Major construction work on Cannes’ iconic Croisette has transformed the glamorous French seaside town into a chaotic building site. This disruption sets the stage for the current state of the international TV business, which is facing a multitude of challenges. The combination of an actors’ strike, rising inflation, a slump in the advertising market, and a decrease in investment by global streaming platforms has weakened the foundations of the industry. Television executives attending the MIPCOM Cannes international TV confab are navigating through concrete slabs and roped-off danger zones, mirroring the cautious approach they are taking in their business decisions.
Fear is permeating the industry, with companies worried about their future viability. Netflix and Amazon, the dominant players in the streaming market, have shifted from purchasing numerous shows to acquiring only one or two in most markets. As a result, smaller production and distribution companies that do not have deals with these streaming giants find themselves with limited opportunities for their content. This situation has created an uncertain landscape, leaving many executives apprehensive about the future of their businesses.
The impact of these challenges is particularly felt in the high-end drama sector, where big-budget productions are struggling to secure funding. Most networks and streamers are now hesitant to invest in premium fiction, leaving small and mid-sized producers squeezed financially. Inflation is eating into margins, making it increasingly difficult for these companies to continue operating without the risk of default. It is predicted that there will be casualties in the industry before these challenges are overcome.
However, while high-end drama is facing difficulties, non-scripted entertainment and reality TV are experiencing a revival at MIPCOM. This resurgence is not solely a reaction to the ongoing actors’ strike but also a result of the cost-benefit analysis conducted by channels and platforms. Streamers, in particular, are embracing lower-cost entertainment shows. Prime Video, for example, announced a deal to adapt the British game show “The 1% Club” for its North American service. This shift towards lower-cost content is reflected in the revival of popular formats such as “Got Talent” on Disney+ in Italy and the reboot of the iconic Australian soap “Neighbours” on Amazon’s Freevee in the U.K. and U.S.
Related Post
Global streamers are also displaying a newfound willingness to share rights to formats with producers and other channels. Instead of insisting on exclusive worldwide rights, they are opening up opportunities for collaboration. This change allows for greater flexibility in the distribution of content and a more cost-efficient approach for buyers. Windowing, a strategy where different broadcasters and platforms share rights to the same show across time-restricted periods, has become more prevalent as buyers prioritize cost-efficiency over exclusivity.
Bob Bakish, President and CEO of Paramount Global, emphasized the importance of returning to the traditional licensing business model in his keynote address at MIPCOM. He argued that selling off local rights to programming is a profitable and critical driver of global expansion, contrasting with the tendency of other studios to “pull back content and put up walled gardens” to support their streaming platforms.
Despite the current downturn in the industry, experts remain cautiously optimistic about the future of the streaming business. Many attribute the challenges to macroeconomic factors such as inflation rather than long-term structural weaknesses. As platforms and studios refocus on licensing and return on investment rather than solely subscriber growth, a return to growth is expected.
Looking ahead, MIPCOM Cannes 2024 is scheduled to take place on October 21-24, 2024, with the partner market MIPTV set for April 8-10, 2024, both in Cannes. The industry may have faced a tumultuous period, but with adaptation and renewed strategies, the international TV business aims to rebuild and thrive once again.
