Tag Archives: Humans

I had not expected a follow through on yesterday’s thoughts, but here we are. It seems that there is a business dispute between UKTV and Virgin Media. The Guardian (at https://www.theguardian.com/media/2018/jul/22/four-million-virgin-media-customers-lose-uktv-channels-dave) gives us: “after Virgin sought what UKTV called a multimillion pound cut in fees, leaves fans of shows including Judge Romesh, Harrow and Red Dwarf unable to watch some of their favourite programmes“. Let’s be clear, this is a business decision, so when Virgin wants a 7 figure fee cut, there must be something behind it, should there not? In addition, we need to offer in opposition, that reporting on (as quoted) “According to UKTV, “around 4 million households” were no longer able to access the channels after the midnight deadline passed” should also have an impact on advertising, as you are broadcasting to 4 million less viewers, so there is that in the mix too. Is it merely pricing?

The quotes: “Virgin Media has accused the broadcaster of seeking “inflated sums” to provide its paid channels and linking those to provision of free channels such as Dave and Home“, as well as “Steve North, the head of comedy and entertainment for UKTV, said the company provided thousands of hours of on-demand content to Virgin, with viewings of its programmes, such as Taskmaster, via the service up by a third over the year“, finally we need to add the part mentioned much earlier in the story. With: “The BBC holds back the video-on-demand rights to its programming, instead selling them to players such as Netflix. Virgin Media said this strategy was no longer acceptable as viewers expect to be able to watch shows on demand” we see a linked part in all this, and perhaps also the part where Virgin Media dropped the ball. You see when we see ‘viewers expect to be able to watch shows on demand‘, which I thought was a silly thing to mention, because of the mere fact that Virgin Media was unable to manage the expectations of their customers is a much larger fail. It is a first duty in support and customer care to manage expectations, some use SLA’s, some use other methods (like pricing), but managing expectations was never on the plate of UKTV. We can argue in addition that as viewing was up by 34%, fees would go up, but in addition, so would advertisement revenue. When you report that programmes are watched be an additional 34%, you have an advertising selling point. The question becomes was this merely about fees?

The BBC mentions the Netflix challenge, as well as a picture of a relaxed Greg Davies sitting in a chair (who is apparently no longer trying to destroy the city of Tokyo). Yet the article gives us two points, the first is: “On Twitter, Darren Woodward said he was “gutted” not to be able to see Taskmaster, while Tom Langdon was one of a number of subscribers to wonder whether his monthly bill would be reduced because they could no longer watch the show“, and the second is: “Richard Blunt from Birmingham told the BBC: “Practically all the stations we watch on Virgin have now been withdrawn. I think we will give it a couple of weeks, hoping that the decision is reversed, before deciding whether to stay or to go.”” The entire setting could now escalate in very different manners, not all good for Virgin, actually none of them good for virgin. Even as the Guardian article ends with: “The 10 channels are still available on other TV platforms including Sky, BT, Talk Talk, as well as Freeview and Freesat. Viewers can also watch them online via UKTV Play“, we need to see that this is merely a first step. I personally believe that UKTV has figured out a few things and in this, it has options that go further than merely a fee. The fact that 4 million users are in a setting where there is 34% growth, that is a section that Netflix (and others need), so this is not merely about money, I believe that there is a shift happening. I knew that this would happen, that part is clearly seen in the Netflix pressures. That we would see it shown the very next day was not on my calendar.

So when I decided to dig a little deeper, I found an article (at http://www.gizmodo.co.uk/2018/07/uk-tv-networks-are-looking-at-creating-a-british-netflix-to-combat-falling-viewing-figures/), which gave us 5 days ago: ‘UK TV Networks Are Looking at Creating a ‘British Netflix’ to Combat Falling Viewing Figures‘, so was that a self-fulfilling prophecy or not? So as the article ends with “BBC News reports that the BBC, ITV and Channel 4 have already had early conversations about the possibility of working together to create a combined streaming service with the potential to compete with the likes of Netflix and Amazon Prime TV. Whether such a thing will come to fruition currently remains a mystery, but considering the shifting trend to online media, it seems a likely step that broadcasters will eventually have to take to remain relevant“, we see exactly the play that seems to be unfolding now, and from the pressures shown, there is every chance that through pressures applied, this new venture starts with a rather delicious slice of 4 million viewers leaving Virgin. Even as some stated that they will see in a couple of weeks, the sooner this shift happens, the more power Virgin loses, implying that Netflix will not merely grow business, it has the option to grow an advertisement branch much larger overnight as well giving them more options.

