European TV networks looking beyond broadcasting and fine tuning their OTT strategy


Florence Le Borgne,
Head of the TV & Digital Content Practice, IDATE DigiWorld

The creation of a pan-European alliance in mid-January between three major commercial TV companies – ProSiebenSat.1, TF1 and Mediaset – around OTT video specialist, Studio71, is a strong indication of veteran players’ new strategies, built on international partnerships and digital diversification.

Traditional TV networks are having to contend with a whole new landscape: one where the competition, the screens and even the consumers have changed, and where longstanding business models are now being threatened. They have no choice but to evolve as well, to hold their own amidst this groundswell.
Every major media company has therefore developed – either voluntarily or in reaction to competition – an OTT strategy that typically includes distribution online, on mobile devices and on televisions via connected devices.
Approaches nevertheless vary from player to player.
•    All now offer catch-up TV services, which may include the ability to simulcast linear programming.
•    Few offer transactional VOD services, regardless of whether they offer just their own content or broader libraries.
•    There are a good number of monthly subscription VOD plans available, but this encompasses a wide range of products:
o    generalist SVOD services;
o    thematic SVOD services ;
o    OTT versions of premium channels;
o    Or paid access to simulcasts of linear over-the-air networks (with catch-up offered for free).
•    Lastly, a few players are developing an OTT strategy that is built not on their usual content, but rather on creating original content that will be distributed solely online.
It is into this last category that the deal announced on 12 January falls, whereby France’s TF1 and Italy’s Mediaset have acquired, respectively, a 6.1% and 5.5% stake in Studio 71 – a subsidiary of German media company, ProSiebenSat.1, created in 2013 – worth a total of around 53 million EUR. According to the Mediaset press release, this alliance is being formed “with the aim of creating Europe's most important operator in digital talent in close synergy with generalist television”.
Distributed on the leading video sharing platforms, the content supplied by Studio71 generates more than 6 billion views a month on YouTube alone, through more than 1,200 channels, and reports 405 million registered users worldwide. For TF1, this new deal is geared to allowing the French media company to become “a benchmark online video player in France across all platforms by developing content targeted at millennials”. This generation of viewers has become a prime target for the French conglomerate which already acquired a majority share of Minute Buzz in December 2016, and is heavily focused on building up its social media presence to reach younger viewers.
Faced with the threat that Netflix and Amazon represent on the international online video scene, this European partnership will enable the three commercial TV broadcasters to go after revenue outside their traditional field of operation, by combining the strength of local brands and Studio 71’s global audience. This deal should thus enable TF1 Publicité (advertising) to shore up its ability to reach new audiences, and to consolidate its position as “France’s No. 1 content marketplace”. Similarly, Mediaset – for which this deal is the first major move from its new digital division – views this alliance and an opportunity “to maximize the distribution of Mediaset TV contents on internet and to boost synergies between TV and web.”

synthese_positionnement_OTT_groupeProsiebensat media SE

Another noteworthy move comes from Scandinavia’s Modern Times Group which, on 25 January, announced that it was selling its share in Czech free-to-air broadcaster, Prima, in order to finance its investments in the group’s digital transformation, starting with increasing its stake in German online game developer, InnoGames, from 21% to 51%. According to MTG President and CEO, Jørgen Madsen Lindemann, “The investment is in line with MTG’s digital strategy to invest in relevant, complementary and scalable digital content and communities. It creates a third digital entertainment vertical for MTGx alongside its eSports and MPN businesses”.
If these areas of diversification are still far from rivalling these European heavyweights’ traditional businesses, the growing number of strategic actions targeting OTT video is a clear sign that veteran TV networks are looking beyond broadcasting. Their future is inextricably bound up with the shift to OTT and building a global footprint: to continue to exist locally, they need to think globally.

To delve deeper into leading media companies’ OTT strategies, check out our latest market report

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