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Under the impetus of Netflix, television production is currently a sellers' market. That's why some traditional TV companies are making more and more movies and TV shows for their rivals. The main challenge for these companies is to evaluate the benefits of short-term revenue gains over the creation of products that create a direct, long-term relationship with customers.
Netflix alone has spent $ 13 billion in content money in 2018 – and that number will continue to grow as Netflix seeks to replace the licensed programming lost by more original and exclusive productions. Beyond Netflix, Hulu has spent $ 2.5 billion in content, a figure that will grow as the company releases more than 40 original movies and TV shows in 2019. Disney, which now fully controls Hulu and will launch Disney + later this fall, also said He plans to increase Hulu's original content budget, while purchasing the original third-party content for Disney +. This does not even include other streaming services at the WarnerMedia and NBCUniversal Horizon.
With the sums invested in original productions, it is difficult for a media company to go completely. As one senior TV license and distribution official recently said, "You want to absorb some of that money."
This is one of the main reasons why Viacom, for example, has created studio divisions within some of its key program brands, including MTV, Nickelodeon, and Comedy Central. Viacom also owns Awesomeness, which is located under its Viacom Digital Studios division and has sold movies and TV shows to Netflix and Hulu. And that does not even include the former Viacom television production company, Paramount Television, which could bring up to $ 600 million to the company in 2019 and that has sold shows such as " Jack Ryan "at Amazon and" The Haunting of Hill House "at Netflix. Overall, Viacom believes that its various studio companies can earn over a billion dollars, while the company continues to increase its productions for external buyers, said a source.
At the same time, CBS, Viacom's sister company owned by the Redstone media empire, is also striving to provide programs to compete with traditional video and streaming networks. According to the Wall Street Journal, about a quarter of the programming produced by CBS Television Studios this year is for other platforms, including Netflix ("Dead to Me") and Disney + ("Newspaper"). female president ").
Currently, companies doing business with competitors are not new to the television industry: TV studios often sell to the best buyer possible, even if that buyer competes directly with the twin network. or the streaming platform of a studio. For example, Warner Bros. is the studio behind "The Big Bang Theory", which has just completed its 12 season season and is a major success for CBS.
What is different now is that some of CBS's rivals, including Disney and WarnerMedia, are increasingly focusing on having their studio badets produce content for their own platforms in relation to third parties.
According to Chris Erwin, co-founder of the entertainment company Doing Work As, it is important for companies not to make unenthusiastic attempts for video streaming. "Studios and networks will be more than happy to sell to the growing universe of content buyers," Erwin said. "But if it means that money is now entering the door, it also means that many institutional resources will meet short-sighted business objectives without preparing teams or the company for what makes them more viable. for the future. "
According to some insiders in the television industry, this does not necessarily have to be one or the other. Viacom, for example, can earn money by selling movies based on popular intellectual properties such as "Rocko's Modern Life" and "Invader Zim" to Netflix. but if people want more from Rocko or Zim, they'll have to subscribe to Viacom's new Nick Hits subscription service, which is $ 8 a month on Amazon Prime Video and Apple TV. Anyone who watches "Invader Zim" on Netflix will not subscribe to Nick's subscription service, but some might – and this is the calculated bet that Viacom is doing here. As one source reports, this allows Viacom to get the "good heroine price" of money spent by Netflix and others, while seeking to establish a long-term relationship with fans. And Viacom has had some success on this front: its Noggin subscription service has 2.5 million subscribers worldwide, the company said.
As we have amply discussed at Digiday, the proper management of intellectual property is an essential – and perhaps even existential – issue for the entertainment industry, which faces a television landscape controlled by a handful of giants. . But do not forget either that even with the tremendous advantage enjoyed by Netflix, Disney's fabulous IP factories and vertically integrated giants like AT & T and Comcast that spend a lot on content, we still do not know. not what TV and streaming video looks like in five countries. years, which is a reasonable argument for making as many smart bets as you can right now.
Confessional
"A general thing that happens in this industry is that you have people who have worked for companies going bankrupt and then have big jobs elsewhere – it's rampant throughout the industry." – A longtime leader in digital publishing and television
The numbers do not lie
60%: Percentage of ESPN's "SportsCenter" audience on Snapchat that tunes in three or more times a week.
33: Number of original series (11) and films (22) that Netflix has produced for India – a key and challenging market for the streaming giant.
2 millions: Number of live TV subscribers for Hulu, according to new estimates from eMarketer.
What we covered
IGTV goes to 90:
- IGTV added support for horizontal videos, which appeared after Instagram continued to receive requests for this feature from creators and other video makers.
- What the creators want more, however, is an advertising product from which they can earn money. Instagram has no significant update on when a monetization product will be released.
Learn more about IGTV here.
BuzzFeed brings its advertising and business strategy to the UK:
- BuzzFeed creates more local content and commerce advertising partnerships in the UK.
- Mark Rogers, a former Dow Jones executive, was hired as the first general manager of BuzzFeed in the UK.
Learn more about BuzzFeed projects in the UK here.
What we read
Why YouTube is changing the way it counts subscribers: Over the next three months, YouTube will only show rounded numbers instead of the actual number of subscribers. The reason? YouTube said that it was essential to ensure the consistency of its display of the number of subscribers on its platform. It is also likely that YouTube will discourage the competitiveness of creators and fans who are obsessed with the number of followers of a given channel.
What to expect from Hulu under Disney's control: Disney + is a top priority for the Mouse House, but does not ignore the fact that it now has a large streaming service entirely under its control. Disney has announced plans to fund more original content for Hulu and to find a way to collaborate with other parts of the company, such as the recently acquired Fox studio and FX badets, as well as the company 's. international expansion.
The creators of 'Black Mirror' talk about making an interactive movie: Bandersnatch's production took nearly two years to Netflix and the Black Mirror team. Interactive programming on Netflix is a promising idea, although I am skeptical about the degree of interactive programming that Netflix can deploy. Everyone has tried "Bandersnatch", but I have not heard much about the interactive documentary Bear Grylls. That said, the Black Mirror team said it would do it again.
Disney + will not be a killer of Netflix: Repeat after me: Disney + will not be a killer of Netflix. Both products can – and probably will be – complementary.
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