DTG CEO Richard Lindsay-Davies passionately called for regulators to “leave no one behind” as IPTV clearly looks to dominate into the future. George Jarrett reports.
Speaking at this year’s DTG Summit, hosted by broadcast journalist David McClelland, Arcade Media Co-Founder Jordan Schwarzenberger made a point of revealing his age as he said, “I am 26. My aim is to slightly scare, but also to provide a bit of optimism. I guess I accelerated the end of linear TV with what’s going on in the YouTube world.”
He based his case on The Sidemen. He said: “They are the biggest content creators in Europe, the biggest YouTubers. There is a generational shift in content, away from centralised programming towards real people telling their stories, having fun with friends, and sharing on the most authentic site there is, which is YouTube. And now TikTok as well.
“Our role at Arcade was to say to these guys you are doing an incredible job, you have built an amazing audience, but how do we help people within the ecosystem of IP and brands around that enable you take it to another level. The biggest takeaway today is that content and brands need to be thought of in a real 360 way today,” he added. “The opportunity is to think about IP first rather than individual content and programming.”
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The Sidemen are seven guys – Toby, Josh, Simon, Vic, Harry, Ethen and JJ – and they have 20 million qualified subscribers on their main channel, 8.2 million on their second, and 5.6 million on their third.
“Whenever I go to speak to TV people about these numbers, they do scare a little bit. These guys get 60 million average hours of Sidemen content watched every single month – with 200 million views across the main channel. If you multiply more Sidemen with React and Side+ the numbers get pretty scary,” said Schwarzenberger.
What followed with the launch of a number of brands away from Sidemen content. “This is giving more value to fans across the world. Side+ is the membership club, essentially our own Netflix. That is £6.99 a month/£69.99 annually, and now makes more money for the Sidemen than the YouTube channels,” he added.
We need to change strategy
A brand of Vodka, seven restaurants, breakfast clubs and Sidemen clothing brands have all appeared. “Regarding the 16-24 group, watching TV is down by two-thirds in a decade. They consume 7X less TV compared to over 65s. And it just going to accelerate. Imagine now what kids who are growing up with TikTok are going to be like,” said Schwarzenberger.
“We have seen an 83% decline in commercial TV viewership in a decade amongst this demographic. It is terrifying. The BBC’s young viewers have deserted TV channels for TikTok and YouTube. Linear is dying, and this is why we need to change our strategy,” he added.
Offering ‘intel’ to help he said: “We would be coming at it from a YouTube first standpoint when I approach TV today. It is investing in Gen Z’s platform property. Channel 4.0 has done an amazing job. Those guys understood that you need to get into these platforms properly, but YouTube is not cheap, and it does take time.
“Why I think it is terrifying for the industry is that social doesn’t pay the bills, and how are you going to sustain the heavy rates of TV production with social income? Well actually, in YouTube you can, and that is the key. Work on making content for this audience in the way they are expecting to be served content.”
Schwarzenberger pointed to the huge success of (Jimmy Donaldson’s) Mr Beast and the Beast Games on Amazon Prime. He was another YouTuber, now trusted with $100m of funding.
“Trust the people who are building and verifying their ability every single day, like Mr Beast and The Sidemen,” he said. “Think like creators, but be continuity first. I am not convinced that things like FAST (a $7bn US market) will be able to subsidise the levels that have been set over the last 20 years of Linear dominance.”
Driving fragmentation
Yih-Choung Teh, Group Director for Strategy with OFCOM talked about an imminent report on the future of TV distribution - requested by HMG - which required 18 months of research and stakeholder chats.
One of his slides showed that people aged 75+ are 4X as likely to use digital terrestrial TV (DTT), socio-economic group E is 3X as likely, and disabled people are 2X as likely.
Teh said: “The average person watched around 30% less live TV last year than they did back in 2018. And greater choice is driving fragmentation of the viewer landscape.
“A growing proportion only use the Internet or IP to access content and this group is projected to grow. Some forecasts suggest that 70% of households will rely on IP alone for their TV content in 2040,” he added. “The same projection suggests that 1.5 million (UK) households could remain unconnected to the Internet even up to 2040.”
