Why broadcasters might hold the advantage as the streaming opportunity evolves

Once considered symbolic of legacy media’s woes, national broadcasters possess many of the qualities needed to dominate the streaming opportunity, as long as the desire to innovate burns bright over the long-term.

In this article Peter Effenberg, CEO of our portfolio company Jay, highlights the importance of economic strength, content diversity, changing viewer habits, and why embracing change is crucial, if national broadcasters are to win big in the streaming battles ahead.

Economic Power Beyond Subscription Models

Broadcasters arguably enjoy a unique advantage, grounded in relatively stable distribution and advertising channels. Unlike some global streaming platforms, broadcasters are not facing a challenging transition from Subscription Video on Demand (SVOD) to mixed models including Advertising Video on Demand (AVOD). Instead, they can leverage their existing infrastructure for rapid profitability. In contrast, many global streaming platforms face the challenging and expensive task of creating new AVOD channels, internal advertising departments, and building new relationships with advertising partners from the ground up. Broadcasters, however, already possess these capabilities. With numerous distribution channels and established relationships with advertisers in place, they are well positioned to flourish in a mixed-model streaming environment. In turn, broadcasters can also build on revenues from traditional advertising sales businesses; selling in-stream advertising simply represents a new pillar within that strategy. At the same time, the number of paying subscribers to broadcasters' services continues to rise.

Quality is king, yet diversity counts too

Speaking of subscribers - in the battle for viewers' attention, content diversity is as critical as quality. Indeed, streaming services such as Disney+ and Paramount+ boast a vast archive of established, well-known productions and continue to actively produce new content. Nevertheless, investment in new productions has significantly decreased among global streaming providers in recent months, whereas broadcasters continue to maintain a steady flow of new productions.

Additionally, broadcasters are able to merge cable, satellite and streaming channels – achieving very high audience awareness and viewer reach, which is, in turn, beneficial to advertisers too.

Furthermore, broadcasters' experience in commissioning an extensive range of formats offers another advantage. While pureplay streaming propositions focus primarily on series, feature films and documentaries, broadcasters have long offered a vast and ever-expanding variety of content including live formats and sports. Evan Shapīro's analysis of the audience figures for the US TOP 100 shows illustrate the power of sports events' in this respect. Indeed, the battle for sports fans’ eyeballs is set to continue with Amazon venturing into the European Champions League and Netflix featuring WWE content from 2025.

Live sports content clearly looks set to remain strong in attracting audiences at scale, serving as a focus point for communities of sports fans across the globe.

Follow the User (Behaviour)

User behaviour is undergoing a fundamental transformation. Gone are the days when viewers had a deep and strong connection to a single media brand or channel. Instead, today we are seeing the rise of content loyalty over all else, as audiences seek out their favourite series wherever it's available. Viewer allegiance is not to a channel and its schedule, but to the content that resonates with them and is at the heart of conversations among their peers.

This shift in behaviour leads to new demands: Navigating a plethora of streaming services can be frustrating. "Where was The Bear again?" and "Oh, the NFL is on RTL+." Content aggregation might, therefore, end up dominating in 2024. According to a study by Ampere Analysis, 38% of US respondents feel overwhelmed by the current streaming platform offering, and 50% express a desire for aggregation. Ideally, all content would be accessible through a single app. Such data exchange between platforms facilitates comprehensive recommendation systems and enhances the user experience - not to overlook the application of contextualised and personalised advertising. Here, broadcasters can lead the way, as they are already implementing the integration of their content with that of other platforms in their offers. With providers like Sky, for example, audiences can access all global streaming services plus their national offerings. ARD and ZDF cross-link their content, and even the ProSiebenSat.1 platform joyn includes public broadcasting content.

This segways into another critical aspect: The viewing experience. This doesn’t begin with the start of a film but with the platform's interface. Hence the design, user experience, and features of a streaming service are critical. Audiences now expect a certain standard and have little patience for outdated, cumbersome or slow interfaces. Here, the imperatives are innovation and interaction: Does the service enrich the viewing experience with bonus content about actors, filming locations, or historical context? Is it possible to navigate seamlessly from one piece of content to another? Can viewers easily purchase music or outfits that they discover in their favourite shows directly through the platform? The aim should be to offer users more than just viewing material. To date, the performance of all providers in enhancing the viewing experience has been underwhelming. There's a pressing need for this to improve.

Rising to the challenge

The core challenge for broadcasters is to adapt to changing viewer preferences and move beyond the outdated linear approach. New technology enables broadcasters to do so, while building on their incredible body of experience.

But to realise the full potential of the opportunity, broadcasters will need to ensure innovation can occur unhindered by loyalty to existing structures, a lack of understanding of new viewer behaviours, or the inability to move at pace. The moment has arrived for a holistic approach with the audience at heart – integrating designs and interfaces seamlessly into the user experience, ensuring cross-platform content discoverability, and leveraging user data for both personalised recommendations and new commercial opportunities.

It's noteworthy that these are the same challenges other industries have navigated for some time. Across music and gaming in particular, we now see multiple formats, supported by platform convergence, across the board. New innovations were fused with the experience and stability of existing models to create a better proposition for consumers. This scenario lies ahead for the TV and film industries: Broadcasters must draw inspiration from the innovation of major technology companies and streaming platforms. Focusing on opportunities to evolve viewer experiences and new business models, while building a resilient industry for the future, from a stable foundation that has been in place for decades.

In conclusion, broadcasters will be well-positioned to take advantage of the streaming opportunity provided they make astute decisions now and act swiftly. Embracing an open-minded, digital-first approach, avoiding the perils of technical debt while driving business model innovation will be critical steps.

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