How to disrupt European TV market

Today I will tell you how to disrupt TV market. All the key components are already there, both from product and from technology side. All that is needed is the will and guts to do the investment. And no — Netflix has not yet disrupted TV.

Every European country has at least two-three national, state sponsored TV channels. Some less, some more. Then there are fully private channels that are transmitting for the whole country. And then there are more local city based channels, often cable-only. And of course pure cable-channels, most likely syndicated across borders, with headquarters in United States.

Each of those channels are producing lots of content. Local and national news. State procured shows about economics, education, environment, culture. Local & national sports competitions. And political shows.

And of course, plenty of small and big TV series. From detectives to romantic sitcoms, from sci-fi thrillers to political dramas — all spectrum of possible entertainment. In Italian, German, French, Spanish, Polish, Swedish, Latvian or Serbian. You name it and it has some series that are enjoying already 9th season.

All this plenty is not directly challenged by Netflix or HBO. While they are competing for viewers attention, they are not offering anything to match many of the content segments that those national channels offer.

Besides purely national channels, there are also companies that work in multiple markets. Competing effectively with the better content deals they can negotiate, make their own production, as well as lower overhead with costs shared between markets and channels. RTL Group, Bonnier AB, MTG Group, ProSiebenSat.1 Media and others.

I will take MTG Group as an example, as I know it well, being consumer of it’s Baltic market products for many years. Overall it is working in eight European countries. It is very strong in sports content syndication, global movie syndication as well as content delivery technologies like Viasat and Viaplay. It is also competing very well in the segment of national news and production of local shows. It is thus very well suited for European level disruption.

So, Netflix has plenty of TV shows. Some of them are best in the world. And you can watch them at your leisure, delivered very effectively. HBO has the same, only different category of best in class shows. And less markets served.

National TV has news, national shows, state sponsored content, and general local language contant, that Netflix does not have. Netflix has scale and blockbusters while national linear TV has local news and local touch.

MTG has a chance to disrupt this by aggressively rolling out service that would bet on this discrepancy. Service that would bundle both local linear news and non-linear TV shows. New service (call it an ‘app’) should have several key functions:

  • Ability to watch local news, as well as news of any other served country. No geographical restrictions, while default source is closest.
  • Possibility to show breaking news in the corner or lower side of the screen, while user watches non-linear content (TV shows). Could also just auto-pause the show and turn on the news, based on settings set by the user.
  • Curated semi-linear evening program customized for each user. You turn on the app and it offers to you your evening entertainment, including news, local content and syndicated shows. For example: 7:00 new Game of Thrones episode, 8:00 football game, 9:00 news, 10:00 political talk show. It can also be built taking into account tastes of all the family and several choices can be offered.
  • Provide classic weekend morning service, with cartoons occupying 70% of the screen, with other space left for the news-roll.
  • Companion app for all the sports content to see live player stats and historical numbers. Data is all there, it just needs to be presented.

Besides new functions, it is important to think about syndicated content. MTG probably can not afford to film its own Game of Cards, but it can very well afford to dub various European shows. German shows for Latvians, French shows to Croatians, Swedish shows to Spaniards, etc. And if can not do full dub, you can always subtitle. It is relatively cheap way how to provide tremendous amount of content.

All this can work with ad support. MTG group has very well established ad sales network, and it can continue to use that for revenue generation. It will bring no extra discomfort for viewers using semi-linear mode or when watching live news or sports events. Of course, some sort of ad-free premium access can also be offered. At least for non-live part of the content.

Also, ads could be served nicely even for very niche markets. For example, if Estonian living in Portugal would watch Estonian news, he would get Portuguese ads. And the same for hockey fan from Greece watching Swedish Elitserien game — he would see local Greek ads in the breaks. Win-win.

With such strategy it must be possible to conquer all European markets at the same time. And as it is all digitally distributed, it might be possible to avoid local regulation. No content or language quotas, no mandatory content, nothing. Of course, it is good to comply with local laws regarding ad restrictions and VAT. But just to be on the same level as various internet portals. No more regulation than for youtube.

Of course, local content is king. Such disruption really needs local news and local content for it to work. While there might be smaller, non-national, news providers willing to syndicate their stream, it might be tricky to acquire quality content.

But no fear, European legislators to the rescue — they are planning to introduce legislation that would ban geo blocking of content within European Union. That will in turn mean, that smaller national TV channels might have to purchase rights for the whole union, not only for single country, as they will not be able to block any viewing from other countries anymore. Especially if they are delivering the content via the internet in any way.

This pressure on local players might make them more agreeable when it comes to sharing their local content with transnational players like MTG. Sharing or exchanging for content, licensed for all union member states.

This post is part of the series that could be titled ‘What would I do, if I would be in charge of product strategy of company X’:

  1. How to fix Foursquare. My take on product.
  2. How to disrupt European TV market.

p.s. full disclosure — I work for Tele2, sister company of MTG.

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