The television will be revolutionised
Welcome to Unmade, mostly written in rainy Horsham, while you were sleeping on Thursday morning.
Happy Pretend to Be A Time Traveller Day.
As I mentioned earlier in the week, at this stage of figuring out what Unmade is, my plan is to publish two longer, more analytical pieces per week, on Wednesdays and Saturdays. So this will be part of that new rhythm.
Today’s edition is for paying subscribers. Those who haven’t signed up to the paid tier of Unmade will hit a paywall further down this article.
For the next nine days only, an annual subscription to the paid tier of Unmade is available for just $169, a saving of 74 per cent on the normal $650 price. That will never be as low again.
Today: What Ten’s plans for Pluto TV say about the state of the television market; Buzzfeed’s float flop; SCA’s Kinderling purchase; and harassment in adland.
Planet Pluto
Initially, I thought I’d found an original headline for today’s newsletter. Remember the Gill Scott-Heron song The Revolution Will Not Be Televised?
It turns out I’m not the first to have thought of it. Google offers more than 1,500 links to articles containing the phrase or headline “The television will be revolutionised”. And another 1,600 links to the phrase “The television will not be revolutionised”, including the time I used it on Mumbrella back in 2015. If you’re going to plagiarise, you might as well do it to yourself.
On that occasion, I was analysing the emerging view that the television industry might not suffer the catastrophic consequences digital media was wreaking on newspapers and magazines. Broadly, that has indeed been the case, even if broadcast audiences aren’t what they used to be.
Take last Sunday, for example. There was not a single TV show broadcast to more than a million viewers. According to OzTam, the most watched program of the day was Seven News, with an average of 936,000 viewers across the five capital cities.
Compare that to a decade ago. Seven’s top rating Sunday night news bulletin was delivering at least 1.3m, at least 30 per cent more viewers than now. And in a big week, Sunday entertainment shows could draw 2m overnight metro viewers.
That was before the arrival of the subscription streaming services, which kicked off seriously in early 2015 with the launches of Stan and Netflix. Has it been nearly seven years already?
However, although that meant more competition for viewers’ attention in an already fragmenting media landscape, the absence of advertising on the streaming platforms meant that television’s commercial dynamic was hardly affected.
But now the rise of ad-supported video on demand is finally starting to have a real impact. And next year’s launch of Pluto TV, by Ten’s owner ViacomCBS – revealed in yesterday’s Unmade podcast – has the potential to change the balance of power.
Over the last decade, Ten – always the third player – has fallen further behind as it slowly recovers from the strategic void created by Lachlan Murdoch’s failed attempt to take control.
Wider trends are now coming into play. And they will rewrite the game.
If the launch of Pluto is as well executed as it has been in other markets, the company will rejoin the current two-horse race between Nine and Seven for screen dominance. Indeed, there’s every chance that the company could emerge as the dominant player in ad-supported video on demand (AVOD).
Viewers have surprised even the TV networks with their appetite for AVOD.
The rise of the subscription services was predictable before they launched locally. Netflix’s overseas success made clear that consumers saw the value in subscribing to a library of content rather than having to buy or rent. The threat at this stage seemed to be more to the premium priced Foxtel broadcast offering.
Less of a surefire thing was how the existing commercial players would fare as they moved into streaming themselves.
And just as streaming divides between the subscription and the ad-supported services, for the big commercial players AVOD then splits between “live” and on-demand.
I put “live” in quotation marks, because this terminology is being used by the industry to refer to streaming of the network channel as it airs.
And on-demand viewing has included both catch-up viewing of recent network content, and library content.
The terminology is ever-changing, by the way.
If you listen to yesterday’s podcast with Ten’s Rod Prosser, he gently corrected me at one point, to say the industry’s preferred terminology is now AVOD, rather than catchup.
In turn, another TV executive I spoke to after uploading the podcast chided me for using the term AVOD, saying the commercial TV players in fact prefer BVOD, for broadcast video on demand, because this distinguishes them from the likes of YouTube’s user-generated content.
And Prosser’s ultimate boss, ViacomCBS’s global president and CEO Bob Bakish, now prefers yet another acronym: FAST – standing for free ad-supported streaming television.
There’ve been a couple of surprises on how it’s unfolded.
First, the networks have been surprised by how much of their AVOD viewing has indeed been of the live channel, from viewers on devices, or even on smart TVs that might or might not have an aerial input.
