can be seen in a much broader context. It is the silent killer behind the performance of media companies: after all, everyone likes to report a growing customer base and then churn is the big enemy.
A special form of churn is the decreasing viewing time of linear television. We know of course that viewing time of the traditional consumer is decreasing, a deadly development for 'ordinary' linear television. The biggest danger is that there are also few new viewers, because young people turn away from television. The rinsing is getting thinner and thinner. Broadcasters therefore started developing on-demand initiatives a long time ago. But for the time being, commercial broadcasters are still enjoying the enormous recovery of the advertising market. And as it goes, that reduces the urgency to change quickly.
Distribution companies must deal with churn too. They give this phenomenon the name cord cutting: the extent to which consumers watch media 'over-the-top' and refrain from cable subscriptions. This phenomenon is particularly noticeable in the United States, but it is also beginning to gain foothold in Europe. Because young people tend to turn to over-the-top, churn in the distribution world is starting to hurt. However, the operating margins of cable companies are so enormous that they continue to yield good returns in the short term, and here too this means that there is no need for major change in the short term.
In the VOD markets, churn is obviously the biggest threat. After all, the business model is often based on subscriptions, similar to the model of pay-TV. With the increase in the number of providers, churn is becoming an increasing risk. Acquiring new customers is a costly affair, which is why retaining existing customers is of vital importance. Netflix and Disney seem to be succeeding quite well in retaining customers, but it is questionable whether other providers will also succeed. With some new VOD platforms, the number of new customers is disappointing: the first hairline cracks are already noticeable at providers such as French Salto, German Joyn and Flemish Streamz. The shareholders of the first two companies are already openly doubting whether they should not get out now.
What media companies should do above all is increase the stickyness of their products: captivate customers so much that they do not think about running away. For broadcasters, this is possible through live events, blockbusters, urgent programming, with distribution companies through excellent service and high bandwidths and with VOD providers through exclusive programming, an intuitive and personal viewing experience and sophisticated marketing. The solutions are there: now let’s see who can put this in practice!
Time for your columnist to once again take stock of the predictions he made at the beginning of the year. Post-dictions, if you will. This January, I put myself on the line with four predictions that, as it turns out, weren’t all accurate. Let’s review them.
Prediction 1 was that streamers would intensively engage with sports broadcasting rights, and prices would rise significantly. Along the way, I also suggested that the Formula 1 rights in the Netherlands would end up at RTL or Ziggo. As we now know, these rights remained with the streamer Viaplay, thanks to an ingenious deal in which Viaplay’s Scandinavian operations acted as leverage. Still, streamers have not yet aggressively conquered this market segment. Quality issues with the Italian Serie A and the Tyson vs. Jake Paul fight revealed that for mass events (which sports are), the streaming technology still falls short.
Prediction 2 concerned consolidation in the audiovisual media sector. I predicted that the Warner and Discovery merger would be surpassed. While Paramount was indeed acquired by Skydance and private equity fund Redbird IMI took over All3Media, these deals did not represent consolidation. In fact, it was fairly quiet on the acquisition front. The merger between Discovery and Warner caused so many issues—primarily due to the debt mountain the combined company accumulated—that other media companies chose to wait and see.
Prediction 3 revolved around the use of data in the media industry. I forecasted a significant increase in the use of data in our field. It’s undeniable that data usage will grow, even in programming decisions. The growth of the Dutch company CIA, led by Mark Ramakers and Hans Bouwknegt, shows that acceleration is indeed on the horizon. However, there’s no revolution in sight yet, and developments are progressing more slowly than I anticipated.
The fourth prediction focused on the position of public broadcasters in Europe. I argued that public broadcasters would retain their value and were headed for a bright future. In the Netherlands, the €100 million budget cut wasn’t as severe as expected. The proposed privatization of Channel 4 in the UK was put on hold by the Labour government, and the remarkable digital successes of broadcasters like SVT and NRK in Scandinavia were widely praised. ZDF and ARD in Germany are also in relatively good shape. Good news for public broadcasting!
