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.
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.
Taco began his career on the content-production side, at SBS, before transitioning to public broadcasting in 2009, where he led KRO. After overseeing the merger with NCRV in 2014, Taco became CEO of IDTV (part of All3media) in 2017. At IDTV, he formed a creative team that developed the hit show De Verraders. From 2021 to 2024, he led All3media’s companies in the Netherlands, Belgium, and Germany. Taco also earned his PhD in 2014, showcasing his dedication to learning and expertise.
Oege Boonstra, partner at 3Rivers, says: “We are thrilled to welcome Taco to our team. His deep expertise in both the creative and operational aspects of the media industry, combined with his strategic insight, will be invaluable to our clients. His experience in media management and talent development aligns perfectly with our mission to drive success for media companies.”
Taco Rijssemus on his new role: “I’m excited to join 3Rivers and collaborate with such a skilled team. The media landscape is constantly evolving, and I look forward to applying my experience to help our clients navigate these changes and achieve meaningful results.”
The streaming market is gradually becoming mature. There will still be significant growth, but the tumultuous numbers from the early phase are now behind us. The number of new entrants of any significant size is also drying up, so we can gradually begin to take stock: which companies will survive, which will fail, and what new developments can we still expect?
Let's start with the latter. A few years ago, it seemed that local players could only compete with the big American Tech competitors by working together intensively. In hindsight, this has not materialized at all. Initiatives like the French Salto went under, Britbox eventually became a ‘BBC only’ endeavor (ITV sold its share), we hear little about the Flemish Streamz, and NLZiet in the Netherlands is now cleverly positioned as an alternative to cable, while NPO and RTL are building their own streaming platforms.
Most broadcasters have now realized the critical importance of their brand and are eager to add a +, Play, or MAX behind their names to establish their presence in the digital world. By using the content budget both analog and digital and coming up with smart combinations, they are able to create a new future. With good technology now widely available and no longer a significant barrier, there is no doubt that local broadcasters take charge of their own digital future to survive. The latest in that lineup is Channel 5 in the United Kingdom, which is going to exploit all digital activities under one brand name, 5.
Moreover, the major international media players face significant challenges in keeping their traditional businesses afloat. The write-offs that Paramount and Warner Discovery (WBD) have taken in recent months (each amounting to nearly ten billion dollars!) speak volumes. The traditional business is increasingly under pressure, and investors see that too. For instance, WBD’s stock received a downgrade from Standard & Poor's (to negative). That must cause a lot of pain in the boardrooms.
What does all this mean for the streaming market? First of all, it means that many more local brands will survive than previously thought. All traditional broadcasters are rapidly transforming into digital media companies because they know that otherwise their days are numbered. While the number of local players increases, the number of international players will, however, shrink. The large American media companies are under immense pressure and can no longer afford the investments needed to build international streaming services.
Who will be left standing? Netflix, of course, which systematically expands its first-mover advantage. Prime Video, backed by Amazon's commercial engine. Disney, naturally, with its broad portfolio, will survive despite the painful managerial road it has traveled. And the aforementioned WBD, which continues to invest heavily in (HBO)MAX. Finally, DAZN, though it is still burning through cash. With Apple, you never know. But the other international players are not going to make it. That is certainly something few could have predicted three years ago...