That’s bad news for the regional TV players, by the way. As the “great geoblock of Woolongong” test case in 2016 proved, the metro networks can stream their content throughout the country, not just in their own licence areas. Nine’s regional affiliate WIN Corporation had tried to stop the company from doing so but lost the case.
Given the rate of take up, the timeline to the end of a broadcast TV signal is looking shorter than anybody would have predicted. Just as new home owners increasingly don’t bother to install a landline for their phone, householders soon won’t bother to install or replace rooftop antenna.
It will take a while, but at some point, to Australia’s commercial TV players, AVOD will be everything.
Which is where the arrival of Pluto TV gets really interesting.
Although it offers on demand content, Pluto’s main navigation prioritises live channels, and a lot of them. It’s available on the web, on mobile apps and on smart TVs.
In the US, Pluto TV offers more than 200 channels, in the UK more than 150. I paused writing this to have a look what was going out on Monday evening, London time.
You name the genre, and they’re there – factual (think Mythbusters reruns); documentary (Super Size Me); crime (The FBI Files); entertainment (the Duck Dynasty Channel); drama (McLeod’s Daughters). There’s standup comedy. There’s news. There’s extreme sports. There’s even a Cats 24-7 channel. Yes, really.
And all with a light ad load – lighter than broadcast television.
Much of the content is ancient stuff from the archive, but well curated. I’d be surprised if Pluto TV doesn’t launch in Australia with a 24-7 Neighbours channel, for instance.
You can get a more comprehensive explainer of the Pluto viewer experience on Dan Barrett’s Always Be Watching, by the way.
And curation is the key to the Pluto TV model. Back before streaming, I’d be flicking channels and come across a movie and happily start watching it, even though I already had it sitting on a DVD on my shelf.
The Pluto navigation is unlike Australia’s existing players. The nearest equivalent would be Fetch TV’s navigation.
Although Seven has already begun to pursue a genre strategy in its AVOD service 7Plus, it’s not offering the Pluto-style of emphasising channel content.
About four hours ago, I watched a live stream of Bakish speaking from New York to a UBS Global conference.
He talked about the attraction to viewers of Pluto as being a “sit back” experience.
Most of its content consumption is via the channels rather than on demand, he said. Viewers of the same channel might see the same show, but they see targeted ads of course.
If Pluto TV were to launch in Australia it would be a completely different offering to what is already in the market.
Mind you, there’s still a lot to work through.
First, content. Rights deals will be a massive factor. Pluto’s US and UK libraries are impressive. There are 200,000 hours worth of content in the US service. But there’s no guarantee that ViacomCBS will be able to get the same depth of content in Australia. Mind you, this is where being part of a giant global TV-making company makes a big difference of course. It owns a lot of content already.
Second, marketing. Making viewers aware of the service, and persuading them to sample it will be the challenge. Hey, I’ve been in the UK for a few weeks now, and didn’t think to try Pluto until I was going to write about it.
In this morning’s conversation, Bakish flagged that the company has a war chest, or what he described as “a bullet proof balance sheet”. And he claimed that once viewers had sampled Pluto, it became a new habit.
Third, sales. Suddenly CBS’s accidental acquisition of Network Ten in 2017 starts looking like long term thinking. I suspect that the early dynamic will be as an add-on to sales conversations around 10play. But if Pluto takes off, it could well become every bit as big as the rest of the local business.
Bakish made the same point that Prosser did in the podcast, that advertising inventory on AVOD is in high demand. Pluto TV will create more inventory in the Australian market.
Pluto is already commercially significant. This year, it wrote US$1bn in revenue for ViacomCBS in the 25 countries it is already operating. With 54m monthly active users, it’s easily the biggest player in the segment in the US, and already profitable.
I’m not sure this means the end of 10play, by the way. Normally, I’d argue for the doctrine of the best number of brands being one. But as Rod Prosser pointed out in our interview, 10play and Pluto TV are two different services. In the US, CBS still has a standalone AVOD offering distinctive to Pluto TV.
By the way, my sense is that although the Australian launch will be soon, it’s not imminent. Think months not weeks. I don’t think we’ll come back to work from Australia Day to discover a Pluto TV launch. My interview with Prosser was not organised to discuss Pluto, it just came up, initially as a throwaway line, in the conversation. The company would have preferred Pluto did not become the focus quite so soon.
