Exclusive Interview: Bonnier’s Casten Almqvist

PREMIUM: Casten Almqvist—who heads up Bonnier’s broadcasting business unit, which houses free-TV and pay-TV assets—recently restructured his businesses to keep pace with changes in technology and consumer habits.

WS: Bonnier Broadcasting was reorganized last year. What was the reason for the reorganization?
ALMQVIST: It’s a new operative model. We want to achieve two things; first to increase our transformation speed and flexibility and secondly, we want to enhance focus on our pay-TV business. Since free-to-air TV—TV4 in Sweden and MTV in Finland—is the biggest unit in Bonnier Broadcasting, we want to create a more balanced mix between pay and ad revenues going forward.

WS: You have also been following changing viewing patterns.
ALMQVIST: Very much so. Our overall analysis is very simple: we need to move from a viewer perspective to a user perspective. However, executing on this analysis is another thing, it’s a massive change for an organization like ours or any broadcasting company. Therefore we’ve pursued our transformation in steps, the first ones in the free-to-air business. Moving from viewers to users has been a huge mind shift for us. Just the very word “broadcasting” is a paradox. It indicates that we, the producers and editors, claim to know what the viewer wants. We decide that on Friday, Pop Idol and then a comedy is best for our viewers. We have been working like this for 25 years. Now everything is turning upside down since the users tell us what, how and when they want to watch. This simple insight is the fundamental element in our strategy. It is in a way the opposite of our free-to-air strategy ten years ago. About three-and-a-half years ago, after we made this viewer-to-user shift, we decided to be platform independent in the way we organized our free-TV business. No more separation between linear and digital, no more digital departments. All content and sales people are working jointly for all platforms. And we talk about total viewing and full reach, not just reach on platform A, B or C.

To accomplish this, we needed a shift in competence in our company. We had to let go of quite a few people to be able to recruit a new generation of Bonnier Broadcasting colleagues that were primarily in technology—programmers and developers from different companies. Three and a half years ago, TV4’s staff turnover was around 1 percent per year because people loved working here and we had been growing for 25 years. To achieve a shift in competence and bring in these technology-developing colleagues, we had to increase the 1-percent turnover rate to 25 percent. For a while, we had a dramatic period when we changed a lot of people. That was another example of what we did to reach this fully merged operation between platform-independent content and between pay- and free-to-air channels and platforms.

WS: The SVOD market is very competitive in Sweden. What growth do you see in C More?
ALMQVIST: Massive growth in viewing and industry turnover but also crazy competition. The Swedish market is probably one of the most competitive in the world right now. The SVOD market is by far the fastest moving part of the video industry. And another very competent player, Amazon, has just joined the club, alongside Netflix and HBO! Even in the old days when it was all about linear, we had more players in the market than most Western countries did. SVOD has been really competitive, especially in Sweden but now also in Finland. C More is growing twice as fast as the market and has been the fastest growing SVOD service for two years now.

WS: How has C More reached that level of growth?
ALMQVIST: Historically we’ve had an on-and-off relationship with C More. Three or four years ago, we were joint owners of C More with the big telco, Telenor. We had discussions whether we should leave C More but eventually we decided to buy out Telenor and be 100-percent owners because we clearly saw that SVOD was the future. We needed SVOD in combination with a very strong free-to-air offering.

We then defined C More’s program offering [and aligned it] to the TV4 offering, and concentrated on domestic programming, primarily in two genres, sports and drama. If you love sports, all the big Swedish leagues are on C More: soccer, hockey, handball and so on. We wanted to position ourselves as the strongest Swedish domestic alternative, while our main competitor in this part of the sports market, Viaplay, is strong in international sports rights like Premier League or Champions League. We did the same with Swedish drama and movies, especially original TV drama. For any Swedish drama we invest in, and our investments have increased compared to just a couple of years ago, the first window will be on C More exclusively, nowhere else, [and it’s] primarily Swedish crime. Four to eight months later, you can see the same series on TV4 and another six months down the road it will be a library offering on C More. And while it’s being promoted heavily on TV4, as a free offering or catch up on TV4 Play, you can also watch it without ads on C More. By doing this, we have put far more resources into these two categories, sports and drama. Finally, we have made heavy investments in technology for C More. Our new CTO, Henri Caddeo, has raised the whole level of features on our main online services C More and TV4 Play. You can have the best content in the world, but if you don’t have the technology backing it up, you don’t have anything. Before we invested heavily in technology, we weren’t really up to speed with our competitors. But now we are, and that’s why we have the growth.

