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THE MEDIA MARCH 2017_DIGITAL

TV future Networks are the venture capitalists of TV/ video – although the odds on a safe return on sport are significantly more predictable than on a TV series – which is precisely why networks trial big entertainment investments. The last series of ER, the long running medicalslash love-slash-sex drama, cost $13 million per episode, while the last season of Friends and season six of Game of Thrones climbed to $10 million per episode. You get the picture. I maintain the distinction betwen video and TV is becoming less and less important . A two-tier market is emerging: one mobile, short -form video, driven by social media and e-comerce , the other longer - form on-demand content on biger screns. Fulfiled needs state + friction-free distribution = victors To understand how this industry is evolving it’s useful to look at what needs are met with the least amount of friction by which platforms. Netflix and Amazon are essentially networks, despite not owning broadcast licenses or infrastructure. They meet the same market need as other networks, entertainment. Let’s break this down in terms of needs state and dominant providers: A single Bollywood production can pull more audiences than an entire Hollywood series • Information: Google and Facebook • Education: Google and YouTube (Alphabet) • Sport: ESPN, Sky, DStv (no dominant global players, this sector remains geographically fragmented) • Entertainment: Netflix, Amazon, HBO competing fiercely for the land grab, but traditional networks still hold the high ground • Escapism: Gaming, Snapchat, and a myriad of apps compete with special interest network channels (think Idols). In the near future, AR and VR will be giant killers. What is clear is that Facebook and Alphabet have colonised information and education, although the latter will evolve into one of the biggest businesses to emerge from the low-friction internet model. Between artificial intelligence (AI) and e-learning, existing education models will be dismantled more rapidly than the publishing industry was. The only question is whether or not this also becomes a winner takes all marketplace. Sport is so culturally and geographically germane it’s near impossible to see how it could be consolidated into a two or three horse race. It might be unbundled, but will always command a premium from subscribers and advertisers. Similarly entertainment: many western-centric commentators conveniently ignore that Breaking Bad isn’t a universal winner. A single Bollywood production can pull more audiences than an entire Hollywood series – audiences that are becoming rapidly more economically powerful. Hollywood isn’t the epicentre of global entertainment; Disney isn’t the global entertainment benchmark. It never will be. The last need state, escapism, is up for grabs. Networks don’t stand a chance, thus removing another pillar of their old architecture. The future of networks is about being a specialist in either sport or entertainment, or a bundled combination simply because the economics work that way. In sport and live events, live video and augmented reality (AR) are fringe players for now; the jury’s out on how much traction these models can get and if they can be successfully monetised. 34 | themedia www.wagthedog.co.za


THE MEDIA MARCH 2017_DIGITAL
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