Content Crash — Part 4
Survival skills for the streaming wars.
Public Service Media (PSM) know that in order to stay relevant they have to master the new online and on-demand reality. But against the backdrop of the hyper-competitive streaming wars, it’s easy to get sucked in a race to the bottom or throw their hands up in the air before the race has even started. In this last chapter of the streaming wars, I take a look at some of the strategies and tactics that can keep PSM grounded and can help them to leverage the unique place they occupy in the media ecosystem and society. PSM should change their mode of thinking from survival of the fittest to survival of the most valuable.
It’s a dense read so here are some ways to make the most of it:
- Skim the headlines, pictures, and bold parts.
- Take your time. Read the paragraphs one by one and connect the dots.
- Go beyond the article with a deep dive into the links.
- Stop Thinking Linear.
It sounds obvious but it’s not. Public Broadcasters have a long linear tradition. For a long time, their own platforms were in the first-place catch-up services for their linear channels. Online was an after-though. What you would see first on TV was made available 7 to 30 days as a catch-up. But a true online video platform requires a fundamentally different way of thinking:
- A true destination with a distinctive value proposition rather than a catch-up window of linear channels. That means opening up to online first or online only propositions.
- Non-linear scheduling that takes into account new audience video consumption patterns.
- Curation that breaks open the channel mold and looks through new prisms to present content in topical collections for a myriad of newly defined audience segments.
- The audience at the core: In non-linear systems learning loops and interactions are crucial to getting closer to the audience. PSM have to harvest the data and feedback they receive from their users to serve them better and create more value and impact.
This requires not just a shift in thinking but a wholesale reorganization around new processes and principles. In the end, the true paradigm shift will not happen if broadcasters stop thinking linear but when audiences start seeing them as true digital destinations.
2. Be a Leader of Customer Intimacy
To succeed in the marketplace, PSM must embrace a competitive strategy. In their landmark book, The Discipline of Market Leaders (1997) authors Michael Treacy and Fred Wiersma describe three ways to gain a competitive advantage: operational excellence, customer intimacy, and product leadership. The main premise of the book is that you have to choose and excel in one of the three disciplines to achieve market leadership and perform to an acceptable level in the other two.
In the highly competitive market of VOD players, product leadership (premium content and world-class player) or operational excellence (superior supply chains, processes, and distribution) are critical to master but hard domains to gain a true advantage as PSM. I would argue that the real differentiator, in the end, will be customer intimacy: providing a unique range of services that feel more personal than what the competition offers and that fulfills differing needs in society.
PSM are uniquely positioned to lead on customer intimacy:
- They have strong trusted brands that have been and still are parts of many people’s lives and therefore have an opportunity to tap into stronger connections than new or more detached international brands.
- PSM have local roots and insights that gives them an advantage in establishing authentic and ongoing relations with the audience through services and content that matter. Defining, reflecting, and challenging the local reality is the opportunity space for PSM to be distinctive in the market. Not by being the biggest but by being the most relevant.
- PSM cannot trust their strong ties will remain forever. More than ever they need to think on how to connect/re-connect with the heart of their audiences — not just the minds.
3. Curate for Value & Purpose
More media on more platforms doesn’t necessarily lead to better media. There is more of everything but not necessarily a lot of it is rooted in value and purpose. In the end, it’s like adding sand to the desert, it might create impressive dunes but it’s hardly the kind of fertile soil societies need to connect and grow.
That disconnect between volume and value is an opportunity space for Public Service Media. While revenue and market share are important vectors, PSM can differentiate by working on a broader reach, impact, and investing in a diverse mix of genres to go beyond the obvious target groups and needs.
A few examples:
- Audiences are at the heart of everything the BBC does. In a digital space that also means understanding your audiences beyond traditional demographics. Research into human behaviour and psychology helps the BBC decide how best to serve its audiences in an ever-changing media landscape.
- Since 2018 the user interface of Dutch Public Broadcaster NPO’s premium VOD platform has a ribbon that recommends content with higher public value. The aim is to expose a broader range of content to users than they would see if relying only on standard personalized recommendations.
- Purpose and values are at the core of YLE’s new strategy: “For all of us, for each of us”. That purpose is also clearly spelled out: to increase understanding of each other and the world, and to strengthen Finnish society and culture, which helps YLE also to find a focus for their online destinations: ensuring reliable information and displaying an increasingly diverse image of Finland.
4. Balance Portfolio & Budget
One of the biggest challenges managing any VOD platform is balancing your catalog to optimize for audience demand and budget.
- To grow and attract audiences on-line platforms need high profile titles.
- To keep and retain audiences platforms need a broad and diverse portfolio of evergreens and engaging content.
But high profile titles have a high price tag. And a high volume of titles poses challenges of selection and discovery and comes at a higher technology cost. You see, it’s quite the math game.
PSM’s need to grow their intelligence in all aspects of building a balanced catalog. Understanding the demand for titles relative to other titles in function of the overall portfolio is very much a new field driving marketing decisions, licensing decisions, distribution partnerships, and aspects of recommendation.
