This week: Tubi launches in the UK; Netflix and Amazon dominate SVOD commissioning; streaming merger chatter
Thanks to the power of LinkedIn, there are many more subscribers this week, so welcome to you! I thought I’d explain a bit more why I started this newsletter and what the point of it is, considering how much email clutter we all have already.
When I stepped out of working for larger companies and began consulting around 10 years ago, it became clear that a not-much-talked-about benefit of being employed by a big organisation is the wealth of market intelligence you get access to. Not only are there dedicated teams who conduct research and commission insights into the market and audience behaviours, you also get access to a whole raft of expert colleagues who really know their stuff. And perhaps most importantly, you are actively encouraged to explore the market and future trends by the organisation’s leadership.
Over my time working with smaller companies, start-ups and agencies, it is increasingly clear how significant the gap is between the big beasts and smaller entities, both in terms of access to insights and expertise, as well as frankly having enough hours in the day to find time to engage with thinking about the future.
So this newsletter is intended to help people who are in smaller companies: primarily TV and film production, but also digital content businesses, publishers, arts orgs as well as freelancers. The idea is to help you shortcut your way to insights and information about what is happening to our highly disrupted media industry.
I’m also massively conscious there is an internet full of information out there, so there is no point trying to duplicate what is already so well served. Instead, I cherrypick what I feel (perhaps wrongly!) is information that has strategic significance in the short to medium term, and which could have an impact on your decision making if not now, then perhaps in the next few years.
I’m on X/Twitter if you fancy or email hello@businessoftv.com even just to say hi or tell me what you think would be helpful.
New culture secretary incoming
There is obviously an acre of coverage on the election, but while we wait for who will be the new culture secretary, this Screen Daily piece is worth a read. They’ve been asking key figures in the TV and film industry what they’d like to see from the new government, and includes a great line from Anna Higgs, MD Casarotto Ramsay & Associates that “tax credits come and go and, like surfers, inward investment moves wherever the breaks are biggest.”
Tubi Launches in the UK
Free ad-supported streamer Tubi has launched in the UK this week. This is important for three reasons: firstly because the service has really grown an audience in the US to the point that they are now equal in terms of share with Disney+, and beating Paramount+, Max and Peacock; secondly, they have been commissioning content such as getting on board with the Freemantle series Big Mood starring Nicola Coughlan and thirdly, they are owned by Fox (who bought them for $440m in 2020).
I wrote a few months ago about how and why Tubi has done so well in the US (TLDR - it is free and has targeted specific fandoms or audiences who are less catered for by larger mainstream services). As David Salmon, EVP of Tubi International said about the UK launch, users will “…find the weird, the wonderful, the brilliant, the unique, and there are going to be some segments that you just can’t find in what typically does tend to be this very, very busy middle, which is typically super-served by SVOD services.”
The UK streaming market however is very different to the US. In the US, paid subscriptions became the dominant model first, and free streaming with ads came later - of which Tubi is the market leader (excluding YouTube). In contrast, in the UK it was the other way round: here audiences have been well accustomed to comprehensive free streaming services from the broadcasters for nearly 20 years now. Although some subscription services were launched in the naughties and early 2010s, most were fairly niche offerings for non-mainstream sports like sailing or cycling, or brands like Curzon cinema (first launched their home cinema offering in 2010). It was only when Netflix came along that having a subscription streaming service became a common thing for many people (and yes, for simplicity’s sake I’m ignoring the myriad of other services with archive VOD content that have launched over the years such as Sky, Homechoice, Flextech and the like).
A quick look at Tubi UK’s offering suggests it is a smaller proposition at launch in comparison to the US service. The US has a huge catalogue of 200,000+ movies and TV episodes, plus has around 250 channels including live broadcast channels such as Fox, NBC and USA Today as well as FAST channels (Free Ad Supported TV channels) built around talent, shows or themes such as Gordon Ramsay, Jamie Oliver, Baywatch or The Masked Singer.
For the UK, there are 20,000 titles, in comparison, All4 (which in 2022 was the biggest free streaming service in the UK) has 14,500 hours of content available.
And interestingly, the above channels section is missing at launch.
Below you can see the US service’s navigation in comparison - live TV is where the 250 channels are found, and this is absent in the UK’s service.
They do have an exclusive content deal with Vice (for originals such as ‘Cult of Elon’), and there is a slate of originals due over the next few years.
So as Tubi UK won’t have the distinctiveness of being free as it has in the US and it is much more challenging to grow a free ad-supported streaming service in the hyper competitive UK market where broadcasters already dominate with high quality content across both catch up, archive and live TV.
It will be interesting to see how their fandom strategy plus originals helps build an audience.
Netflix and Amazon dominate SVOD commissioning
In Q1, 2024, Netflix and Amazon saw a big uptick in their commissions, and are now 53% of all global commissions as reported by Ampere Analysis. So while these two SVOD players have seen a resurgence in their commissions, it is also a real comment on the decline in SVOD commissioning particularly by WBD and to a lesser extent Disney+.
In addition, Netflix and Amazon ordered more content from outside the US. For Netflix, commissions from Western Europe (so UK, Spain and Germany) nearly matched those from North America. Also notable is Amazon increasing its orders from India - 37 titles, which is more than the previous six quarters combined.
Ampere Analysis’ report into Netflix and Amazon’s originals dominance
Hollywood Reporter on Netflix and Amazon’s Q1 originals commissioning
Max and Paramount+ merger noise
Mergers and consolidation are much talked about for streaming services as in simple terms, many are costing too much to run, don’t get enough eyeballs, and aren’t making enough revenue either via subscription and/or advertising. When you add in the enormous technological advantage of Netflix and YouTube, plus Amazon (and others) moving into advertising, it is hard to see how these platforms can remain as standalone offerings without some level of merging to try to build economies of scale.
This Variety article suggests WBD’s Max and Paramount+ are again exploring a marriage, and outlines Paramount’s view on the two options for streaming partnerships (quoting joint CEO Chris McCarthy at a June 25th employee town hall meeting). Option one is to:
“…enter a deep, long-term relationship with a leading technology platform, which already has the full scale that we are trying to obtain. But what they don’t have is our scale of content and together we will make for a very powerful combination to drive more minutes and greater profits.”
He went on to say the second type of partnership:
“…involves us joining forces with one or more other SVOD players… The sheer volume of hit content that we could offer together would be tremendous across TV, film and sports and would attract millions of viewers. Plus, we would share in all other non-content expenses.”
Max has about 100 million global subscribers and Paramount+ has 71 million subscribers.
This is a watch this space to see how these conversations develop.
Another kids & YouTube juggernaut report
Anyone working in kids knows there is a long established behaviour of children watching YouTube then buying something (or more likely, adding it to a basket for parents to buy). It is basically the modern version of browsing through a catalogue and circling what you want with a pen. A report this week from Precise TV reinforces the dominance of You Tube with kids as a platform (as well as what this means for their lifelong media and purchasing habits).