Pivot: If big tech companies change their strategies, how does that affect TV producers?
Plus Tubi partners with creators, UK commercial broadcasters unite to grab more ad money, Netflix launches TV channels in France.
This week, I’ve written about one of those characteristics of the internet that is well known and familiar to those working in this field but isn’t immediately obvious to those who don’t. That is, the concept of a pivot, and how it can have quite devastating effects, especially on those in the orbit of the company that’s taken this decision.
To illustrate what a pivot can involve, I’ve covers a whole host of issues that are live at the moment: how AI search is killing web traffic, what will the outcome of those antitrust trials be for Google, will they result in Apple losing a significant chunk of its income (and if that happens, what - if anything - is the consequence for the Apple TV+ original programming spend?), how profitable is YouTube…
Separately, I’ve also covered Tubi’s creator strategy, and how they continue to be one of the most interesting streamers out there. Plus Netflix’s ongoing partnership with TV broadcaster TF1 in France (and will what works there be rolled out elsewhere). And finally, a smart move by Channel 4, Sky and ITV to create a premium video ad marketplace with Comcast, with the potential to grab more of the digital advertising spend that previously wouldn’t consider TV spots.
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Pivot: If big tech companies change their strategies, how does that affect TV producers?
You might have heard of a pivot before - it is when a company makes a significant strategic change in direction, because whatever they were doing wasn’t working or had some sort of significant blocker to achieving scale or generating revenues. Despite being a comedy, HBO’s Silicon Valley often doubles as a great educational resource:
There are lots of instances of tech company pivots. For example here are the original strategies of a couple of well known companies:
YouTube originally was to be a dating website where people could upload a video to say hi to potential matches
Airbnb was launched as a blow-up mattress renting business for people attending conferences (the name covering air beds as well as bed and breakfast).
For content businesses, you might recall the mid-2010s saw a lot of online publishing companies moving away from written content by ‘pivoting to video’ to try to attract audiences and higher value advertising.
The reason for bringing this concept to your attention is because as TV producers and production companies start getting into the internet (whether via branded content or direct to consumer activities), the more susceptible they will be to the vagaries of all of these companies we rely on to reach audiences and make money. Since the start of the internet, it has been the networks and broadcasters who have largely shouldered the responsibility of keeping track of the chopping and changing trends and strategies of the companies who build the products and services we use to reach audiences and make money. From the big beasts of Meta, Google, Apple, Netflix, Amazon through a whole host of smaller players, right down to tiny startups that might go on to disrupt all our lives. In contrast, TV producers and production companies have been more likely to remain focussed on developing TV ideas and making shows.
Now, thanks to the upending of TV and the progression of media convergence, producers and production companies need to start building this knowledge too. To help in this endeavour, it is important for producers to be conscious of how changeable the internet is. And how profoundly different the scale of change can be in the internet, in comparison to many other sectors including TV and film.
In general, the TV sector has been relatively stable for a very long time, and what change has happened is often of a kind, rather than a complete upending. So when we think of change, perhaps it might be the transformative nature of the UK’s terms of trade back in 2003, which handed rights back to the producers and enabled the explosion in the independent production sector we’ve seen over the past 20 years. The launch of new channels such as Channel 4 or Channel 5. The rise of cable TV in the US, or how the launch of Sky TV in the UK upset the status quo back in the 1980s. In Australia, how the one day cricket concept and associated TV rights blew up the established broadcast rights and led to other sports innovating in similar ways. Even though all these examples were ground breaking and transformative for the TV market in their own ways, I would argue they all are still within a set of known behaviours and guardrails; in all these instances, the disruption is within the parameters of it still being TV, even if distributed via a new technology, or a new channel, new market entrant, new business model, or a new blockbusting format.
In contrast, when tech companies pivot, these swings can be enormous. The companies I mentioned previously from the early days of the internet disrupted existing industries: YouTube for advertising and TV, and hotels for Airbnb. However, they didn’t disrupt existing businesses that were reliant on their previous models, because there probably weren’t any. By that I mean there were no dating businesses relying on the original concept of YouTube. And whether there was an airbed manufacturer that was reliant on the original Airbnb model, well, if they existed they’ve been lost to the mists of time.
However now, these tech companies are part of the fabric of our economies and societies, with so many existing businesses heavily reliant on them across the world. If they pivot (or indeed, if they make even a relatively small change to some part of their ecosystem), then the impact is often seismic.
Why am I raising this? Well, in the last weeks, there have been numerous indicators which hint at future changes for the very companies many rely on for their own business’s success and prosperity.
