A future for intermediaries between Content and Consumers?

Is content really king?

Is there a future for intermediaries between Content and Consumers?

Is there a future for intermediaries between Content and Consumers?

Following up from my earlier blog (“Broadcast TV is dead” versus “Flat Earthers”), another way of developing the debate on how content will be delivered now and in the future is by examining the phrase “Content is King” and whether intermediaries between content and consumers have  a future.

The first debate is on whether content really is king - and this should be a very short debate. Ask anyone under the age of 30 (and a surprisingly large amount of people above that age) what comes first - the channel brand or the programme brand - and the answer is emphatic: the programme. Be it Game of Thrones, Bake-Off, Sons of Anarchy or Downton Abbey, almost all young people want to view programmes, not channels.

That view is heresy to some – though those people are almost always broadcast industry executives who are struggling to adapt to fundamental changes in the industry they work in. Let’s use the term “Flat Earthers” again. They frantically shout back that channels give some kind of guarantee/signal as to quality of programming, and that without channels investing in original content, how could the next Downton Abbey ever evolve?     

Really? Here’s the view of one 16 year old:

“My dad always goes on about the BBC, but I don’t even know what it stands for”

As the dad in question, I find that sad, but that’s not an uncommon view among millennials. Unlike my generation, they do not turn on the TV set and flick to one or other channel automatically to see what is on. (Many of them don’t bother to turn the TV set on at all, but let’s not get onto that issue here!)  

Or as the managing director of one UK broadcaster put it earlier this year, though his main channel has lots of great programmes, all anybody ever asks him about is one specific marquee series,  and when you ask millennials as to what channel produces that series, they have absolutely no idea – and frankly don’t care either.

As for the question that without channels, just who will invest in original content, I think back to when I worked in the music industry. Then the “Big Six” record labels all said that the internet and its ability to allow artists to engage directly with audiences would kill diversity in the music industry, as without the big labels no new artist would be able to develop/finance/market their music.

While the labels have by and large refused to adapt their business models and have shrunk (there are just three of them left now), there is now more diversity of artists and music than ever before. Yes, distribution and revenue models have changed; yes, a lot of A&R men have lost their jobs, but the music industry from the point of view of consumers and artists (who are the only stakeholders that truly matter) is thriving.

The key question is: are broadcasters mere intermediaries in the content industry, and if so will they go the same way as the Big Six record labels, or the huge travel agents that used to be the “intermediary kings” of the travel industry?

If the definition of an intermediary is someone that is involved as a third party between two end points in a transaction, then broadcasters are undoubtedly intermediaries – with those end points being viewers and content.

Perceptive broadcasters realised this a while ago; many more do now. Witness the rush of many broadcasters to “add value” as intermediaries (or put another way, eliminate their intermediary role altogether) through expanding production arms, buying studios and MCNs, and spending more on original content /securing exclusive rights  (often diverting expenditure through savings costs in “back-end” functions).

A few years ago one far-sighted global multichannel even tore up its existing production contracts with studios (giving limited term access to the produced content, and for linear distribution only) and insisted they were replaced with contracts that gave the company in perpetuity rights across any and all distribution avenues. Those studios that refused to change were dropped.

Netflix and Amazon are often scoffed at by “Flat Earthers” for their commissioning of original content, with the accusation that what they commission is a drop in the ocean compared with broadcasters – yet those companies are not only  producing more and more content, but are also innovating in a way that most broadcasters would never dare to do, whether it’s commissioning series based on viewer votes on which pilots they like (Amazon) or releasing all episodes of new series all in one go (Netflix), thus eliminating the tyranny of the scheduler.

And it’s not just perceptive Tier 1 broadcasters who are changing what they are doing – many medium-sized and smaller companies are also adjusting  their business models and practices, whether it’s going into different types of content, trying new distribution routes or hiring new types of executives with different backgrounds and who don’t bang on about the golden age of broadcasting.

There is no guarantee that all these initiatives will be successful, but what is guaranteed is that broadcasters of all sizes that remain intermediaries that essentially just connect content they don’t own with consumers over traditional distribution means only will end up as relevant to viewers in the 21st century as those scientists who maintained the earth was flat.