Television in Dark Times: Industry Trends 2017
It is a good exercise for any prudent business leader to look regularly at the larger trends and developments that shape one’s industry. I have collected a few topics that will influence the Media industry at large this year and the Television industry in specific. As usual, we will deal with a mixed bag of issues – some are part of larger trends while others are relevant for our industry only. It is in line with what we experienced since many years: media has to deal with even more challenges from fragmentation and disruption.
We witnessed media disruption in 2016 from an unexpected angle: when a prominent figure basically establishes it’s very own media outlet or communication channel, most of the (news) media reacts with standard methods and is more or less left flabbergasted at the side line. This will become even more an issue; an issue of our stand towards democratic processes, freedom and how society shall move forward, once this prominent figure is being voted in a very, very prominent and powerful office. There is quite a bit of twists and turns to watch for in 2017 – and some of it will be scary; scary for us as individuals, but also for us as business leaders in the TV and media industry.
Here are my key trends to watch for in 2017:
1) Sensationalism will hit jarring, alarming heights – and we will continue to fall for it.
Sensationalism has become the lifeblood of many media outlets. It is not only tabloids anymore who go for the next big surprise announcement or sensational news. Sensationalism has become part of mainstream media. It seems almost as an intrinsic trade of media to need sensations to survive. Sensational news, events or stories sell copies, attract audiences and spur ratings. But we run the risk to be so dependent on sensationalism and its manifestation that we neglect the impact it has on our industry and on the common good. Sensationalism is usually only in the interest of an individual – be it a person, organization or company; it can never really advance us as a society or character. Sensationalism is the volcano on which we all dance – until it erupts and buries us in its hot ashes.
2) Media in Crisis
This is a result of the first trend but has been cooking up since some years; and was most evident in 2016. Media has to reassert its role. There is quite a bit of soul-searching and self-reflection required for that. We all need to look humbly at our own doing and whether our strategy is to continue to engage in even more sensationalism or whether we can find a better way to earn money and be valuable to our readers, viewers, listeners, users. In specific, the role of journalism and news as part of the check and balances system in modern society is at stake. Which position and value can it have when nowadays everyone is a news outlet in itself? What gravitas can it carry when one element of the check and balances system does completely ignore, shortcutting and even questions the importance of independent news and media? (News) Media will face some existential crisis and one better develops answers to such crisis better now.
3) Show me the money
One of the learnings from 2016 is that big TV ad campaigns might be nice to watch but will often not lead to the desired results. They can easily be outpaced by successful viral marketing. Hence, advertisers will move their spending away from traditional TV and will experiment more with social media and alternative ways of dispersing their message. This will have two effects: Media will be even more after any sensationalistic story than ever to increase ratings and, hence, get advertising income. On the other side, Media will now look seriously for reinventing itself and its business model. Alternative methods of income are required and the willingness to take risks and try new business ideas and fields does increase. We will see lots of new ideas, start-ups and also failures in this area.
4) Sports sets new records and will face hurdles
Talking about money: sports will rake in even higher income than ever before. Sports creates sensationalism on demand. Hence, it is the ideal content for media – and so sought after. Sports rights holders are the new Emperors and their rule is harsh, demanding and ruthless. They will fiercely expand their empires and strongly defend its value. It will be even more difficult when sports and politics become intertwined – and such (in the end government founded) entities like beIN Sports buy more and more rights and then rather arbitrarily sublicense them.
This will call regulators in action. We will witness anti-trust investigations, digging into corruption scenarios of unprecedented magnitude and some governments will be forced to start taking legislative measures to protect some sports from becoming completely exploited by rights holders.
5) The TV World is changing…again – the new old players
In 2017 media companies like Facebook, Twitter, Amazon etc, will even more set foot into Television broadcasting. In combination with everyone being a media outlet nowadays and hence access to an endless pool of content plus acquiring sports rights and other content, they will become major broadcasters. People will start (or continue) to go to such broadcasters as their first choice of getting the latest news, information and entertainment. I would not be surprised if we will see some further merger and acquisitions around that theme; where a new (but actually now very established) media company such as Facebook acquires a traditional broadcaster. Maybe it sounds completely nuts: but it would make sense, for instance, if Facebook buys Viacom.
