The Unsettled Pathology of Traditional Television

Michael Hedges September 24, 2018 Follow on Twitter

Psychology plays an outsized role in business, more so in media. With fad and fashion studied as seriously as physics, the media sector looks for flashes of light and, of course, darkness. Those visions are decorated from the sidelines; the advertising people, the investment bankers, the shareholders, the politicians. Many thrive, truly, on these flashing lights, a certain relief in the chaos. Psychologists have a name for this.

Last week the US television industry gathered for the 70th annual Emmy Awards. Media watchers around the world always take this event very seriously, analyzing everything for the next big thing. It wasn’t difficult to find. Subscription video on demand (SVoD) producer and distributor Netflix tied premium cable network HBO with 23 primetime Emmy Awards; the first time in nearly two decades HBO did not dominate the awards. Amazon Prime’s hit comedy “The Marvelous Mrs. Maisel” won five Emmys that night. Broadcast TV was, almost, nowhere to be found. Entertainment industry trade journal Variety (September 20) called it “an accurate reflection of an unsettled industry.”

Netflix is, obviously, a big deal in TV-land, which is, of course, everywhere. The name is now synonymous - euphonious - with streaming video; like Google for search or, once upon a time, Xerox for photocopying. It has become a verb. Despite notable - and brilliant - contributions to TV land, Amazon is known for something else, online retail. As Curly (Jack Palance) said to Mitch (Billy Crystal) in “City Slickers” the secret in life is “just one thing. You stick to that and the rest don’t mean shit.”

Broadcast executives did not need another reminder that the streaming media - video and audio - tide has risen. In the frantic scramble to keep one step ahead of the cold waters - at least until retirement benefits kick in - they are turning to compacts of dubious legality, mergers (or de-mergers) and regulation (or de-regulation) to maintain resistance. Most of all they want victimhood. The behavior sometimes appears schizophrenic, which is all part of Netflix Derangement Syndrome.

Not usually given to frenetics, UK public broadcaster BBC general director Tony Hall told the Royal Television Society Netflix and Amazon should be taxed and regulated like other broadcasters. “While it looks likely other companies are taking over nationally, the BBC has had its funding cut. We need to find more money,” quoted by the Guardian (September 18).

White noting that Netflix and Amazon spend US$13 billion on original and commissioned series and only 10% of that going to UK-produced content, Lord Hall argued, “We cannot allow any further narrowing of distinctive British content, or its crowding out by better and better-funded overseas competitors.” He also warned of a brain-drain: “Some talent is going to go to Netflix, Amazon and Apple.”

A few days earlier French public broadcaster France Télévisions president Delphine Ernotte said no longer would the broadcaster sell shows to Netflix. "It is imperative that French (producers) keep the exclusivity of their productions,” she said to Europe 1 (September 16). "If we want to keep strong French and European (television), broadcasters must master distribution.” She also warned of French viewers “becoming addicted” to Netflix.

An alliance among France Télévisions, TF1 and M6 (RTL Group), to be called Salto, was agreed in June to develop a French streaming portal. A previous tie-up to tie-down Netflix with France Télévisions, Italian public broadcaster RAI and German public channel ZDF was proposed earlier this year. It quickly disintegrated.

It has long been reported that Netflix’ subscriber base in the US is stagnating, at least not growing at the rates that enthused VCs and stock traders five years ago. Growth, demanded by shareholders, will come elsewhere. International subscriber growth for August was five times that of domestic US growth; 4.47 million versus 647 thousand. Europe is an obvious target. But so is Latin America, India and China.

European production houses are not complaining. For them, tis the season to be jolly. “Revenue from (streaming video) commissions, largely from Amazon and Netflix, was up 19% year-on-year at GBP150 million,” reported industry trade newspaper Variety (September 4). “Netflix has boosted its UK presence, with commissioners now based in London, and was the single largest contributor. Amazon is also commissioning out of the UK as is YouTube.”

"Netflix is one of a kind,” said huge European publisher Axel Springer chairman and chief executive Mathias Döpfner on being named to the Netflix board of directors (September 18), in a company statement. "It has created a world leading entertainment service that continues to break new ground for the benefit of creators and consumers. A radically innovative culture and governance are essential parts of its success, and it is a tremendous pleasure and privilege to be part of this journey.”

Foiled at attempts to enter the German television market by acquisition Herr Döpfner gambled on digital media, notable in risk-averse Germany. Axel Springer embraced digital-native publishing and paywalls, even opening a Silicon Valley development center. He once described the Silicon Valley founders as “the rock stars of our time,” recalled German daily Suddeutsche Zeitung (September 19), comparing leaders at Apple, Amazon and Facebook with the Rolling Stones and the Beatles. Netflix chief executive Reed Hastings expects to tap his “important insights for expanding and improving our global offering.”

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