The pandemic has caused major disruptions in the media industry. Omdia's Rua Ageta and Arrow Media's Anna Davies look at key trends emerging.
Content Consolidation and Branding
The big studios and owners of intellectual property were already starting to consolidate their content, but the pandemic rapidly accelerated that trend. IP-owners are pulling their content off third-party suppliers and reserving it for their own direct-to-consumer streaming services.
The biggest victim was sports content. For terrestrials and satellite subscription channels who rely on sport as their main cash-cow, revenues showed a sharp decrease. Before Covid, the streamers were aggressively competing with the TV channels, buying up sports rights as viewers continued to migrate away from subscription channels to streaming platforms.
Then came Covid-19, decimating sports production and live sports broadcasts. Major events were cancelled, and commercial channels saw advertising revenues plummet.
Consolidation of Owned IP
As traditional broadcasters lost their main cash-cow generators - sports - attention was focused onto non-sports content with laser-like urgency. The immediate reaction was for IP-owners to take back their stuff. Sky UK lost its Disney channels as that content moved back to the Mouse House’s new streamer, Disney+. WarnerMedia took back Friends for its own streamer HBO Max, and Peacock acquired the US version of The Office from IP owner NBCUniversal, in a deal valued at around $500m. (Both shows had previously been on Netflix in the USA.) “Content producers will find increased value in their IP and new ‘fresh’ ideas will be harder to develop,” says Rua Aguete, senior research director for TV, video & advertising at Omdia.
“Expect a wave of consolidation as ownership of key franchise properties becomes strategically important.”
Defining the brand
Pay TV, already in decline in many markets, saw major losses during the pandemic. Customers have been cutting their subscriptions due to loss of income, but there has also been a shift in strategy from channel operators in terms of content they own.
“Content owners will see an increased focus on a smaller number of ‘brands’,” says Rua Aguete, adding that the importance of channel brands is decreasing “in favour of new thematic groupings.”
This shift underlines the ever-increasing importance of owning IP in order to return margins across a range of monetisation verticals.
“Co-producers and commissioners should reassess brand strategies and rights, consolidate from legacy channel brands to consumer-friendly content brands, with options including the subdivision of generic brands into “multiple thematic” brands. Work to use these brands across merchandise and non-video entertainment to reinforce consumer messaging.” Rua Aguete, senior research director for TV, video & advertising, Omdia.
Content is the brand
“For IP owners that provide a range of consumer facing services such as channel and OTT (over-the-top) platforms, the next few years will involve focusing on maximising returns on a core set of high-value IP,” says Rua Aguete.
“OTT delivery has allowed content owners to bypass typical channel structures and deliver larger libraries, but it has also reduced the role of the channel brand. As a result, the brand of the content has become more important.”
Existing powerful brands such as Disney, Marvel, the Star Wars franchises or the CBS Star Trek shows offer content that can cut through the noise of competing titles.
“To build a powerful brand, the content must be compelling and the message to consumers must be reinforced at multiple points of contact.
"Brands that can be deployed (rather than just marketed) in multiple consumer verticals, including toys, games, clothing, theme-parks, and packaged goods, will be an incredibly efficient tool in the post channel era. Large groups will look to develop core brands to carry content, replacing legacy channel brands.”
Streamers have, by and large, been among those to have benefitted from locked down viewers, with SVOD (subscription-view-on-demand) numbers ticking up and AVOD (advertsing-view-on-demand) viewing soaring.
But for more mature markets, there “have been signs that SVOD providers have exhausted the low-hanging fruit in their mature markets,” says Rua Aguete.
“In recent years, significant subscriber growth has only occurred when services have been further integrated with major pay TV, such as the 2019 Sky and Netflix deal,” she adds, while the value of the channel is also “eroding”.
“Therefore, to build a compelling media package, a service provider will combine SVOD content with content offered by channels to form a single consumer friendly package,” Rua Aguete says.
This will likely mean the major SVOD services being bundled alongside linear channels, rather than sold standalone.
“Another feature that will enhance this trend will be a single search function that combines the libraries of each service agnostically as part of the front-end interface.”
With new streaming services seemingly launching every month, the way content is being delivered to audiences is changing, and because these platforms need to drive subscriptions, the original content they commission needs to be jaw-droppingly ambitious and zeitgeist-generating.
And that’s filtering through to how the linear channels greenlight ideas, too. "Whether it’s the US cable networks launching their own premium streaming services, the BBC putting their commissioning decisions through the filter of how a show will work on iPlayer," says Anna Davies, executive producer, development, at UK-based factual producer Arrow Media, "An appetite across the board for eventised, attention-grabbing ideas, the message is: what’s the next show where everyone is having the “have you watched X yet?” conversation?"
Know your networks
"Gone are the days of pitching the same idea in exactly the same format to multiple broadcasters. Whether linear or streamer, every network nowadays has very different, very defined needs. They know who their audience is, down to the style of plaid shirt they wear or the mood they’re in on a Tuesday night after wrangling kids all day. It means being smarter than ever about tailoring pitches to the channel you’re targeting." Anna Davies, exec producer, Arrow Media
Because of the ever-increasing competition for eyeballs in a world where viewers have endless choice, celebrity has become an ever more powerful currency. Whether it’s behind-the-scenes access for a celebrity follow-doc, exclusive interviews and unseen archive that deliver a revelatory documentary portrait of a household name, or A-list talent hosting a show, these are programmes that effectively market themselves.
Undoubtedly, archive was the first word on every development team’s lips once filming got shut down due to Covid. But using archive to tell gripping narratives, not just as cutaways, has been a growing trend for a while now. Series like The Last Dance show how archive can be as immersive as scripted drama. In our latest two-hour special for ID, O.J. And Nicole: An American Tragedy, playing the home-movie footage long, brought Nicole into the frame in a way that hasn’t been done before.
This trend is definitely a product of the pandemic – the audience’s desire to leave behind the unrelenting grimness of the 2020 news cycle and go somewhere funny, fun, comforting, or outlandish… even if it’s just for an hour or two. No doubt Tiger King would have been a hit in any year, but somehow it was the medicine everyone needed in the depths of lockdown. And instant hits like HGTV’s Renovation Island or Netflix’s Selling Sunset, or the mega ratings enjoyed by the new season of Bake Off on Channel 4, show that finding new vehicles to carry us away are a winning formula.
With the ambition factor rising on the one hand (the high bar set by the streamers), and budgets being squeezed due to Covid, on the other, there has never been more of an appetite for finding creative financing partnerships. This is being driven as much by the broadcasters as production companies – meaning there’s a growing openness and flexibility when it comes to the editorial.
It all adds up to an exciting picture for factual – a trajectory firmly set on delivering content that’s bigger and bolder than ever before. After the year we’ve all had, that’s remarkable. But if lockdown has taught us one thing, it’s that audiences need amazing stories, to entertain them or help them make sense of the world.
by Richard Middleton and Maria Rua Agate Arrow Media’s Anna Davies talks 2020’s key factual trends
by Anna Davies