A discussion with Michael Puopolo, SVP Research at Twentieth Century Fox Global Television Distribution about the challenges facing TV and content production industries.
What are the trends you currently observe on the US market?
The US market continues to be an experimental, dynamic and rapidly evolving video consumption landscape. Overall, video consumption is growing across all generations of Americans, from Generation Z to Baby Boomers. Consumers are making individualized choices for what video content they want to watch based on time for a completely personalized video experience. DMVPDs1 are growing and will allow for targeted programmatic advertising directly to their subscribers. In the 21st century media landscape, attention has supplanted time as our most valuable consumer resource.
What do you observe in terms of viewing, video consumption in the US?
Consumers are in total control of their viewing experience on every device, location or mode of transportation. Content is viewed live, on mobile, social and on demand. TV was a scarce resource and now its ubiquity and proliferation are its greatest strengths.
Are measurement tools keeping track with the industry changes, the new ways of distributing, accessing and engaging with content?
Measurement databases are not keeping track of industry changes, but that is not uncommon. Technology will always be ahead of measurement, similar to how technology is always ahead of the law. I remain optimistic and encouraged by the meetings I have had with both US and international ratings data providers and new measurement solutions start-ups. There are many smart people continually working on new ideation and metrics to clarify measuring content engagement.
How do you measure audiences today, what are the new metrics?
Trying to measure all forms of consumer viewing today is like trying to count all the stars in the sky. What our industry needs is a renewed focus on what we need to measure. What are the KPIs from our consumers, viewers, subscribers or advertisers? The future of media measurement will be to define long term brand engagement, retention, and time spent to create sustainable value.
Disney is currently taking over Fox. What’s at stake and how do you see things in the future?
Disney is the 1st media company to restructure and reorient the company around a DTC division. What is the Disney brand in OTT and more importantly, what do Disney consumers expect from the Disney brand in OTT? Disney has successfully defined their brand and generated massive revenue with their theme parks, retail stores, linear channels, and even their cruise ships. When you see how Disney has successfully executed on the Marvel, Pixar and Lucasfilm brands, there is no better steward of Fox’s franchises, brands and content than the Walt Disney Company. In every way, this is the most exciting and dynamic evolution of media that I have ever seen in my career. Technology has forced a dramatic shift from a B2B to a B2C model and that shift will prove beneficial for consumers and media companies alike. We are in the nascent stages of media companies defining and/or redefining their brands and consumer relationship in OTT. Studios/networks/broadcasters need to clearly define for consumers what their brand is on mobile, in linear and non-linear. And that brand could be differentiated on all 3 platforms.
What are the trends in programming you can observe?
For me, 2018 has really been the break out year for international TV series. No matter how big of a hit in their home markets, international TV series were rarely seen outside of their country. Now we are seeing great international TV series such as Sacred Games, A Very English Scandal, Fauda, Babylon Berlin, The Rain, Occupied, Gomorrah and 2018’s biggest international TV series breakout hit – Casa de Papel/Money Heist – amass a global audience. These incredible international TV shows have always been around, but I am thrilled to see them break into mainstream popular culture in a way they never have before.
Broadcasters counter FAANG players regarding video viewing with new partnerships, new alliances, new offers and new tools. How do you position yourself at Fox?
Teaming up is an idea whose time has come in every major media market. The US continues to have great success with our broadcasters teaming up for HULU. HULU has grown into the #2 SVOD service in the US with over 20 million subscribers. I am excited for the French broadcasters to launch Salto, ProSieben and Discovery to team up in Germany, and the BBC, ITV and Channel 4 to invest in Freeview. Local broadcasters have the local series content their viewers demand and European millennials are willing to pay for multiple OTT/SVOD platforms. Right now we are trying to play catch-up with tech companies, and I think that is a mistake. Studios, networks and broadcasters need to stop playing defence and remember content curation and discovery is in our DNA. Technology companies have gone as far as they can with algorithmic recommendations.
Is there a form of collaboration, or is it pure competition?
With internet video platforms it can and should be both collaborative and competitive. In the end, whether we are talking to Netflix, Apple, Facebook or Amazon, every single executive I have spoken to at all of those platforms are just as passionate about great television and movies as anyone at a studio or network.
What is Fox’s strategy to keep on engaging viewers, and especially younger viewers?
Fox’s successful viewer engagement strategy has always been twofold. One is to give viewers content they did not even know they wanted to watch with bold new TV shows and movies. And two, Fox is dedicated to discovering and nurturing new and diverse storytellers as we actively develop the next generation of creative artists. Our development and creative executives have always sought out risky projects resulting in ground-breaking TV shows like POSE and 9-1-1, and films such as Avatar, The Greatest Showman, Deadpool and Love Simon.
We look at studies, TV continues to be THE medium for mass daily reach in the short and long term. RTL Group redefined TV as Total Video, putting the content at the core and offering it on all devices. Do you have a similar approach at Fox?
Exactly. Where TV excels is in long form storytelling. TV shows have multi-character casts and seasonal arcs that are the equivalent of curling up on your couch with a great novel. The viewer satisfaction from binge watching a season is the same as when you finish a really great book. For the genres consumers value most: sports, news, premium TV and theatrical content, consumers continue to gravitate towards the biggest screen, the television.
We hear Netflix is in decline, is that something you feel on the US market? Was it ever a threat to your audience figures?
Although Netflix’s growth has slowed in the US, it has not declined. If Netflix can successfully implement their theatrical features strategy, they can re-accelerate growth in the US. We never viewed Netflix as a threat, but rather one more platform of many in the mix competing for consumer’s time and attention. We would not bet against Netflix continuing to dominate the SVOD space despite ever increasing competition.
1Digital multichannel video programming distributors (Examples from the US: DirecTV NOW, Sling TV).
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