I have talked about the Google antitrust cases multiple times, and here we are seeing a battle being played out not just for the future of the company, but for the future of the internet; for users and for any business which is reliant on search to reach customers. To recap, Google has lost three antitrust cases, and remedies are now being decided on by the courts:
Google case 1: Epic Games argued that Google was operating a monopoly by forcing developers to publish and monetise their games via Google’s Play Store on Android (where Google takes transaction fees of up to 30%)
Google case 2: Google’s practice of paying other companies such as Apple to ensure their search engine is given prime placement on their devices and web browsers.
Google case 3: Google’s ad tech business, which generates $200bn a year, and makes up 75% of the company’s revenues. The Justice Department argued Google has a ‘trifecta of monopolies’ across the publisher ad server market, the ad exchange market and the advertiser ad network market.
At the same time, search has become a rapidly changing market, with users increasingly embracing chatbots and AI tools. You might have noticed the AI generated answers that has been at the top of Google’s search results for some months. You may have also noticed that the accuracy of these answers can often be wildly amiss - indeed, sometimes comedically so.
Barrons had an article last week that said the rise of AI search agents has triggered a drop off in search traffic to websites, which in turn has a material impact on companies. The article’s introduction says ‘The lifeblood of the internet is drying up. What the decline of search means for users, companies, and stocks.’
The article included this graphic below showing traffic drop-offs across a whole range of sectors:
The Barrons article included this quote below:
“Looking at search results that do show an AI answer, comparing that with search results that do not show an answer, we found a crazy drop-off,” said Kevin Indig, a search-engine optimization, or SEO, consultant and author of the Growth Memo blog. “This is a click killer.”
And you might think, how does that impact TV producers who aren’t in the branded content or direct to consumer markets? Well, the article says news and media is down 17%, Netflix saw a 23% drop in traffic from search, while Business Insider, which employs a lot of journalists as well as advertising and technical people, has cut their staff by 21% citing traffic drops that were ‘outside of its control.’ Reddit has seen a drop in traffic growth from search, going from 78% growth in May 2024, to 14% in May 2025. As well as traffic to third party sites, this will also have an impact to Google’s own sites - YouTube, most obviously. Put all this together, less traffic means smaller audiences. Smaller audiences means less revenue. Less revenue means less money to pay for content.
How this trend plays out is still unclear. As Jennifer Wong, Reddit’s chief operating officer says in the Barrons:
Nobody knows how Google is going to cross this canyon [of the rise of AI agents] and the kind of ripple effects that they’ll have across the internet.
And speaking of rippling effects, that leads us to Apple and the fallout from those antitrust trials. As noted previously, Google pays Apple around $20bn a year to make its search engine the default on Apple browsers on iOS and Mac devices - this is around 20% of their services business.
If this payment stops as one of the antitrust remedies, then this would cause quite a significant hole in Apple’s income, and may have a knock effect on their wider business. What that could look like is anyone’s guess, however it isn’t beyond the realm of possibility that the $6bn spent each year on Apple TV+ original programming could be examined. As
notes (with my bold):Apple is counting on its Services business, and the Google payments within, for growth and a valuation boost. In 2024, Apple’s wearables and iPad businesses contracted and its iPhone business was effectively flat. Services — which includes AppleCare, Apple TV+, Apple Pay, advertising, and more — grew 13% and covered up weakness elsewhere.
Read his full piece here:
Now to circle back to Google. Remembering that next big battle in the streaming wars is between Netflix and YouTube:
The current state of play is a) search is being seriously eroded by the growth of AI agents for content businesses across the web, but also for Google’s own content business which is YouTube b) Google has been judged to be monopolistic when it comes to search and ad tech, as well as payments to third parties (Apple) in exchange for search prominence which c) is going to lead to some sort of remedies.
is very good on dealing with monopolies legally as well as practically:
What could these remedies look like? They could involve parts of Google’s business being hived off and possibly the payment to Apple being blocked. As for YouTube, well, it wasn’t part of the antitrust trials, however it is part of the Google ecosystem that benefits from the ad tech and search strategies that have been deemed monopolistic.
wrote this piece for six months ago about the cases and what a Google/YouTube breakup could look like:
Separately (but related), as Google doesn’t report on YouTube’s financials as a standalone enterprise, this has caused some to ponder on YouTube’s profitability. Analyst Ian Whittaker speculated in a post on LinkedIn the lack of transparency around YouTube financials could be either because a) it is loss making, b) because its profits are so large it would be unseemly and unhelpful to share them or c) its profits are not as big as everyone assumes, which could spook the markets. Obviously, the reality is anyone’s guess, however the infrastructure costs of running what is a hugely stable and scaled video streaming platform must surely be spectacularly enormous (into the many billions). For a bit of fun, here is a poll:
Analysts MoffettNathanson recently shared some insights into YouTube’s estimated revenues, which I’ve converted into a quick little table below, but just to flag the subscription numbers: this is for YouTubeTV (Google’s cable TV bundle competitor that now has 8m subscribers and is predicted to have 10% of the pay TV market in the US by the end of this year); YouTube Premium the ad free experience; plus YouTube Music (the latter two YouTube have said have 125m subscribers).