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With broadcasters delivering content across DTT, satellite, cable and increasingly IP, they have been forced to look at costs.
“As DTT declines so does its cost-effectiveness as a prime delivery mechanism. Some broadcasters have been explicit with us, saying that they anticipate a tipping point when it is no longer financially sustainable. This will create a risk for audiences,” said Teh.
He ended by pointing at the two fronts. “Any intervention to secure the future of TV is likely to be complex, perhaps needing 8-10 years of planning,” he said. “You’ve just got a huge volume of content online, and we recorded that from October to December last year TikTok took down 176 million videos which breached its community guidelines. So, there is a skill issue, there is a diversity of content, there is innovation in content creation, all of which you want to preserve.”
Niche will grow over coming years
The second half of the DTG summit saw a series of panel sessions on diversifying strategy, FAST and discovery.
Nicola Moffat, Advisor at Viveda Consulting moderated the strategy session, with Jacob Ahlin, Digital Director of Narrative Entertainment; Kate Dean, a consultant in concept to execution on digital projects; Marcos Milanez, Chief Content Officer with Rakuten TV, and Dan Finch, Co-Founder and Chief Commercial Officer of Simplestream.
Dean opened up with the observation: “We have got the point now where it is premium content on SVOD itself. There is consolidation happening, and in the very nature of SVOD the lines are starting to become blurred because what we are seeing is that advertising models are now starting to form part of what was traditionally that SVOD space. Niche is the area I think we will see grow over coming years.”
Niche can take people closer to the Jordan logic. “These are very passionate audiences, and if you can find your people, they will be super loyal, and churn is low. One of the areas that you can grow but cannot in general entertainment is around the membership model. Versatility is something we have heard today over and over.
Ahlin added: “FAST channels were library channels in the beginning, but people are swapping that out for premium content. The single-genre and multi-genre channels have been seen to be the most successful. There are end-to-end so many partnerships. Everyone has an opportunity to be your partner or competitor, or become both.”
Milanez looked at the ecosystem going forward. He said: “We talk a lot about FAST, but AVOD also has quite a considerable chunk of the business.”
Finch expects a rush of evolution in the FAST space. “Up to now FAST is basically telly, it hasn’t managed yet to offer the continuity that a channel may have in terms of brand identity. That will be coming, and when you have that cost of entry will be millions of pounds less than today, and that will also allow more granular data to go back to the brands.”
Dean sees a pragmatism in pricing propositions. Trialling annual subscriptions had been mentioned before.
“You might also get tiers in SVOD platforms where you could maybe rattle down your subscription through a period,” she said. “Rather than unsubscribe you get a better rate it you toggle down rather churn completely. Just having some pragmatism and making it fit for purpose; let them do it on their own terms.”
Weaving in content priorities
In the ‘discovery’ session, chaired by Jonathan Broughton, Research Director at PlumResearch, Alex Wall, Head of Streaming Editorial at C4, said she is trying to balance editorial curation and the importance of brand within C4’s personalisation strategy.
“We too really try to put viewers at the heart of our decision-making, and audience data and relevance are incredibly important,” she said. “It is really important that we retain that sense of our brand, our voice, so my philosophy is to try and not only persuade a viewer to trust a recommendation but also the stakeholders that they can embrace technology. So often it feels like us versus them when it comes to AI or personalisation, so my goal has been to try and weave in our content priorities within our recommendations, within the algorithm.
“It is the beginning of that journey for us and it is all about metadata and how much a user also feeds in. So, it is really about that trust,” she added. “I think that personalisation is just one part of the way we curate: another way is social currency (word of mouth). We have curations around what people are talking about.”
Wall prefers to use ‘informing’ in place of ‘persuasion’. “It is just about being really clear and signposting when it is a recommendation – it is an algorithmic one or an editorial one,” she said. “There are so many different brands with a content experience, so finding a way to retain that tone of voice and have that richness of experience is so crucial.”
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