A preemptive post-mortem to help create the future of Australian TV streaming

Last week I wrote a piece on why I felt a unified/united TV streaming service in 2024 remained a good idea for the main FTA players - 9, 10, 7, ABC and SBS.

Not everyone agreed. Some people think it's too late. Some people think it's too hard. And some people think it's just flat out not that smart.

But a lot of people messaged me privately, many active participants in the current TV/screen world, saying they felt it was a good idea and an opportune time.

Last weeks piece on a unified AU TV streaming service

One reason I believe the idea stacks up is via running a pre-emptive post mortem on what would have to have happened if YouTube and the streamers in say 10 years had gobbled up the entire local TV revenue and market. What would have been the moments that led to disaster? (note these are hypothetical and could happen)

So what would a post mortem look like in a decade and what would be the moments that really hurt?

1. Networks fighting one another eroded advertiser confidence in the total category

Brinksmanship between networks is a fun combat sport to observe (and no doubt to play in), but it's often driven by participants who think they're still in a fight with 2 or 3 other players. This isn't the case - networks are now the underdog and the issue is less who won the quarter and more around the future survival of all of them, period. TV has a great story but it can't tell that story in a credible way if it wants to spend time and resource arguing over how to carve audience data to get one up on a peer at another network. The consensus for the Future of TV was that it was one of the darkest days for TV in recent times, which is a shame when the participants have very positive stories to tell.

The networks are much more powerful together telling a complimentary story and an integrated one. One that focuses on total viewers and the strength of the total medium. The contribution of that industry to jobs, tax, production, news. The depth of catalog content, the delivery of sports etc. Streamers never talk ill of one another - they realise collectively a strong SVOD industry benefits all. YouTube focuses its attention on going after TV too. TV spent years going after Meta but in reality it should have been targeting YouTube much harder.

If the networks continue to battle, this will erode the credibility of the category.

2. Lack of salience and clarity on individual BVOD streaming products stopped growth and adoption of the category

As a collective the BVOD players are a significant force when it comes to usage and consumption. Collectively there is a rich story around engagement, data, cross viewing, depth and breadth. The main 5 collectively are a big deal for all age groups.

Individually it is very hard for one brand in particular to become as big a deal. The depth of content isn't there. There's 5 installs. 5 logins. Constant chopping and changing. it is hard for users to have a clear and salient understanding of each brand and what it wins on. So the salience becomes programming based - which is fine, but it does create reliance on specific programs. A Netflix has salience on both programming and overall USP. YouTube is the everything streamer for every audience.

A lack of salience and clear USP of each will result in slow/no user growth. This will continue to erode share both in viewing and also in minds.

3. Perception that measurement failed to keep pace became dominant

For 5 years the TV industry promised a lot more in VOZ than most would say it has delivered. The delay was for real reasons - but the time lost in creating what they felt was an excellent product was more costly than delivering a good/useable product back in 2019. This didn't matter in 2020 and 2021 when COVID bumped TV spends up, but it's hurting now and will continue to unless the next step change in innovation can occur asap.

The rub is that VOZ is still better than what everyone else is delivering. The optics don't match the reality.

If the view in 5 years is that streamers offer comparable/better reporting, this will be a challenge.

4. BVOD user growth stalled, leading to investment declining at individual company level and content moat for streamers and YouTube

BVOD had a growth story for 5-7 years and it was a pretty clear one to understand. It also kept attention away from linear declines. Now that growth has started to slow (I would argue due to lack of salience and awareness of specific BVOD products) and the story has become one of a medium in decline again.

Stalling growth at the individual company level, particularly for locally listed business, will inevitable create pressure to reduce opex/capex. This will hurt BVOD products the most as they are the most exposed to global forces and cashed up technology giants.

The BVOD category is also trying to maintain 5 seperate platforms, with 5 seperate teams and technology stacks. It is wildly inefficient when viewed through the lens of creating a single streamer. I would argue no network in Australia can continue to afford to do this in the face of such massive global R&D spends.

