TV and Video: A triumph of diversity over dominance

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TV and Video: A triumph of diversity over dominance

How the Dutch TV and video market could become even more competitive

Although some of the world’s biggest companies are pushing into the Dutch TV and Video market, they may struggle to carve out a dominant position. In fact, the Netherlands may be served by a highly-fragmented online entertainment ecosystem, as consumers need to switch from platform to platform in pursuit of the content they enjoy.

This is the fifth blog of our blog series on the future of the Dutch TV and video market. You can also read our first, second, third and fourth blog.

Lost in diversity scenario

Exploring what could happen between now and 2030, this “lost in diversity” scenario is one of four potential scenarios described in our study, which is based on an analysis of a comprehensive set of almost 100 social, technological, economic, environmental, and political drivers shaping the TV and video industry. This scenario envisions that Dutch consumers will be served by a profusion of distribution platforms, offering a rich variety of content, delivered by a large and ever-changing cast of market players. In other words, the balance of power in the TV and video market would swing somewhat towards smaller platform players focused on regional and local tastes, rather than being dominated by global platform players, such as Netflix, Amazon and YouTube (see scenario 4 in the graphic).

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In this scenario, content producers stick to what they do best, leaving distribution to others. Those content companies, such as Disney, that have expanded into distribution, retrench. Instead, they focus on supplying drama, films and documentaries to a wide range of platforms, including Netflix, Amazon Video, Apple, YouTube and local platforms, such as Videoland, NLZIET and Pathe-Thuis, as well as platforms controlled by national broadcasters, such as Talpa, NPO and RTL. The local platforms will be competitive, as the economies of scale of global players, such as YouTube, are curbed by strict copyright rules and enforcement that prevent them from showing live sports clips or music videos in multiple markets. Sustained success in “the lost in diversity” scenario will depend heavily on creativity and insights: in a hyper-competitive market, akin to fashion retailing, content producers and platforms will need to stay on trend.

 

Local players buoyed by strong demand

As demand for local news, sport and drama remains strong in the Netherlands, the global platforms will need to partner with content producers, such as Talpa, Endemol Shine and other local content producers, that are focused on the Dutch market. Indeed, companies that own the rights to compelling or fashionable content, such as live sports or a popular film or TV franchise, will be able to play the platforms off against each other, ensuring that no one distributor can become dominant.

Local broadcasters will also benefit from continued demand for some linear television, such as live sports events and reality shows. However, broadcasters that fail to establish their own platforms may have to enter into partnerships (and fund co-productions) with global digital platform companies. 

 

Detailed data will drive content discovery

Both the platforms themselves and leading telecoms operators, such as KPN, VodafoneZiggo and T-Mobile, will provide consumers with content navigation and discovery services, across both long-form video, such as movies and drama, and short-form content, such as sports highlights and music videos. To play this role, the telecoms operators will need to ensure they can access the meta-data of the content supplied as well as the data what their customers are watching. This data partially comes from their own systems however they also need partnerships with the platform / content companies to receive the required data.

If they can properly leverage detailed data on consumers’ behaviour to make targeted recommendations and support personalised advertising, the telcos could become key intermediaries in the business-to-consumer market. Acting as super-aggregators, the telcos will help structure the market for consumers by providing a cross-platform perspective and related recommendations.

In this diverse and dynamic market, advertising agencies will play a strong role, systematically allocating advertising budgets and guiding brands through the complex TV and video ecosystem. Increasingly staffed by technologists, media agencies will use machine learning and specialist data analytics skills to take advantage of the personalised advertising capabilities offered by the platforms.

 

Regulation plays a pivotal role

This scenario is underpinned by national and EU regulators’ focus on preserving local content and media companies. Supportive regulation would enable national broadcasters and content providers to compete against the digital and financial muscle of the large global digital platform companies. For example, public broadcaster NPO could benefit from generous subsidies and rules allowing it to show certain high profile sports events. At the same time, rigid content quotas would help to maintain a healthy pipeline of local drama and films. Regulators may even go as far as preventing local players from being acquired by the global platforms. 

Although plausible, the lost in diversity scenario is just one of four possible scenarios that could play out in the Dutch TV and video market over the next decade. In the other blog posts in this series, we consider the three further scenarios outlined in our report, outlining how they could play out in the Netherlands. 

More information on The future of TV and video?

This blog is part of a series on "Future of TV and video". You can find the previous blogs here: 

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