For ALCS News July 11, 2014

If you are still attending dinner parties and telling your fellow guests that you’re a “TV writer”, it might be worth reconsidering your job description.

Not only has the viewing, production and distribution of television been going through dramatic change since the start of the millennium, the effect on writers and their words has also been considerable.

Suffice to say that as audiences are being attracted to new programming styles on various mobile and internet-connected platforms, and to fresh talent and new voices, then no one is really working – strictly speaking – in just the TV business anymore. We are all video content providers.

Technology is allowing video content to be viewed on demand and on different devices and this is changing not only how and what people view but when they view it. For example, BBC iPlayer’s “prime-time” viewing of catch-up TV spikes after traditional prime-time telly viewing, as consumers take their devices to bed with them.

The Growth in Video Viewing

Meanwhile, the growth of video viewing on YouTube continues apace with more than 6 billion hours of video watched every month by over 1 billion unique viewers globally. A large part of that viewing is still about cats-on-skateboard craziness (or even my current favourite - the whistling parrot) but there are more and more star-studded original online video series too, with big-name stars like Kevin Spacey in Netflix’s House of Cards and comedian Seth Meyers in The Awesomes, an animated series now in its second season on Hulu.com.

There are also entire networks of channels online (called multichannel networks or MCNs) that are commissioning and curating highly watchable video content. These MCNs help promote their channels and take a cut of the advertising, much like traditional cable networks. They are typically genre-focused, so Awesomeness TV is centered on kids, while Machinima is focused on video gamers. Felix “PewDiePie” Kjellberg is YouTube’s biggest star with some 29 million subscribers to his eponymous YouTube channel. Kjellberg plays video games and comments on them and his efforts gross him nearly $4million a year in advertising, most of which is pure profit because his costs are so minimal.

Of course, not all individual YouTubers are as successful as PewDiePie, but MCNs as a group are attracting the attention of, and megabucks from, traditional media companies. They include Dreamworks, which bought Awesomeness TV for around $117million and Disney, which earlier this year purchased Maker Studios (PewDiePie’s MCN) in a deal that could be worth upwards of $1billion, if certain performance targets are met. Maker Studios has 380m subscribers across 55,000 online channels (by far the most successful of which is PewDiePie) and is not yet profitable, but for Disney the purchase will help it address how to reach younger viewers as their viewing habits shift away from traditional TV to online viewing.

While PewDiePie is a new kind of entertainment, Jamie Oliver’s Food Tube and Drinks Tube online channels are collections of videos curated by Oliver and his team. They have more of a telly-like production feel to them, but at much lower cost. For Oliver and his fellow epicures there is also an immediacy to producing for an online channel that sparks new creative formats and importantly allows for a global audience. This is also the reason why big names in traditional TV such as David Mitchell and Ricky Gervais have taken to the internet to create new kinds of 'TV' with traditional TV producers such as the Shine Group and Hat Trick Productions. The BBC is also re-thinking how to reach viewers in this new, connected era, especially younger viewers. It recently took the controversial decision to re-cast BBC Three as on online-only channel by 2015. Subject to approval by the BBC Trust, the move will save money and also likely limit the number and size of new commissions.

11 Hours and 7 Minutes a Day

There is a certain amount of chicken and egg in the growth of online video. According to recent data from Ofcom, the communications regulator, the widespread availability of broadband in the UK has allowed Britons to spend 11 hours and 7 minutes a day using smartphones and tablets, and watching television and listening to the radio: two hours more a day than they did in 2010. Much of that increase is due to online and on-demand programming.

Smartphones are now used by 61% of people in the UK and tablet ownership is also on the rise allowing for multi-screen viewing and a broader definition of what constitutes “TV time”. Gadgets are becoming increasingly integrated to the web, with Sony recently announcing that PlayStation 4 will integrate online video into the console in a software upgrade that will allow easier sharing of video clips.

All of this has fuelled the ambitions of digital players like Netflix, Amazon, Apple and Google. Online streaming services like Hulu and Netflix buy lots of rights to older TV fare, but as the competition for viewers and subscribers has increased, the digital players are also getting into the content creation business themselves.

There is a growing amount of money at stake as well. At the Digital Content New Fronts in New York in April, the most ambitious digital players, from Yahoo, AOL and Netflix to Amazon and Microsoft’s Xbox all showcased their programming slates to advertisers in the hope of getting a slice of the spending on digital ads, which, according to the Interactive Advertising Bureau, will reach $2.8billion this year in the USA.

Traditional Broadcasters Feel the Heat

Traditional broadcasters are feeling the competitive heat not only from newer entrants like BT, which has begun offering high-profile sports via a broadband connection but also from the digital giants eager to capture new audiences. All the broadcasters from ITV and the BBC to Channel 4 and Sky, are building on-demand, catch-up and subscription services of their own, as well as putting an increased emphasis on original content.

ITV Studios, the maker of Mr. Selfridge and Come Dine with Me, has snapped up a dozen independent production companies in the last two years with a particular emphasis on the US - the world’s biggest TV market - purchasing the makers of Duck Dynasty, Cake Boss and The Real Housewives of New Jersey, among others. Its efforts mean that the biggest UK commercial broadcaster may itself now be a buy-out target because of the wider media buyout frenzy currently gripping the TV market (witness the recent £450million purchase of Channel 5 by Paramount Studio and MTV Networks owner Viacom). The appetite for content is attracting big international media companies, with the £550million purchase of the UK’s largest independent production company All3Media as a case in point. The maker of Midsomer Murders was purchased in May by Virgin Media owner Liberty Global which teamed up with Discovery Networks to do the deal.