Even as we agree that some changes are about to happen, we need to realise that the UK will have a new venture in ‘package deals‘. The quicker that Sky TV and other shops include the UKFlix side of things, the quicker momentum can be gained. It is in this setting that it can grow in the UK as well as gain momentum in Western Europe, where UKTV has always found happy recipients of the series that UKTV fathered and promoted.

It does set a new tone on where places like Virgin Media are going. The UK always had a little saturated niche in all this, the fact that the Netflix equation unsettled the walls in place making it a dog-eat-dog battle field, is both good and bad, the good is that overall the pricing will become interesting to households, the bad is that those with the larger budgets can overturn whatever independence remains. It will be a fight where those with the biggest wallets will be able to out buy whatever is in play and that is not always the positive outcome for households on a budget. The issues that follow soon after that is as one is diminished, how far can it go abroad? The direct setting for the Netherlands, Belgium, France and Scandinavia is also added to the board, because a shift like that tends to move outside of the borders. for example in Sweden where 50% is set by SVT1, SVT2 and TV4 gives options for growth, especially when you consider that Disney and Fox each have less than 1%. The same we see in Norway where 50% is with NRK1 and TV2. They are all markets with options for growth; from an advertising view Norway is more of a nightmare. The two large cities merely represent 14%, whilst the villages 11^th in size and smaller are less than 50,000. This is different in Sweden where the four largest cities are 25% of the population and a chunk of the smaller places are still a lot larger than most places in Norway, Sweden has twice the population, but they also have that population in larger communities. These are all elements that have an impact on growth, so that is one side and merely one side. You see Netflix and their methods are rubbing off on the other players and that is where Scandinavia becomes a much more interesting market. The land that gave us Maj Sjöwall and Per Wahlöö and their fiction in the 60’s and 70’s; the land that had Pippi Longstocking and the White Stone for the kids, whilst giving the adults Beck and Swedish Dicks is a treasure trove of IP and that is very much on the mind of the decision makers behind the screens. You see, getting the right IP is half the distance towards profitable series, and there is plenty to find in places like Scandinavia and Australia. They have built quite the score list. That setting needs to be on the forefront of all the board member minds. Getting decent writers for new series is one thing, resettling an existing gem comes at 40% less cost, whilst upgrading a series to today can score places like Netflix millions of viewers with minimum expenditure, when we consider the 8 billion that they are setting in now, delaying one series and replacing that with 10 retrenches that are unknown in the bulk of their places is a way to quickly fill needs, to up the amount of IP and the value it represents as well as open up new doors to other ventures. You merely have to see the impact of the TV series Humans, which got the makers the British Academy Television Craft Award for Best Digital Creativity, as well as a 94% rating is what matters to those in the boardrooms and even as they missed out on Humans, there is plenty to find in some of these places. The relaunch in Sweden of Beck is one part, getting that to the Netflix audience is potentially an additional market to tap in to. In the end, merely buying IP is an option and I personally see is again as short sighted, it is the interaction and engagement of these markets where new innovative IP becomes an option. You merely have to look at the past on the history of the 70’s series Kung Fu to see that the creation of IP that shines for decades is seen. And they are not alone, especially when it comes to TV series for the younger viewers. Sweden had several series like the ones mentioned earlier, the Dutch had the still immortal ‘Kunt U mij de weg naar Hamelen vertellen meneer?’ loosely based upon the ‘Pied Piper of Hamelin’, even as the materials were lost over time, that TV Series is still remembered 48 years later, that’s IP that sets a provider apart from all the other players! As such growing interactive markets, not merely acquiring IP, whilst at the same time investigating what IP is close to readily available is what pushes the Netflix investment invoice of $8 billion a year down, whilst creating content that will be around for a long time. As I mentioned in yesterday’s blog ‘Chivalry vs Rivalry‘ (at https://lawlordtobe.com/2018/07/22/chivalry-vs-rivalry/), we need to consider “The value of those rights has now spiralled, which has pushed up Netflix’s content budgets and fuelled its drive to produce its own content“, that is still going on, so the one moving fast into areas and setting the stage to acquire the IP, that is where it will be at in 3-4 years, so whomever moves now ends up having the home field advantage, giving additional rise to production settings that are currently a steal at twice the price, yet as the impact of digital content and growth becomes more and more visible, the other players will circle their wagons faster and more determined to get either much better prices, or become players in this field themselves. the moment that all this IP hits 5G and goes global, at that point the entire game changes for all the players involved, so getting there sooner is what it will be about and from what I personally expect that visible push will be all over the news with some frequency no later than 2019.