So what happens next? It isn’t impossible for the remedies to not just tinker around the edges, but result in big pivots by both Google and Apple. Which then has the potential to impact creators and production companies directly and indirectly, either for commissions, distribution, monetisation, audience building and so on.
For those not steeped in the internet and its nature, I get a sense there isn’t a high level of awareness for how susceptible we all are to potential future pivots and changing strategies, nor how likely these are. Because of the (relative) lack of regulation or boundaries, then these changing strategies can be huge swings unencumbered by guardrails or restrictions.
Meanwhile, we are in a world where production companies and producers are being encouraged to step into the direct to consumer market that is the internet. For those already looking to take the plunge, it is important to understand that the way things operate today may not be the same tomorrow, next month or next year. And while I’ve spent a lot of time talking about court cases, monopolies and remedies, it is also important to understand that changing strategies and pivots are not a bug but a feature of online businesses and tech companies - it is how you chase down audiences, gain competitive advantage and build value. This applies to all companies and individuals working in this space, not just the big tech giants.
For producers used to the relative stability of TV and ‘how things are done’ in this market, the ever changing nature of working on the internet can be a hugely frustrating concept. There isn’t a fixed set of information you need to absorb to be able to operate in this space - rather it is a process of constantly monitoring your environment and being alert at any moment to the need for you to change your strategy based on factors beyond your control.
While this post has focussed on deliberate company pivots, there are also the more regular subtle user behavioural changes that also need constant monitoring. Here is an example: I often hear producers say they understand YouTube to be about short form content, meaning under 10(ish) minutes as users don’t have the attention spans to watch longer. However, this simply isn’t true and hasn’t been for a while; as Lucas Shaw last week noted that new data from Tubular Labs confirms that ‘57.2% of watch time is spent on videos over 20 minutes in length’.
For some producers, they look at all of these shifting sands and think it is too risky and unappealing, and therefore plan to retreat or remain in the relative calm and predictable safe harbour of TV. Unfortunately, as we’ve seen over the past few years, the TV harbour is increasingly no longer that safe. Or at least, it might remain safe for some companies, but for many others, they might have to venture out to the internet to be able to grow their businesses into the future.
I can’t do a whole big post about pivots, and not finish with this:
Tubi launches its creators strategy
Both Fox and its streamer Tubi have been running distinctive strategies in contrast to other studios for a number of years. Indeed, Tubi was one of the very first things I wrote about back in April last year.
By way of quick summary, Tubi has carved out a niche especially in the US by being free in a sea of paid streamers, and also by a focussed content strategy trying to appeal to specific users, such as an underserved black audience. As
noted, they’ve had success with gen-z rom coms such as Sidelined, which starred creator Noah Beck. I’ve written in the past about the decline of rom coms, and it clear Tubi has spotted this as another gap in the market.As for Fox, they held off launching a subscription streaming service (and the buckets of cash needed to finance the operation), and instead in February announced it would launch a streamer around its live Fox TV channels like Fox News, Fox Business, Fox Weather and FS1 (Fox Sports 1).
This week, Tubi has announced ‘Tubi for Creators’, which they are calling a new pathway for creators to Hollywood and Tubi’s audience of over 100m active users. They’ve also announced a partnership with Kickstarter called FilmStream Collective, which is touted as a way for independent filmmakers get funded and streamed.
Their launch creators include: Rhett & Link’s Mythical, Kinigra Deon (video below), Dan and Riya, FunnyMike, Jubilee and Watcher Entertainment. As
said:This is part of Tubi’s plan to have pockets of content to target niche viewers, crystallizing the CEO’s plan to create “personalized TV.” Tubi has 275,000 pieces of content and hit 100M monthly users.
To focus Rhett & Link because they’ve externalised their thoughts on the challenges of being a creator trying to get into TV. I wrote about them previously as part of this deep dive into creator formats on YouTube:
I wrote the following in the context of how sometimes it has been challenging for creators to make the journey to TV:
An example of how at times TV and creator-led businesses can be a tad oil and water in nature is thanks to Rhett & Link of Good Mythical Morning. They’ve had several TV series over the years, including Inside Eats with the Food Network.
