YouTube is devouring TV nets around the world. Their choices: capitulate or collapse
Plus all the MIPCOM CANNES news and photos.
AMC Networks sent The Walking Dead zombies onto the red carpet at MIPCOM CANNES. It could have been a metaphor for traditional broadcast and cable players who’ve long shown up to MIPCOM to source funding for their biggest, most expensive swings and are now facing flatlining audiences as viewers start their TV sessions on YouTube.
Instead of the food shows on traditional TV, my parents are now enjoying YouTube creators like Leothebaker, who bakes bread and sells it in a car park: That’s it. That’s the show. My siblings are similarly addicted to watching savvy resellers like thehomeschoolingpicker who lives in Kentucky.
YouTube is now eating the entire global TV business and its appetite for new programming is insatiable. The video tech giant with hundreds of millions of viewers was in Cannes for the first time in a big way. Its mission is to lure more big whales to join the trillions of tadpoles eking out a living on the platform. How else would it maintain year-on-year quarterly ad growth of 13% on close to $10 billion?
Across Europe, broadcasters are experimenting with YouTube in order to reach lost viewers. YouTube viewing among the 55+ group has doubled, according to UK TV regulator Ofcom, Executives at top UK networks must have choked on their chocolate biscuits as they digested the apocalyptic findings. YouTube is now the second largest player in UK TV just behind the BBC.
The California-based Google monster wants to push national broadcasters and major global production companies to think of themselves as creators too. Mega indie production company Banijay signed a new pact with YouTube to form a new lab that sees creators reinterpret its formats for France. In Germany, where 25 percent of connected TV viewing is on YouTube, broadcasters including RTL, ProSieben and ARD signed up to new deals for something called YouTube Shows, which helps surface full episodes versus clips.
YouTube is a “strategic accelerator for any modern media business,” according to the company’s Head of EMEA, Pedro Pina, speaking in classic INSEAD parlance. He added that YouTube is, “the discovery engine that fuels global reach, multi-format engagement and data-driven innovation.” Understanding the business model though does not require a management degree.
“We don’t commission stuff, so we don’t give money and then make profit back. What we do is if you’re successful, I’m successful. If you’re not successful, I’m not successful,” he said. “It’s the best combination ever.” No kidding! YouTube was born in a Menlo Park garage that was quickly papered with legal filings over content theft. Viacom sued for $1 billion after it found 150,000 clips of its shows had been uploaded. Now YouTube is on track to surpass Disney as the biggest media company in the world this year if it hasn’t already. YouTube’s estimated value? $550 billion.
YouTube’s twenty year evolution has been astonishing by any measure. Back in 2011, it announced a $100 million program to pay big name stars to create channels on the six-year old service. YouTube wanted to draw viewers and advertisers to premium content. Madonna helped create DanceOn while Shaquille O’Neal planned the Comedy Shaq Network. YouTube promised to add 25 hours of new original content a day. Now, creators upload 20 million videos per day.
Broadcasters are realizing that if they want to grow, or stay solvent, they have to shift their shows to where the viewers are. The BBC’s commercial arm has a YouTube channel called BBC Earth with 14 million subscribers. Jasmine Dawson, SVP-digital at BBC Studios co-hosted the MIPCOM keynote with Pina, sharing how YouTube can build fandoms for shows and help, “monetize those audiences, both on platform and off platform.”
But does it seem fair to pay YouTube 45% of all ad revenue? Jonathan Allan, interim CEO at the UK’s Channel 4 has spoken out on the need for some protection: “It’s very different being a creator in your bedroom versus a big broadcaster like this.” UK players want the government to force YouTube’s algorithm to place them more prominently, particularly the traditional news providers who are being drowned out.
French broadcasters’ reach has now shrunk to 70 percent of the population but its not all YouTube’s fault. In France, 40 percent of viewers with Netflix don’t explore free-to-air TV anymore, according to research from France’s broadcaster TF1 which just threw its entire channel into a partnership with Netflix just to keep itself in front of viewers. That’s left producers scratching their heads about rights issues and the disappearance of a sales window.
This all leaves big broadcasters, many funded with public money, with a conundrum. Ad revenues are draining away to US-based tech companies faster than you can say, “Call My Agent.” Should they just join the party and hope their national governments will figure out a way to protect them?
As for YouTube it couldn’t be happier about the migratory patterns of a flock of big name broadcasters. “Everyone could be a YouTuber. BBC Studios is one of our best YouTubers!” said Pina. Let’s hope that British tax-payers aren’t funding the growth of the BBC’s biggest adversary.
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MIPCOM HIGHLIGHTS:
Celebrities on the Croisette: Dr. Who star Jodie Whittaker features in a new “Thelma & Louise” infused art heist drama for ITV Studios set in Spain called “Frauds.” Another promising international show, “A Taste for Murder,” is set in Capri, Italy was written by Matt Baker, a former editor of mine, who is now a screenwriter.
AMC Networks CEO Kristin Dolan was in town to help celebrate 15 years of The Walking Dead. And yes they brought the zombies.
My favorite reality show family Dick and Angel Strawbridge are back for another season of their Channel 4 show Escape to the Chateau. I accosted them for a fan photo at the MIPCOM newsroom. These veteran home renovation experts got me through COVID.
Matthew MacFayden, aka Tom Wambsgans, was in Cannes to promote in a new series called The Miniature Wife for Sony Pictures Television.
Kudzi Chikumbu, hired from TikTok, as VP Partnerships at Fox-owned Tubi showed off its creator verse platform.
The global appetite for Turkish dramas featuring unusually good looking men and women knows no bounds. Here are 13 of the most buzzworthy.
One year old AI video start-up Kling AI is a rival for OpenAI’s Sora product. They were in Cannes to share the work they’re doing with a host of Chinese film directors and creators. It’s on track to make $100 million this year. Check out their reels here. Again, they’re just a year old.
Animé is powering the Japanese economy, according to a top Japanese government official on a panel at MIPCOM. Here’s Sony Pictures Television chief Keith Le Goy with his thoughts on how animé and gaming are the future of IP.
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It’s remarkable how quickly YouTube has gone from disruptor to default. What once looked like a threat to TV is now the main stage, with even legacy broadcasters playing by its rules. The irony is hard to miss because publicly funded media is now feeding a private platform’s dominance. In the end, survival in media always comes down to following the viewer, wherever they’ve already gone.
Keith Le Goy's comment about anime and gaming being the future of IP is particularly sharp given what's happening in this article. Traditional broadcasters are hemorrhaging audiences to YouTube while Sony Pictures Television has Crunchyroll delivering anime content that transcends geography and language barriers. The 45% revenue cut YouTube demands from broadcasters is brutal, but it underscores Pina's point that YouTube doesn't commission - they simply take nearly half of whatever succeeds. The BBC's surrender to becoming 'one of YouTube's best YouTubers' is astonishing for a public broadcaster. Meanwhile, Sony's anime and gaming ecosystems create IP that works natively in digital distribution - whether that's YouTube, PlayStation, or streaming services. Le Goy understands that IP which originates in participatory media (games, anime fandom) has built-in engagment that passive TV formats struggle to replicate. The French broadcaster TF1 throwing their entire channel at Netflix just to remain visible is the most depressing data point. When national broadcasters accept distribution terms this asymmetric, the era of curated public media is effectively over. Sony positioning around gaming/anime IP while others chase YouTube crumbs seems prescient.