A Battle for Talent

Peter FIncham, ITV’s Director of Television said recently that in the US, over 40 channels – including online channels such as Netflix and Amazon - are commissioning scripted material. “In drama in particular there is greater demand than ever now and this brings challenges to us at ITV because there is a battle for talent. I tell my commissioners that they are not buyers they are sellers because they are selling the channel to the talent to get them to come and work with us.”

In this new world, writing for online, streaming sites like Netflix or for short-form video makers such as All3Media’s Little Dot Studios, is just as legitimate – if not always as lucrative - as working for the traditional television broadcasters. And understanding how to write for the new 'binge viewer' and how to pitch ideas to online content commissioners are necessary new skills for writers in every genre.

This is not to say that linear TV viewing and traditional TV commissioning are dead. But what is true, particularly for younger viewers, is that being tethered to a linear TV schedule is passé, and making the distinction between what is available online as opposed to on the telly is not relevant to how video content is increasingly being consumed.

Online Subscription Services

According to Ofcom’s Communications Markets Report 2014, revenue from online subscription services including Netflix and Amazon Prime nearly doubled in 12 months to £111.7million in 2013 (from £63.5million in 2012). A recent study by Enders Analysis says that Netflix has doubled the number of its UK subscribers in the last year to 3million, putting it well ahead of rival online video subscription service Amazon Prime Instant Video, which Enders estimates has 1.2million subscribers. This growth is likely to continue because Netflix is to be made available on YouView set-top boxes provided by BT and TalkTalk later this year.

To understand the current digital content world, it is often best to look at what the biggest new kid on the block is doing. In this case: Netflix. The California-based subscription video service is expected to spend $3billion on content this year. About $300million of that will go into commissioning original series, such as its remake of the BBC’s House of Cards starring Kevin Spacey and the prison series Orange is the New Black. In May, Netflix signed a deal with Sony-owned, UK-based Left Bank Productions to produce The Crown, an original drama series about the Queen.

Viewing Patterns and Data Crunching

Exclusive content that appeals to its audience has become the sine qua non of Netflix, which relies on detailed analysis of its subscribers’ viewing patterns to help it decide what kinds of programme to commission. Netflix crunches data culled from its 48million subscribers to ascertain what will work. Its head of programming Ted Sarandos is on record as saying that the streaming service was all but certain that the $100million House of Cards series would work because Netflix knows its audience so well. In fact, Netflix unlike TV networks, does not commission pilots. Instead Netflix subscribers' viewing habits are analysed using 76,000 different genre types that are scarily specific (“alien films from the 1970s", anyone?) and the results are all fed back into Netflix programme commissioning decisions. Netflix subscribers view more than 2bn hours of video each month giving the company a lot of data to work with.

Netflix is also relatively inexpensive and flexible at £5.99 a month for a month by month contract (no 12 or 24-month lock ins). And it allows users to binge-view, which it turns out is how many of us want to watch telly. The idea of binge viewing is not new of course, but TV schedules have traditionally made audiences wait a week or at least a day to see the next episode of a particular show. Netflix’s view is: why wait? The company offers all episodes at once and the buzz it creates is more like that of a theatrical film release than the slower burn of telly promotion.

Probably the biggest lesson for Netflix has been the attraction of serialised drama with the ability to binge view. What really grabs audiences is serialised, scripted content. This has proven a boon for serial drama writers looking for new outlets because where Netflix has led, its online rivals, including Amazon Prime Instant Video, AOL and until recently Microsoft’s Xbox, have followed.

The Importance of Drama

New research published this month by research company GfK underlines the importance of drama series to online services, with six out of the top ten titles in both the UK and US being drama series. In the UK the top four titles were Breaking Bad, Dexter, Prison Break and House of Cards; in the US the list was virtually the same except that The Walking Dead replaced Prison Break.

The GfK research also shows that in contrast to pay TV services, it is access to large libraries of content coupled with the ability to watch at any time and to watch multiple episodes in one sitting that is helping to drive subscriptions to streaming video services like Netflix.

All the UK broadcasters including BBC Worldwide, Channel 4 and ITV are now talking to the digital players about jointly-funded deals and the new online players have also provided a way to revive TV series that are too niche for a national TV audience. For example, Amazon stepped in to re-commission Ripper Street for a third series from producer Tiger Aspect after BBC One dropped the show. A joint deal was hammered out and Amazon will premiere series three on its own platform first, with the new Ripper Streets airing on BBC One a few months later.

Of course, not all these new ventures are perfect. In April Channel 4 announced it would co-produce the new sci-fi drama series Humans with Microsoft’s Xbox Entertainment Studios, and share a 2015 broadcast window with the games console. But in July the new management of Microsoft said content was not a “core” strength of the software giant and that it would close down Microsoft Xbox Entertainment Studios, putting current deals in jeopardy.

Appetite and Money Aplenty

But there is still plenty of appetite out there - and increasing amounts of money - for scripted material that can stand out. Amazon recently picked up the Halle Berry sci-fi drama Extant to increase competition with terrestrial broadcasters. The days of Subscription Video On Demand services operating merely as later window, catch-up channels are clearly over. It is these services and their deep-pocketed backers that are shaking up the traditional telly business.

The future is about adopting new funding and distribution partners. And for writers, it is about figuring out how to write for audiences who can talk back to you in a more immediate way, be it on social media or through the deep analysis of viewing patterns of which players such as Netflix, You Tube and Amazon are now capable. One result of the need for series that can be binge-viewed is a change in how episodes link from one to another. Because most viewers are watching several episodes in one sitting, a laborious re-cap of what happened in the prior episode has been replaced with the need for a quicker step into the new action. This is just one result of what the new, connected era for video content demands of writers and producers.

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