Bakish said this morning that the US-based company is planning an investor event early in 2022 in which it will talk about its international expansion plans. He said: “2022 is about global expansion.”
Watching Bakish’s preso also answered another question for me. A few months back, there was speculation in some quarters that ViacomCBS might look to sell Ten. It wouldn’t have been the first time a US-headquartered company fell out of love with Australia (Buzzfeed, Huffington Post, Pandora Radio and Yahoo are just some of the brands that have scaled up locally then scaled back in the past).
But listening to Bakish today, ViacomCBS owning Ten is completely on strategy. He talked up the company’s multi-platform exposure (broadcast television; subscription streaming and ad-supported streaming) which is mirrored in Australia, and he talked about the company’s renewed focus on global growth.
Interestingly, Bakish also emphasised his openness to partnerships with other media players. The company has signed new joint ventures with Comcast in Europe, with telco T-Mobile in the US, and overnight with South Korean media player CJ ENM. I wonder what a conversation with Foxtel might look like.
I had been wondering why the executives at Ten haven’t seemed more concerned about the network’s poor ratings performance in comparison to Seven and Nine. There hasn’t been the air of panic you might expect when it lags so far behind in the broadcast battleground.
But what they’ve been able to see is the pipeline. With Ten’s broadcast channels; subscription service Paramount Plus, and now Pluto TV, that’s got the makings of a fearsome combination.
If it comes together, there may well be changes in the pecking order.
Buzzfeed’s bust
Speaking of Buzzfeed, the digital publisher finally got its public listing on Monday, on the Nasdaq stock exchange.
Founder Jonah Peretti must be disappointed.
As I write, the company’s share price had sunk for a second day in a row, finishing with a market capitalisation of less than US$300m.
Factoring in $150m in debt, the company has an enterprise value of less than half a billion dollars.
To compare that to Australian media companies, that makes the world’s most famous pure play digital publishing brand worth less than the likes of Seven West Media, and not much more than Southern Cross Austereo or HT&E.
Rather than a traditional float, the company – which includes Huffington Post in its portfolio – joined the exchange via a special purpose acquisition company, or SPAC, which lists as an empty company then acquires its target. At one point there was speculation Foxtel could be acquired by a SPAC, although recent months have seen the SPAC market fade.
As well as the falling BZFD share price, another negative is that most of the SPAC investors used the float to hit the door. So the move on to the Nasdaq didn’t bring much in the way of cash (just $16m) into the company either.
Vast quantities of venture capital flowed to Buzzfeed when we all thought they were the smartest publishers in the room. Now it looks like just another struggling media company scrapping it out on the stock exchange.
SCA’s Kinderling deal
The current pattern of at least one big audio announcement every week continued yesterday with Southern Cross Austereo acquiring kids content house Kinderling.
The rationale of the deal for a company that is making all of its bets in the audio streaming space is obvious. Kinderling already produces children’s digital radio stations and more than a dozen kid-focused podcasts.
But it looks like we’ll have to wait until the SCA annual report to find out the price as – to my surprise – the company did not make an announcement of the purchase to the ASX. If the sum paid was significant, then it would have needed to tell the market. SCA may have either picked up a bargain, or done a more complicated deal than it appears.
Adland still at it
The depressing thing about yesterday’s story in Mumbrella about ad agency bosses’ predatory ways (yes, yes: not all bosses) is that it could have been written at any point in the last decade.
Even after #MeToo, there’s been no moment of reckoning in adland. A major issue is Australia’s defamation laws. Anyone who tries to tell tales faces financially ruinous cost if they can’t prove their claim beyond reasonable doubt in court.
One day there might be a reckoning though. At some point there needs to be hearings, perhaps parliamentary, where people would be able to tell their stories under legal privilege. There are plenty of names to be named.
As always, I’d love to know what you think via letters@unmade.media, or the comment button.
Time to let you go about your Wednesday. Yes, in case you missed it, the reference to Thursday at the top was a lame Pretend To Be A Time Traveller Day joke. And explaining it just in case is lamer yet.
I’ll be joining team Mumbrella for a penultimate time in 2021 for the Mumbrellacast tomorrow, when we’ll discuss Pluto, Kinderling and adland’s predators.
Have a great day.
Toodlepip…
Tim Burrowes
Proprietor – Unmade
