These are tough measures, that are being appreciated by the shareholders of these companies.
Around the turn of the millennium, there was a frenzy of investment in companies that were known as "new media". Some of these companies are the tech giants we know today: Amazon, Facebook, Google... resounding successes that created enormous shareholder value. But there were also many companies that didn’t make it and went bankrupt. What was remarkable at that time was that large risks were being rewarded with additional investments. It was during this period that the concept of burn rate emerged: the amount of money a company loses per unit of time (a day, a month, or a year). You might think it couldn't get any crazier, but that is how it was at the time.
The recent streaming boom in the media world seemed to be following a similar pattern. Driven by the new Holy Grail, subscriber growth, streamers have been investing aggressively in content. Billions of dollars were available for creators, seemingly without a limit. Due to the success of Netflix, traditional media companies began to believe that investing in direct-to-consumer activities was a wise investment. With the exception of a few good examples (early entrants like RTL Netherlands with Videoland), this has slowly turned into a disaster. After all, companies everywhere are bleeding money, especially those who arrived late to the game.
Since traditional media companies do not like burn rates, there will be heavy cost-cutting this year. Warner Discovery was the first to announce a cost-cutting package of $3.5 billion (!), and Disney now is following suit and is even going further. CEO Bob Iger, who has returned to the company, has announced a whopping $5.5 billion in budget cuts, with 7,000 jobs being eliminated. These are tough measures, that are being appreciated by the shareholders of these companies.
However, there is a world where losses are still an accepted phenomenon. The sports world has its own rules, especially with regards to soccer. In the American system, club owners of the major American sports (baseball, basketball) are somewhat restrained by fair play rules. Apparently in soccer, other laws apply, where club losses are compensated for by owners who legally and often illegally supplement the club's coffers. Soccer club owners seem to have no problem with the burn rate of their plaything.
At the top of the list is sports streamer DAZN. Launched about 6 years ago by Russian billionaire Len Blavatnik as “the Netflix of Sports”, the company recently published results that broke all records. On a revenue of $1.6 billion, it suffered a loss of $2.9 billion in 2021. Given that sports rights are only an expensive loan, as they always belong to someone else, one can imagine that DAZN is built on quicksand. The planned IPO was canceled, but CEO Segev insists that he is sitting on a goldmine. "The Netflix story, the Amazon story — I think DAZN is going there as well." However, an adventure built on the quicksand of a magnificent burn rate will most likely not succeed.
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.