BY BOB JENKINS In 1953, the English writer, L.P. Hartley opened his most famous novel, The Go Between, with the observation: “The past is another country; they do things differently there.” Today, he could as easily have been speaking of the future of the content business, due to a combination of a growing worldwide financial crisis and new media inroads. Revenue streams will not only be shrinking under recessionary pressures, but they will also be moving, sometimes dramatically, between platforms and business models under the influence of technological innovation, which is, right now, changing forever the way in which content is consumed. In the future, the industry will have to do things very differently. This, of course, begs many questions, two of which are, which genres will change favor, and which will tomorrow’s altered universe condemn? Some of the answers are fairly predictable and others much more surprising. But of no surprise to anyone is the fact that virtually everyone VideoAge has contacted for this story thinks the genres in which they are grounded will be fine, and that, consequently, there is a great deal of disagreement as to who will prosper and who will suffer in the future. Tobias de Graaff, director of Global Television Distribution at the U.K.’s ITV Global Entertainment, said he believes that the future is secure for “long-running drama franchises such as Heartbeatand Coronation Streetbecause they cost less to market than a brandnew short-run series, they are well known, their place in the schedule is secure and they have a loyal fan base.” De Graaff also said that “high-quality drama will always continue to travel well,” adding, “we are finding that big channel brands are now attracting a higher price as broadcasters are in competition with each other to secure ratings winners.” In contrast, Patrick Svensk, CEO and president of Zodiak, which has headquarters in both London and Paris, saw a dim future for “high-end programming,” saying, “it is bound to suffer. At the very least such projects will take a lot longer to get greenlit.” A growing focus on the cost of programming is one of the easier predictions to make about the future of the entertainment business, which probably explains why everyone is making that prediction, while simultaneously laying claim to having exactly the low-cost, ratings-gathering content all broadcasters will be looking for in the immediate future. Speaking at the press conference called to announce the organization of all the many production brands, including Marathon, Diverse Productions, Magnolia, Mastiff and Mastiff Media, YS Film, Tele Images, and many others now owned by Italy’s De Agostini Group under the Zodiak brand, Svensk’s colleague and svp, Fiction, Pascal Breton commented: “In the coming economic downturn libraries will be very important, especially in the digital arena.” Of course, De Agostini now has one of the largest independent libraries in Europe, and Breton went on to note that “the demand for content will not evaporate, but the budgets available for acquiring this content will, if not evaporate, then certainly come under pressure, and so the ability to meet a high volume demand at a low unit cost will be very important.” Meanwhile, Natalie Humphries, the recently appointed head of Factual at U.K.-based Shine Reveille, celebrated her new position by lauding the relatively low cost and proven ratings success of factual programming over genres such as drama and entertainment, claiming to know of several such projects being cut back while actually in production. ITV Global’s de Graaff by contrast, claimed: “We all want to turn on our TVs to switch off from the doom and gloom, and so well-made, uplifting, humorous programming will be a definite winner.” But predicting the winners and losers in the new world that awaits is a much more complex matter than some of the temptingly straightforward arguments currently being aired might suggest. For one thing, some genres, such as sport, seem to be impervious to costcutting pressures. There might be a recession on, and advertisers might be deserting free-to-air channels in droves, but they can still find big budgets when they have to. At the end of November, Formula One racing supremo Bernie Ecclestone unveiled a new sponsorship deal with Korea’s LG Electronics for an undisclosed sum, but one that the company itself was quoted as putting in “the tens of millions.” At the same time as Ecclestone was celebrating his news in Seoul, the International Olympic Committee was rejecting the latest bid from the European Union for the Summer and Winter Olympics of 2014 – 2016. The amount bid was not disclosed, but it has been widely reported that the European Broadcasting Union paid in excess of $700 million for the 2010 Vancouver Winter Olympics and the 2012 Summer Games in London, and so, whatever the sum rejected actually was, it is a safe bet that what it wasn’t, was cheap. Other than its obvious universal appeal, another key value of sport is its ability to perform across many different platforms. The importance of a genre’s ability to do this is neatly underlined by New York-based accounting firm PricewaterhouseCooper’s “Global Entertainment and Media Outlook: 2008 – 2012,” an annual report analyzing the global media market. In it they predict subscription television revenues will increase by a compound annual rate (CAR) of 9.3 percent, hitting a total $214.2 billion by 2012, video-on-demand is set to rise by a CAR of 23.5 percent reaching $12 billion globally by 2012, and pay-per-view by 4.9 percent, CAR peaking in 2012 at $5.3 billion globally. Anything celebrity also seems like a good future-proof bet. U.K.-based Channel 4’s Big Brothermight no longer gain the nine million-plus audiences it once did, but at an average of 3.2 million over its last run it easily outperformed the news with an average of 800,000 and property shows with averages between 2-3 million. At the polar extreme to celebrity, business news and its reporters are enjoying an unprecedented jump in popularity with comScore Media Metrix, a U.S.-based Internet audience measurement firm, reporting last September a year on year 30 percent jump and nine percent month to month climb in visitors to financial news and research sites, while in the same month cable/satellite TV network CNBC reported a 20 percent audience increase and the oneyear-old Fox Business network, a jawdropping 127 percent increase in the U.S. To conclude with some bad news, it can be said, with the exception of those lucky enough to have very well established major brands, kids programming is one area likely to see a lot of suffering. But more critical to kiddie programming’s future well being is its heavy dependency on retail sales of ancillary products, not an area many analysts tip for immediate growth potential. But, as L.P. Hartley would undoubtedly say, let’s first hope we’ll all reach the place called the future. V I D E O • A G E JA N U A R Y 2 0 0 9 14 P r e d i c t i n g T r e n d s The Content Biz Gets Chaotic Under Stress ITV Global series Heartbeat Patrick Svensk, CEO and president of Zodiak ITV Global Entertainment’s Tobias de Graaff
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