France Télévisions’ Diego Buñuel, BluTV’s Aydin Doğan Yalçindağ, the EBU’s Jean Philip De Tender and Banijay Rights’ Cathy Payne discussed evolving media regulations, funding models and more in a session organized by the Paley Center for Media.
PwC issued a rosy update on the global media and entertainment landscape this week, with the sector expected to top revenues of $2.6 trillion in 2025. Indeed, with growth rates of 6.5 percent this year and 6.7 percent next year, the business has deftly rebounded from the ongoing effects of the pandemic, capitalizing on the trends in consumer behavior that were accelerated amid stay-at-home measures.
Traditional TV/home video will remain the largest E&M consumer segment, with revenues of $219 billion by 2025, contracting by a 1.2 percent compound annual growth rate (CAGR) from 2021. Video streaming, meanwhile, is booming, with SVOD projected to grow at a CAGR of 10.6 percent to $81.3 billion in 2025. PwC cautioned, however, “the next few years will require providers to find new and innovative ways to secure access to consumers as consumption subsides to pre–Covid-19 levels.”
Werner Ballhaus, Global Entertainment & Media Industry Leader Partner at PwC Germany, also stressed that media companies need to be well aware of a shifting regulatory environment. “Even in the areas that offer the most compelling topline growth—like video streaming—the nature of competition is likely to change dramatically over the coming years,” Ballhaus said. “And all the while, the social, political and regulatory context in which all companies operate continues to evolve in unpredictable ways. All of which means that sitting still, relying on the strategies that created value and locked up market share in the past, will not be the most effective posture going forward.”
Evolving regulations took center stage at the Paley Center for Media’s Paley International Series earlier this week. In a session titled How are International Regulations Impacting Media and Streaming Platforms Globally?, France Télévisions’ Diego Buñuel, BluTV’s Aydin Doğan Yalçindağ, the EBU’s Jean Philip De Tender and Banijay Rights’ Cathy Payne talked media directives, censorship, consumption trends and more with moderator Faraz Ansari of Alliance Media.
Ansari asked how regulations will impact content creation. “No doubt the directives coming on board will affect content,” said Payne, the CEO of Banijay Rights, citing as an example the EU’s Audiovisual Media Services Directive requiring local content investments. “Coming from a company that produces content in all major territories worldwide, it’s important to tell local stories. You can understand why regulators want to protect local markets and the local industry. All broadcasters know that local content drives audiences. I don’t see regulations stopping the types of content we produce. In the U.K., we’ve had duty of care [protocols] in terms of participants and attention on the editorial content that we produce. But from our standpoint, as we’re rolling out our formats in lots of territories, content has to be organically adapted for the market. Protecting local voices is protecting the local industry. That is important.”
Buñuel, the head of programming at France Télévisions, added, “I think we’re very far from peak TV; the question is what do we want to do with TV and who is going to say what we should do with it? For many years, the biggest budgets were secured by Anglo-American productions. Netflix was responsible in a way for the rise of local for global. We now see a generation of viewers who are interested in seeing stories told from local markets. That is a real revolution right now. The different regulations that force certain investments in local markets will push and stimulate a new generation of creators who will trigger content that will have a broader appeal than just traditional English or American productions. A series from Turkey or Asia or Germany or France can have global resonance…. These regulations will trigger a new generation of creators and content to sweep the world.”
Yalçindağ is the founder and CEO of BluTV, the leading SVOD player in Turkey. “Turkish content travels very well in certain regions,” he said, notably in the Middle East, Latin America and South Asia. “From the regulators’ point of view, they are trying to support this. Editorially, they are trying to keep local content within certain limits. If you’re a streaming company, you have a bit more flexibility in terms of what you can air. We use that to our advantage. Over the last four years at BluTV, we’ve focused on producing a lot of original content. We produced more than 25 shows over the last three to four years. That’s probably three times what Netflix has produced in Turkey. Having that local content gave us an advantage in gaining subscribers, locally and internationally. The regulators are trying to support us but also, editorially, are limiting us a little bit, not a lot.”
De Tender, deputy director general and media director at the EBU, stressed the importance of local content to public-service broadcasters. “Content is not the problem. It’s getting our content to the audiences that has become a problem. We have an obligation as public-service media to reach as broad an audience as possible. We cannot only depend on our own linear or digital platforms; we need third parties to reach that audience. It has become an issue. A few companies today decide who is watching what and when. In Europe, there’s a conversation about regulating the online space.”
Yalçindağ touched further on the issue of content censorship, “It’s mostly self-censorship. We try to do our best in guessing what the regulator or society, in general, will accept. Since we can do age verification and we know if the consumer is over 18, that gives us an advantage with the regulator. They want to protect the younger audience. It’s not in their best interest to censor content producers in Turkey. Content has been one of Turkey’s biggest exports for the last eight to ten years. They know if they censor too much, we won’t be able to export our content as much.”