6) Good TV production is the dope of the industry
As ever more media outlets and broadcasters fight for eyeballs, good content becomes the key element to attract such. Any company that takes TV serious will invest in its own production. It started with Netflix and Amazon, but will trickle down to even the smallest player. The range of TV production is wide these days – after all, anyone is a media producer in our digital world. But the ones with truly well-made content, will be most successful. It is true though, that good content requires good resources: people, money, creative ideas, technology, etc. TV production will continue to grow: they produce the dope for a market that is never completely satisfied and demands more and more. This is a good development for TV production, but it is at the same time a challenge for the new aspiring producer to get discovered, and for the many platforms to select which content might hit the right note with audiences. Hence, the role of good ‘dealers’ becomes more important than ever. Content curation is basically the dope dealer network – and they are hopefully taking their role seriously and not selling any crack to anyone.
7) The Mega Curator – Artificial Intelligence is making its entry
With all the content that is now available on all kinds of broadcast and streaming outlets, the need for some order in all of this jungle has never been higher. Artificial intelligence is the key word. I expect the first strides into this field by the introduction of what I call ‘Mega Curators’. This will be tools that help the consumer to select intelligently content across various platforms. Such a mega curator might come from an existing media company (but I doubt it) but more likely from an outside player. It will disrupt the industry (again) and yet will make viewing content a more pleasant experience.
8) Nothing new: Fragmentation everywhere
With the availability of abundant content resources and the advent of affordable technology it is easier now than ever to launch new platforms. Every telecommunication company, every ever so small media company and even some non-traditional media players will look into launching their very own broadcast platform. OTT TV is the new fashion – and it is a fashion that will not fade away quickly. Especially in Africa, Asia and Latin America we will see new platforms mushrooming. Every country and market will have its own OTT TV services. Small and large players will fight for market share and subscribers. It opens many opportunities for all kind of vendors and suppliers and this industry segment will boom quite a bit. Consolidation will come – but not as of yet. The challenge is to keep track of all these new launches, to be there with your services, products and content. But it is also the challenge for the new players to develop their business, strategy and product. Who will help you to monitor and navigate through this?
9) Focus is the key – Fragmentation II
There is fragmentation in terms of more and more platforms and more and more (geographical) markets. In addition, there is fragmentation in regard to consumer segments. We will see an increase in niche broadcast services. There will be more launches of services that target only a certain segment of the market. These niches can be along demographic lines, ethnicity, interests, behavior, etc. The ways to slice the market are as manyfold as there are opportunities to make money out of this. The concept of content silos and digital tribes will become more important – especially for new players in the field of TV. If you already own a certain ‘theme’ (for instance, you are the leading website around knitting) why not launch your own OTT TV service around that thematic area.
10) Diversity as an Opportunity
An area of growth that some players now discover is diversity: mainstream content and its consumers are being served in almost any market. But what about the more diverse communities and audience needs? We have already seen some players addressing ethnic communities as a growth area. These days broadcasting ethnic content has become increasingly easier. For instance, you can now get a channel live from Vietnam to be broadcasted into even the remotest part of the world where any Vietnamese diaspora is interested in watching it. Yet in many markets, the traditional broadcaster platforms are not tapping into this cash flow opportunity. Of course, there is the challenge to get the rights and setting up technology. But this can be dealt with – with experts like us, for instance. Other diversity opportunities are in thematic areas as mentioned above. But the easiest route is with ethnic content: because you work with existing broadcasters, that are relevant to the target audience. You can build on proven track records in terms of audience acceptance and hence easily communicate this value to the target market in the sales pitch and ongoing consumer relationship. So, why not launching some ethnic channels in your market?
I am very aware that my list of trends is not at all doing justice to the many challenges that media companies and its leaders have to face. It is a very subjective selection. It is a list of topics, that I plan to focus on personally – and where I think we can help our clients to deal with. And, yes, here comes the sales pitch: while some of these trends sound scary or too big to fathom, I also know that media has one big trait going for itself: the willingness to learn and reinvent. That is where we can help with our knowledge, insight and expertise. Be assured that we watch carefully how these trends develop and what it could mean for your business. We have over the years collected insight, knowledge and experience in dealing with such challenges. In addition, we have developed a tool kit in our consulting services to help you as a client to face these challenges. As so often: trends, developments and risks can provide spectacular opportunities for growth. Let us help you to grab them!