In the brave new world of European TV, the old adage “The enemy of my enemy is my friend” rings true.
Faced with a growing threat from the likes of Netflix and Amazon, players that once regarded each other as fierce competitors have begun forging alliances unthinkable just a few years ago. Rival channels are pairing off to launch joint streaming services. Free- and pay-TV companies are getting together to make direct-to-consumer moves. Pubcasters are hooking up to make big-budget drama.
The couplings can be awkward, sometimes involving regulatory hurdles or clashing corporate cultures. But to the participants, they’re a necessary strategy for survival against deep-pocketed newcomers with global ambitions.
“Anything you do in partnership is harder,” says JB Perrette, international chief for Discovery. “The flip side if you’re a broadcaster is I’m not sure what your alternative is, because hanging on to a belief your linear model is going to live on forever — that’s not going to happen.”
Discovery, one of the first pay-TV channel operators to go global, is spreading its streaming bets. It’s mostly avoiding the supermarket, something-for-everyone approach in favor of setting up specialty services that concentrate on sports, lifestyle and other genres of programming. It has also teamed up with a local free-to-air partner in Germany, ProSiebenSat.1, to create an ad-supported streamer, 7TV. “Linear TV is not dead, but the shifting of viewership to an on-demand world will continue,” Perrette says.
The scramble to claim some of that space is behind other unlikely matchups across Europe. In Spain, the major free broadcasters, RTVE, Atresmedia, and Mediaset España, have launched a joint catch-up platform, LovesTV. In France, pubcaster France Télévisions — whose boss, Delphine Ernotte, once referred to Netflix as the “devil” — has banded together with commercial rivals M6 and TF1 to launch streaming service Salto. France Télévisions has also pacted with two of Europe’s other prestige pubcasters, Germany’s ZDF and Italy’s Rai, to form The Alliance, pooling programming funds and smarts to develop high-end drama.
TF1 chief Gilles Pélisson isn’t as hostile toward Netflix as Ernotte is — his network is partnering with the streaming giant on the series “Le Bazar de la Charité” — but he, too, wants to offer viewers an alternative to the U.S.-driven services. “Everybody knows that Apple TV+ is coming, WarnerMedia is coming, Disney Plus is coming,” Pelisson said at MipTV in Cannes. “To have a local choice like Salto will also be appreciated by the French public.”
Locally flavored original fare is what many traditional players are banking on to give them an edge over the global streamers. The BBC and ITV have launched BritBox, a joint “best of British” SVOD service that boasts more than 500,000 subscribers in North America, has turned a profit and is developing original shows. This year, the two rival broadcasters plan to bring the service to home turf in the U.K.
ITV CEO Carolyn McCall says that BritBox’s new original drama will lure customers to the service and that its archive of classic British shows like “Doctor Who” will help retain them. “The thing going for BritBox is, it’s not American content,” McCall tells Variety. “It’s not Starz, Showtime or HBO.”
The global players are going local with their content as well, but the incumbents produce vastly more homegrown fare. That’s an advantage, as long as they don’t rest on their laurels.
Not all the legacy players are looking for strength in numbers. Some are focusing on solo streaming plans. ProSieben’s commercial rival RTL is conspicuously not part of 7TV. RTL’s parent company recently announced plans to invest about $400 million in its own Europe-wide on-demand programming and services.
“Partnerships won’t work in every country because broadcasters will still be competing in other areas: linear channel audiences, advertising budgets, rights and talent,” says IHS Markit research and analysis director Tim Westcott.
Nonetheless, buddying up has its benefits. One is simplicity. As the on-demand space becomes cluttered with so many options, bundling your offerings with that of like-minded players can make it easier for consumers to find your content.
It can also increase the likelihood that people will subscribe to your platform — not as a substitute for Netflix and Amazon but as an additional choice on the home-entertainment menu. That’s where the real fight now lies, some observers say. “All other services have to try to compete against these dominant platforms and hope consumers add their service as a third,” says Tony Gunnarsson, a senior analyst at London-based consultancy Ovum. “There is space for a
third and, for some, even a fourth and a fifth subscription service, but I don’t think there is much space after this. This is partly what is driving some innovation in bundling services and rivals cooperating to create newer services.”
ITV’s McCall is realistic on that score. She says that the decision to launch BritBox in the U.K. isn’t spurred solely by the advance of the U.S. giants.
“I have never said we’re going to compete with Netflix,” she said at a Broadcasting Press Guild event in London recently. “Netflix’s model is so different to ours. What their ambition is, is so different to ours. They do their thing; we do our thing.”