Self-censorship happens in a different form in France, Buñuel said. “The producers, when they come to us at France Télévisions, think that because we’re a public broadcaster, we’ll only do this type of content and nothing else. I’m trying to make sure everyone realizes that I don’t want self-censorship. We won’t only do certain safe types of content.” He referenced the evolution of the U.S. premium and cable channels years ago, led by the likes of HBO and FX. “Public broadcasters and their content have to realize that we need to speak to the world as it is. When I came into this job, I found a tendency to fantasize about what society should be or how some want it to be, not being realistic as to what it is. I’m trying to bring a way of seeing the world as it is.”
“We have to work with the cultural sensitivities of markets,” added Payne, “especially in our non-scripted programming. Our production companies are all local. They are part of that local industry environment, so it’s a fairly organic process.”
On regulations requiring global platforms to invest locally, De Tender said he would like the big players to be “taxed at a much higher level,” with that income to be deployed into “a local fund where both public-service media and commercial broadcasters can get some of these revenues and reinvest in the local system.”
Buñuel stressed the importance of rights retention as content investment models evolve. “Broadcasters in Europe cannot own the rights to what they produce,” Buñuel said. “So we have to license rights for a certain amount of time. The platforms’ business model is to own. Sometimes in Europe, they can’t because of regulations, but they’ll take it for seven years, worldwide rights and so forth. So there is a trend among content producers and talent where they were very excited at the idea of platforms coming in. But they realized that the money being spent, first of all, if you don’t spend it all, you have to give it back, and second they lose the rights and become executive producers in a way. That’s also a tension in the market. Certain people turned away from traditional broadcasters as there was the appeal of more money and global broadcasting with a platform. They are also realizing that in the end, their margin is capped, to 10 percent usually, and they lose all rights. So they do get bigger budgets, but are they getting their money’s worth in terms of the company they are developing?”
The discussion then moved to the challenges faced by public broadcasters. “Public-service media has been under pressure for the last 10 or 15 years,” said De Tender. “The model in some countries is a license fee. In some territories, they can have additional commercial revenue. Because of the pandemic, most of the [government] spend will go to health, science, the recovery of the economy. This means the financing [for pubcasters] is decreasing. The ideal model is if you invest enough money in public-service media, you invest in your local ecosystem. We have very good national European regulations. Cathy referred to the Audiovisual Media Services Directive, which is about multi-pluralism and local content. The problem is the spending and the investment is not following. We must make the case for the importance of local content and local creativity. What I say to governments is, you will lose it if you over-focus on the tech giants and not take some of the money back into the local ecosystem.”
Yalçindağ said BluTV is competing with a local pubcaster that invests heavily in domestic content. “It’s one of the things we criticize the government for. Of course, the public-broadcasting channel should exist and invest in content, but they are almost like a private enterprise, competing with us as a streaming company and other broadcasters. They are in a very strong position.”
Ansari asked Yalçindağ about consumption trends post the Covid-19 crisis. “We’ve seen more engagement on the platform,” he said about usage during the past year. “We’re hoping the consumer behavior will stay the same; obviously not as intense as it was in lockdowns, but I think it accelerated the shift from traditional TV to streaming. Hopefully, it will stay that way.”
On the impact of platforms like TikTok, Buñuel said, “The competition is not only in content but in screens—TikTok, Instagram, Fortnite. The challenge is appealing to a generation that is not used to consuming long-form content or not used to coming to television. We’re trying to find the right way to connect with younger audiences. All this new content, either self-generated or consumer-generated or created by a video game studio, is a new frontier in terms of fighting for eyeballs.”
Yalçındağ added, “It does increase competition, one thing we try to do in our local market is get some of the influencers or content creators on YouTube and TikTok and do some content with them on our service, and it’s been quite successful. Since they have such a large audience, you automatically have their audience transferred to your platform.”
Payne and Buñuel both stressed the continued importance of domestic broadcasters in the media landscape today, even as the number of streamers continues to proliferate. “I don’t believe linear television is dead at all,” Payne said. “Linear television has evolved with catch-up services and their own VOD offerings. They can focus on local content and their domestic market. As has been said, they need to be supported. If I were a betting person, I’d be betting on some of those big domestic platforms.”
Buñuel added, “The average SVOD consumer can take between 6 to 20 minutes to choose content, to search for the content they want. Our role as linear television is to curate an offer and be close to our audiences, have hosts and hostesses that create a relationship [with audiences]. Linear TV has to redefine itself in seeing what their relationship is to the platforms. I don’t think it’s a war; it’s been put that way. Platforms have a great role to play and linear television has a great role to play. I tell my teams that we are a subscriber-based service because people pay for our service [through the license fee]. It’s a question of making sure that our teams understand that we also have to deliver a service. That issue of trying to find our role in society, our role with producers and our role next to platforms and highlight our differences and our strengths is going to be essential for the development of our industry in the years to come.”