If investment in on demand content and technology doesn't keep pace (in a relative sense) with global competitors, this will be another contributing factor.

5. App fragmentation created high and increased frustration, power of operating system aggregators grew and users became conditioned to 'search engine' like behaviour

My view is no user likes accessing 'TV' via 5 different apps. And what it does is give the operating system aggregators the real power. Think Google, Roku, Samsung. In their ideal world they become the new network and everyone else is just content providers that they are paid to push to. Without government intervention it's hard to see these platforms keeping local BVOD apps on their main screen as a default, and without government intervention it is unlikely that these platforms don't use their power imbalance to ask for a cut of the ad revenue that runs via their TVs.

The platforms will argue this aggregation is a better user experience, because in the face of loads of point apps aggregation definitely is. They will also argue it's impractical to ensure front page presence of every FTA app in Australia (because it is due to the fact there's only so many spots). One point of entry could help this - it would improve the leverage of the collective networks to demand homepage presence, and it would provide leverage to negotiate against a revenue share model on advertising (as no TV could be credibly sold without having the combined FTA app on it)

Also, Google as the controller of the platform is both master and competitor. The data Google gets can power YouTube, and it's hard to believe that any business isn't going to prioritise their own offering at the expense of others.

The predominant revenue model of tech platforms is pay to access - search is a pay for traffic model, Facebook and Instagram is ultimately the same. There's no reason to believe the control of TV interfaces will create a different revenue model than gatekeeping rents.

6. Fragmented investment in content created loss of key programming to streamers

Fragmented investment in content and networks bidding against eachother will eat up valuable financial resource. Collectively these players have much more leverage and resource to bid on key content, and competition wise it's fair as they are competing against a tonne of real competitors.

It's unrealistic to think that a network individually can invest the amounts needed into VOD specific content at the scale the streamers and YouTube can. Fragmentation of content investment can create low demand programming that doesn't scale and doesn't create positive financial returns. Streamers can take bigger bets and outbid individual BVOD services.

7. TV Incumbents moved away from defensible core into indefensible non-core areas

Local TV networks are the absolute best at 2 things - selling advertising and creating high scale, high demand local content. These are the absolute core of their businesses and they are super important. They are not technology businesses and being seduced into competing in this area. Intl streamers shouldn't be able to compete in these areas as they don't have the field sales force, market knowledge, relationships in advertising, and they don't have the decades of knowledge on local content creation and market understanding.

If local networks are seduced into trying to compete with global streamers and technology companies in the tactics the tech companies are comfortable in (automation, AI, surveillance targeting, technology, programmatic commoditisation, perception of attribution) they cannot win.

8. The TV is dying trade media narrative became all consuming due to lack of disruptive/innovative counter

The TV is dead chatter is false but it's very loud nonetheless. The response from the TV industry is either defensive to the claims, or can be defensive against the peer group (everyone else is shit but not us) but it's generally from a place of having to defend incorrect claims.

Streamers/YouTube never have to really defend. They get a pretty decent free kick from the marketing world and any of their significant missteps around privacy/market power generally never get the oxygen needed to land. One of the reasons is they can counter negative press with a positive innovation story. They can be the disruptors and the innovators. Breaking the old models. But the reality is they've broken those models and now they're no better than the incumbents in ensuring the status quo remains unchanged (the status quo being platforms have all the power, the data all belongs to them, you pay them for user access, the internet remains largely closed)

It doesn't matter that the majority of talk around TV is incorrect - the wilder the claims the more interesting they are. The misperceptions around what people consume (i.e. it's all streaming, no one watches TV unless they're old etc) only help the current dominant businesses.

These drivers haven't happened in full yet. Some haven't happened at all, some are beginning to happen. But none are at the stage of no return. A single streamer would be an effective way to negate these and provide providers with the best chance of thriving and even winning the screen battle in the future.