This month’s highlights for less reported stories includes Armageddon predictions for legacy US media companies, good news for television show participants, and a wake-up call for corruption in the UK (perhaps).
News from media, comms, and business – it’s the February edition of the BHC Bulletin.
It is all doom and gloom in the streaming world.
Streaming costs – it costs in content, it costs in distribution and it costs in marketing. It also generates less than the traditional advertiser funded model of linear broadcasting (on a territory by territory basis). The whole industry understands this – but has been pushing against the laws of economics for too long!
In a research document by boutique media analysts MoffettNathanson they warn that “that after years of effectively printing money with traditional services, a pivot to streaming to follow Netflix will lead many players to face the reality that they can no longer afford to chase profits that do not exist”.
I’m going to quote directly from RapidTV News here:
“Rather than being the new sliced bread, MoffettNathanson insists investors and media company executives have accepted that streaming is, in fact, not a good business, at least not compared with what came before.”
“The study, US Media: Hurtling Towards Act 3, shows that in its third stage of evolution the streaming market can now be seen as one where even though subscribers have shown up en masse, profits have remained elusive and cashflows are for media firms, said the analyst bluntly, “sorry ghosts of their former selves” and where balance sheets are loaded with debt in a higher interest rate environment.”
The report continues “great companies will have to face the reality that they can no longer afford to light money on fire chasing profits that do not exist. For some this simply means a new age of rationalisation. For others, acquisition may prove the only salvation. For all, the present state of affairs cannot continue.”
James Dolan, interim executive chairman of AMC Networks is quoted in the report. He says, “It was our belief that cord-cutting (that’s subscribers dropping services from cable or satellite operators) losses would be offset by gains in streaming. This has not been the case. We are primarily a content company and the mechanisms for the monetisation of content are in disarray.”
At BHC we think it’s highly likely there will be consolidation in the streaming marketplace. In the US every broadcaster and some prod-cos brought out their own Player. Many won’t last much longer. The question is when will Apple or Amazon gobble up the key brand players…..and that includes even Netflix which BHC would venture will have a new corporate home in the next few years.
In Europe it’s a similar picture with Screen Daily reporting that the French joint venture, Salto is on the verge of closure. (And since writing -= has now been confirmed will close)
Salto was previously owned by a trio of France’s biggest broadcasters – France Télévisions, TF1 and M6. (TF1 and M6 exited last year when their merger collapsed). Salto had 800k of subscribers – so hardly small scale.
And in the UK it’s clear that the ITVX streaming platform is the latest push to show how digital PSB player ITV has become. But the question will be that by increasing digital revenue, can it offset the decline in linear spend?
Media and care of contestants – calling interested psychologists.
Some UK media companies have come in for criticism over the years for their perceived lack of duty of care, so positive news, is that ITV and the BBC have partnered to expand the pool of registered psychologists with experience of working in television.
The two businesses are developing a continuing professional development programme that has been accredited by the British Psychological Society.
The programme is aiming to introduce more psychologists to the challenges and stresses of media production so they can support ITV and BBC programmes in their duty of care towards contributors.
David Osborn, Chief People Officer at ITV, said: “Whether it’s those behind the screen or in front of it, people are at the core of ITV and making sure that our people are properly looked after is something we’re committed to doing.”
Simon Adair, Director of Safety, Security & Resilience, BBC, commented: “As a responsible broadcaster, ensuring the health, safety and wellbeing of the contributors to our programmes is of the utmost importance. I’m confident this partnership will strengthen our whole industry by increasing the pool of expert psychologists available to us, ultimately enhancing our ability to protect and support those taking part in productions.”
Corruption Index isn’t kind to the UK.
I’m finishing on a story that’s not media or comms related but, I find it worrying that the UK has slipped to 18th place in the global corruption index.
Sky News reported, “The UK has fallen down the global Corruption Perceptions Index (CPI) to its lowest ever score as a report warned “slipping standards are being noticed on the world stage”.
The UK joins a less than stellar cast of only five countries seeing their year-on-year scores drop by five or more points: Qatar, Myanmar, Azerbaijan and Oman. Not necessarily a list you would want to be associated with.
The CPI is compiled by Transparency International which uses impartial surveys from experts and business leaders to rank countries by the perceived level of corruption in their public sectors.
Chief executive Daniel Bruce is quoted as saying the drop in UK standing is a “powerful indictment of a recent decline in standards in government…experts are concerned about insufficient controls on the abuse of public office and increasingly view corruption and bribery as a real issue in Britain. This is the strongest signal yet that slipping standards are being noticed on the world stage.”
The Sky News report goes on “The UK now ranks 18th alongside Belgium and Japan and behind Uruguay, Iceland and Estonia.
Denmark tops the index, while South Sudan, Syria and Somalia, remain at the bottom”.
Reputation is hugely important at every level – BHC works hard with clients to ensure a strong reputation for individuals as well as companies. It’s an old, but very true saying, that reputation takes years to build and minutes to lose.
Perhaps in a social media, always on environment – that minutes to lose, could become seconds.
I don’t usually end on a downer – but the fall in the UK reputation rating is something everyone should be concerned about.