The video below from a year ago is worth watching, where they announce they are calling it quits on trying to play the TV game and instead will be focussing on their own creative output direct to their audiences - by creating their own TV-like series called Rhett & Link’s Wonderhole (watch the trailer here). The video below also highlights how challenging it can be for creators to push themselves creatively, when it may not reward them financially via audience engagement. A reminder of the challenges that creator businesses have in balancing artistic ambitions and algorithmic performance.
Rhett & Link recently appeared as #4 on Forbes top creators list (with earnings of $36m last year), where it was noted that they have ‘launched streaming channels on Roku, Amazon Prime, and Samsung, launched a live event business and even published a best-selling cookbook.’
Speaking of the Forbes top creators list, it is worth a trawl through. The Publish Press highlighted these two trends they spotted:
Alex Cooper has the highest follower-to-earning ratio, bringing in $32 million with 15 million total followers. Cooper out-earns other creators with twice her audience size like Mark Rober and Logan Paul.
Streamers dominate engagement. Kai Cenat’s average engagement is 12.9% and iShowSpeed’s is 30.89%. Meanwhile, MrBeast averages 1.39% engagement and Marques Brownlee .58%.
They also wrote the following piece about them which offers an insight into the tension between producing for TV and running a direct to consumer creator business.
As for this announcement from Tubi, it is noteworthy for several reasons: firstly it is a strong indicator of the continued convergence of media around us. The clear divisions between ‘creators’ and ‘TV’ are being broken down, which means that creators will make TV, and TV producers - well, there are no barriers to you becoming creators yourselves. Secondly, it shows how hot the competition is between all these streamers, remembering that Netflix hinted at working with creators in some way, and now here you can see Tubi has beaten them to it. And finally, here in the UK, Tubi has a trickier sell due to its freeness not being that distinctive in a market dominated by free PSB streamers from the BBC, ITV, Channel 4 and Channel 5. This strategy may help make their content blend of TV, film and creator originals more appealing with audiences. Final point, there is no detail on what the commercials deal is for these creators - straight up licensing or some sort of revenue share.
Netflix launching TV channels within its app in France
Through its partnership with broadcaster TF1, Netflix has been using France as a testing ground for new features, perhaps before rolling those that work out to new territories. Starting back in 2020, the launch of Netflix Direct involved a linear-style TV offering which featured a schedule of shows. This week, saw the announcement that TF1’s channels will be available within the Netflix app to subscribers.
As much as this is an interesting development for Netflix as part of its strategy to try to get users to spend as much time with them as possible, it is also an important indicator for TV broadcasters who are having their own challenges in finding a future in this upended market. Will we see more deals and in other territories similar to this one?
Premium video advertising marketplace launched in the UK
This week, it was announced that Channel 4 Sales, Sky Media UK and ITV Media, in collaboration with Comcast Advertising have come together to launch a new premium video advertising marketplace.
In simple terms, it means that small to medium sized businesses - many of which may not have bought premium video or TV ads before - will be able run a campaign across all C4, Sky and ITV’s on demand and streaming inventory. It will be powered by Comcast Advertising and its Universal Ads platform, which launched earlier this year in the US.
Why is this significant? Two reasons. Firstly, it is further evidence of how important it is to amass inventory and reach in the ad market. Secondly, because Amazon is seriously on the march in trying to grab hold of as much of the video advertising market as possible, and by working together in this manner helps the UK broadcasters be competitive. And thirdly, if you remember a few months ago I wrote about the complexity of the TV and digital advertising markets:
In (very) simple terms, the TV and online video market is largely about medium to large advertisers (MLAs), while 80% of Meta’s revenues aren’t from these MLAs. To think of it another way, the explosion in digital advertising over the past 10 years has been driven by small to medium sized companies (think of all those individual online shops and Etsy sellers that appear in your social feeds), who thus far have not been in the market for the big ad spend that powers TV, streaming, cinema, radio, print etc. From the above piece:
Therefore, while the total ad market is around £40bn, when you remove all the activity of the SMEs and focus on the medium to large advertising companies, it is £16bn. And of that £16bn, 37% is on search social and display. And you can see below how much of the spend is with linear TV, broadcaster VOD (BVOD) and online video below.
So, what you can see here is that this announcement of the premium video advertising marketplace - which is looking to open up these ad opportunities to small to medium sized businesses - is a push to get more of the 37% of the above spend to shift to buy premium video ads and possibly also to try to get some of the 80% of advertising spend with Meta to also move to premium video ads.
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