The rise of Netflix as a global and premium drama content commissioner has been a huge wake-up call to the television business. This proverbial flea in the fabric of the TV ecosystem continues to rock a lot of business models as broadcasters, producers and platforms have all scrambled to figure out how to deal with this new, deep- pocketed beast.

Netflix is still making waves – its latest coup is signing up the Obamas to produce films and series for the streaming platform – but other big tech platforms are also gaining traction as they dive into the video business. Ominously known by the collective moniker of FAANG (Facebook, Amazon, Apple, Netf- lix and Google) these players are continuing to shake-up the business, from writing big cheques for original commissions to signing exclusive talent deals with showrunners and writers, to getting into live programming, in- cluding sports. Indeed, everything seems to be in their collective cross hairs.

The content arms race – driven by the FAANGs’ deep pockets and big ambitions – has changed the way the legacy media com- panies are doing business, both driving big M&A events as they try to scale up as well as causing a re-think in how to leverage talent relationships, do co-productions and create new bundling strategies. A big part of the cur- rent fight back by broadcasters, content pro- ducers and pay TV operators is around video- on-demand, box sets and direct-to-consumer offers. Creating competing on-demand and streaming services and working on a better understanding of what customers want has become a mantra. How to re-align and re- imagine content offerings and services in a landscape where there is so much choice for consumers is no mean feat, especially when the announcements keep coming.

Google announced this month that YouTube will re-brand its premium video subscription service to YouTube Premium and will send it to Europe, with planned launches in a number of European countries, including Denmark, Finland, France, Ger- many, Ireland, Italy, Norway, Russia, Spain, Sweden and the UK. However, even before YouTube Premium’s announcement, it has been very clear that Europe is a key target ter- ritory for the FAANGs.

Against this backdrop, the latest European broadcaster to increase its focus on VOD is RTL, whose new CEO Bert Habets is concen- trating on a hybrid digital approach that com- bines free, advertising-financed services with a premium pay product across a number of its territories. Some are calling RTL’s ap- proach a ‘German Hulu’. RTL launched a new free channel in Germany based on ac- quired US content. Called Now US, it will be exclusively available to the VOD platform be- fore broadcast and then for 30 days after the linear broadcast as well. RTL is also working on better collaboration on how to scale up its digital businesses.

This comes at a time when Amazon and Netflix are both doing strong business in Ger- many. In 2017, Amazon’s VoD service out- paced all others in the market including Netf- lix, according to research by Enders Analysis. It estimated Amazon’s subscriber count to be 3.7 million and Netflix’s to be 2.7 million in the country, with both services still growing.

Maxdome, ProSiebenSat1’s OTT service, is limping along in terms of monthly views, well behind the top four VOD competitors – Amazon, Netflix, ARD and RTL. One explanation for this may be that ProSiebenSat1 has too many VOD platforms; it operates four, including an advertising VOD service with Discovery. Meanwhile, Sky Ticket, the Ger- man equivalent of Now TV in the UK, has been through a repositioning but is still not a heavily marketed service.

Netflix’s strategy is particularly successful as it benefits from distribution partnerships such as the ones it has with Deutsche Tele- kom and Vodafone. Amazon has just done a bundling deal with BT in the UK and is soon likely to find some German partners too.

On-demand viewing, both ad-supported and subscription VOD, is now an expecta- tion among viewers who have bought into the idea of binge watching ever since Netflix broke the linear viewing mould. But, while no European TV expert expects linear TV view- ing to go away any time soon, the VOD battle- ground is still in the testing phase about how best to find and keep viewers’ attention.

It’s ironic that the regulators are partly to blame for the current situation. Both in Germany (in 2011) and in the UK (in 2009), plans for an online joint venture among tradi- tional broadcasters were stopped because of a fear that it would threaten competition in the broadcasting marketplace. Now, the whole idea of partnerships among PSBs and non- FAANGs has returned with a vengence.

No battle is lost until the final blow is struck, but the FAANGs have the upper hand and it will take major efforts across Europe to carve out a viable VOD business that works both for broadcasters and their audiences.