WS: Scandi drama has been traveling very well. What type of investments have you been making?
ALMQVIST: We work very closely with most of the production company community in Sweden, including Endemol Shine Group and FremantleMedia and Banijay as well as companies associated with the Bonnier Group like SF Studios and FLX. The key to our success in drama is our commissioning model. It’s similar to ITV or BBC. We put money and competence into developing and commissioning by being very close to our partners. If you are a new entrant into the market, this is our number one unique advantage. For our competitors to match this it’s not just about having a lot of money or even, God forbid, stealing some of our great colleagues. It’s about a structural strength we’ve built up over a long time. Our commissioning ability is key, and we now have a central content department serving both TV4 and C More.

WS: As you look ahead 12 to 24 months, in what areas do see opportunities for growth?
ALMQVIST: Our two major growth engines are the online services C More (pay) and TV4 Play (ad supported). TV4 Play started as a catch-up service for the linear offerings, that’s what it was when I joined the company five years ago. Now it’s completely different, TV4 Play has become a go-to destination where many Swedes start their TV experience. We’ve had tremendous growth in TV4 Play, both in terms of the number of stream starts, but more importantly in the amount of time people spend within the service. People like to spend far more time on TV4 Play than on most other AVOD services. While many AVOD services, YouTube included, have a consumption-per-stream start measured in seconds, the average time spent on TV4 Play is 14 minutes per start, and often up to 40 minutes. That means users like what they get and advertisers can reach their consumers in a premium environment. However, we ran into a challenge a year ago where we felt that the TV4 Play user experience wasn’t as good as some of the big SVOD services in the market. That was because of one simple reason; we didn’t know exactly who you were when you visited TV4 Play. So we had to decide if we should ask viewers to log in. However doing that in a free-TV culture, where everything is about reach and making things easy and not limiting or imposing pay walls, is a very big decision. Eventually, we decided to create a login, increase the quality of the service and also provide a very strong offering for our advertisers through that. We launched in May 2016, and at that time, our year-end target was 500,000 log-in users. By the end of 2016, we had 2.2 million users, and we are currently growing by 10,000 a day. This is the most revolutionary thing within our free-to-air business in recent years, and we think we have something that will create massive growth in the next 12 to 18 months.

WS: How is the Swedish ad market?
ALMQVIST: The Swedish economy is hot, so we are enjoying a very strong period since advertising spend is closely connected to the overall economy. Television is also extremely hot right now, and that goes for TV4 Play as well as traditional linear television, but more importantly, our total video offering is what advertisers are looking for. And the log-in offering on TV4 Play is enjoying very strong demand from the market. We also see a strong trend where advertisers who shifted quite heavily into digital advertising but did not get the effect they wanted are shifting back to more TV and video advertising again, both to TV4 Play and to the linear channels.

WS: What challenges will Bonnier Broadcasting and the Swedish market in general face in the next year?
ALMQVIST: Traditional viewing is going down in the Swedish market, and this will probably be our number one challenge in the next year or so. We need to have a very high pace to continue transforming our company into a platform-independent business, so we’re not left on the shore, so to speak, when the ship sails and traditional ratings are too low. It’s all about keeping the pace.

One of the challenges we have on the free-to-air side is that young audiences, 13 to 25, are not really with us the way we would like. So we have launched a project called ENT, which is our creative talent network primarily for talent that we find on new digital platforms. We bring them into our community, back them and let them develop their ideas. It could be anything from continuing to be on YouTube or Snapchat, but promoted by us, all the way to having their own shows on TV4 Play or even hosting linear shows. We have ENT sidekicks in our own Strictly Come Dancing show, for example, or our on Pop Idol. Here, young talent that we found through ENT are part of traditional TV formats, and we create value both for them, for our advertisers and ourselves. I think ENT is an exciting example of how we are trying to address the challenge of attracting young viewers.