What’s in store for 2025? First, we’ll find out whether the proposed consolidation in the Netherlands, through RTL’s acquisition by DPG Media, will be brought about. Meanwhile, the growth of streaming will continue unabated. Finally, it will become evident that millennials won’t return to traditional television, sticking instead to social media and streaming video. Broadcast, in its traditional form, will further lose significance, though mass reach will remain as relevant as ever.
And finally: generative AI is going to turn the media industry upside down. Guaranteed!
Meindert schopte het eerst van enquêteur tot directeur bij marktonderzoeksbureau Ipsos. Vervolgens stapte hij over naar de media en was hij in 2008 een van de oprichters van 3Rivers. Vanuit 3Rivers gaf hij talloze adviezen, implementeerde die idealiter ook en deed dit onder andere als ad interim directeur SBS Productions, director van content & productions bij RTL, mediadirecteur van KRO-NCRV en zakelijk directeur van de NTR.
Justine was eerst format-ontwikkelaar en eindredacteur bij producenten als SBS Productions, Eyeworks en IDTV. Vervolgens maakte ze de overstap naar de zender-kant en werd ze directeur bij Net5 en programma-coördinator bij RTL 5. Inmiddels leidt ze SimpelZodiak, het label van Banijay dat specialist is adventure, crime, factual entertainment en reality. Zo maken ze bijvoorbeeld Hunted, De Bauers, Expeditie Robinson, Ik Vertrek én misdaadprogramma’s van Kees van der Spek.
Wat voor structuren, processen en cultuur zijn essentieel om creativiteit te kunnen laten floreren?
Hoe kan je daarvoor juiste veranderingen aanbrengen in je organisatie?
En hoe combineer je creatieve vrijheid met de nodige verantwoordelijkheid en efficiëntie?
Two years ago, I predicted that the MIP fairs in Cannes were doomed. After the COVID crisis, particularly the Americans and Asians struggled to find their way back to Cannes, the bunker-like Palais was half-empty, and the fair had become a depressing affair. The recent MIPCOM couldn’t have been more different: the sun was shining, exchanges with industry peers were intense, and the spirit was fully restored. Half of my earlier prediction proved accurate: the spring MIP has indeed perished. However, MIPCOM is back in full swing and is here to last.
The reason? MIPCOM is increasingly becoming a meeting place for the international media world. It’s no longer a marketplace; instead it is primarily a place to exchange ideas and uncover the latest trends. It was heartwarming to see young producers from the Benelux excelling: Rutger Beckers from Sputnik in Belgium, Jeroen Koopman from Newbe and Wouter van der Pauw from Signal.Stream. Wouter and his partner, Giel de Winter, are succeeding in reaching generations that have turned away from broadcast television. Their rapidly growing company mainly produces for streamers and recently delivered the series Het Jachtseizoen for Videoland. John de Mol often has a nose for this type of talent and was quick to acquire a stake in Signal.
Nevertheless, there was still a bit of complaining from the many producers present, regardless of where they came from. The days of "peak TV" are over: streamers have stopped making heavy marketing investments in content, and the American industry is back on track after the big strikes. This last factor mainly affects British and Australian producers, who had cleverly filled the gap in the U.S. The market has returned to square one and production volumes are back to normal levels. This brings a major advantage: consumers are no longer overwhelmed with excessive content offerings.
Naturally, much was said about the mega-changes taking place in our market. Evan Shapiro, who has made a name as a "media cartographer," offered insight into something we all knew: young people in the 16-34 age group hardly watch broadcast television anymore. This percentage has dropped further, from nearly 20% in the UK in 2022 to 14% in 2024. Social video and streaming continue to grow, and advertisers are naturally following suit. Broadcasters will have to develop their streaming activities as quickly as possible to maximize digital reach.
In this perfect storm, it’s also crucial for producers to embrace new opportunities. Young entrepreneurs like Wouter van der Pauw, Rutger Beckers, and Jeroen Koopman are eager to take advantage of these opportunities. It will be interesting to see if the large, consolidated production companies will also be able to crack the code of young viewers. That’s the challenge facing many of the MIPCOM attendees.