This new intelligence should not be isolated in one part of the company but converge at the crossroad of audience insights, acquisitions, and commissioning, product development, data science, and marketing. It requires a system thinking approach that looks at all the leverages points in place:
- How can you optimize the inflow? In other words, balance out title costs vs title demand in function of growth and retention.
- How can you limit the outflow by adjusting the parameters? Making sure not to spread out or remove consumers’ favorite content by negotiating for optimized right windows.
- Change the size of the buffer. PSM have a wealth of archives that can significantly add value and volume.
5. Form a Team of Teams.
Given the sheer size and scale of the competition, it’s near impossible for any European broadcasters to go head to head with the big international VOD services alone. The cost of drama productions and premium content as well as the underlying technology costs need to be spread across markets.
European PSM, as part of the wider EBU alliance (European Broadcasting Union) need to consider more than ever opportunities for collaboration at every level: exchange of content catalogs, co-production of premium series, co-development of technology and joint approaches to prominence and discovery are just a few of the areas. This is not always easy given the different sizes, markets, and expectations but when the house is on fire you need to work together to save it.
- European PSM are investing a lot in strong local content. However little of that content travels beyond the national boundaries. Moreover, many broadcasters still see co-production as a risk since that comes with additional overhead and some fear it dilutes the national characteristics of a program.
- In comparison, Netflix titles are on average available in 6.2 countries in Europe, a consequence of Netflix’s deliberate strategy of acquiring pan-European rights.*
- Netflix also tackles the issue of localization in production heads-on. In September 2019 Netflix debuted Criminal an original series that has episodes for France, Spain, Uk, and Germany. Authentic content with country-specific plotlines and native actors for each episode. But every episode was shot in the same set in Spain, which gave Netflix some great economies of scale.
Collaborations can go well beyond the title level. In more and more European countries PSM are exploring how they can combine and strengthen the local offer by collaborating with commercial media on a joint premium offer. Salto and BritBox are some of the early examples but plans in other markets are in full development.
On the product and technology level, the complexity of collaboration can be overwhelming but if you start stripping OVP players down to components it becomes clear there are only so many ways to put them together. It just doesn’t make sense to reinvent the wheel in every market at a great cost. EBU’s Peach (personalization) and Flow (multi-CDN) programs are clear examples of joining forces in this area.
6. Nurture & Accelerate Talent
Some of the most valuable assets a company can have are talent and ideas. These are hard to copy and require a serious effort for any company. In the battle for talent, PSM don’t necessarily have to strive to be the endpoint but rather the starting point for talent. With proximity to education and the local market, they are better placed than anyone to build a brand image that attracts raw talent and is seen as a place that is open, nurturing, and empowering. A place for experimentation and growth where diverse voices and imperfect characters are cherished.
Talent attracts other talent. A fertile ground for young and starting creatives, producers as well as designers and engineers will gain a reputation that will also bring in more seasoned talent. In the end, positive network effects are more effective than handing out big amounts of cash.
7. Grow your relations along the local value chain
In the heyday of public broadcasting, PSM would have perfect vertical integration, that is, they would control the whole value process from the raw material (ideas) to the design and production of content to the distribution on own and operated channels. Nowadays the value chain has been broken apart and important pieces of it have become out of reach.
A lot of the power has shifted to the big platforms as we have seen before. But disruptive new value chain players also appear locally. For PSM it’s therefore important to make a shift from a command and control approach to resources to one where they become a central node in the new media ecosystem: that means growing relations and interactions across the value chain.
The Flemish Public Broadcaster’s VRT Sandbox Hub is a great example of this. Rather than trying to control all aspects of production VRT has created a hub that allows start-ups to test their new technologies within the context of VRT, adding speed and innovation to VRT while empowering the ecosystem. An international Sandbox Hub is replicating this flywheel model now across Europe.
8. Use a double-edged sword to fight for prominence
Last but certainly not least. Content in your catalog is only valuable if users can find it. That means hard work on consistent and detailed metadata, recommendations, and features like sign-in that allow personalization.
But even if you do all that you might stay invisible to the audience. Because in a world of set-top boxes, connected devices, and online discovery a whole series of gatekeepers have come between broadcasters and consumers.
That new battle for prominence in the crowded digital market space demands a singular focus across many departments: marketing, legal, editorial, business, technology. In that battle, a double-edged sword is recommended:
- Negotiating prominence, attribution, and findability through partnerships and dialogue with platforms, manufacturers, and telcos.
- Making the case for a new framework of legislation and regulation that ensures viewers can continue to access and find PSM’s linear and on-demand services across a range of connected devices and online services.
And maybe one last consideration in this field: Marketing and branding are more important than ever to stand out in the dense digital media space: PSM have a unique range of owned and established media channels (TV, Radio, Web, Social) and strong brands. They should not hesitate to use that leverage to give extra exposure to their new destinations.
This is the last chapter in the series of the streaming wars. Do check out the previous chapters if you have not done so:
Part 1: Are we heading for a content crash?
Part 2: Strategies and logistics that will win the streaming wars?
Part 3: The winners and the losers of the streaming wars.
Feel free to reach out to me for more information or speaking engagements: eeman@ebu.ch
