Just over a year ago, the BBC lost the rights to broadcast future series of Great British Bake Off (GBBO) as Channel 4 offered a knockout bid of £75m over three years. Much discussion followed as to whether this was an expensive mistake by C4, a sign of weakness from the BBC, a national disgrace, and all points between. Three-quarters of the key talent refused to make the switch so C4 recruited replacements and waited nervously to air its first series….
The big day came earlier this month and GBBO returned, with Noel and Sandi as the new Mel and Sue, Prue Leith as Mary Berry, and Paul Hollywood as Paul Hollywood. The changes in talent, as is so often the case, didn’t matter. Much to the dismay of talent (and their agents!), if the format is good enough, and well-produced, the personnel are interchangeable. The ratings were great – not as high as the BBC achieved, but much higher than anyone expected. GBBO is already C4’s biggest show of the year and the £75m investment is now seen as “a steal”. Apparently the “break-even” audience was around 3m, so a consolidated figure closer to 9m was cause for celebration.
Programmes switching channels is rare in the UK
In the UK, not many big programmes switch broadcasters – certainly not successfully. Recently, The Voice switched from BBC to ITV, and Big Brother switched from C4 to C5. Examples from the distant past saw Morecambe and Wise shift disastrously from BBC to ITV and, bucking the trend, Men Behaving Badly went from miss to hit when it moved from ITV to BBC.
For GBBO, most of the BBC audience loyally followed the programme to C4 – and it looks like they are staying. This suggests that the audience inertia and “stickiness” that characterises a channel’s strength may be a thing of the past.
Why channel-power is declining
Simple market fragmentation is the key factor as technological advances mean audiences can consume content on multiple devices and via multiple platforms. As a result, the channel is becoming less powerful as a curator of what to watch and strong brands, like GBBO, increase their power and value as they stand out from the crowd.
It’s a quite natural evolution for the TV industry to be undergoing. In retail, technology has demoted the role of the shop vs the product, the same is happening to channels vs programmes. As a result, we can expect more bidding wars as powerful programme owners seek greater commercial success.
And “consumer-power” is rising
The switch to programme power is also a necessary step on the road to more consumer engagement. Note, the use of the word “consumer” rather than audience. Technological advancements have enabled more personal delivery, immersive engagement, feedback channels, interactivity, sharing and so on. Only a few channels groups have grasped these opportunities as much as they should (UKTV is a good example), preferring instead to cling on to the belief that the advertising gravy train will perpetuate. It won’t. Advertising on TV is not growing and what money there is has to feed more and more channels.
Switching from the BBC will also yield greater commercial success as C4 doesn’t have the same constraints over commercial activity. When BBC’s Masterchef was exported to Australia in 2009, the commercial focus that Ten Network put on the programme yielded a phenomenal outcome in both ratings and revenues, and for a while it seemed everything in Australia was branded Masterchef. BBC constraints over commercialising content was a key factor in the GBBO producer’s decision to go with C4.
Four step process to new content creation
So if the GBBO example is a sign of a power switch from channels to programmes, what does this all mean for the programme makers and creatives who largely bemoan how much tougher it is to make money in TV these days? Here’s my 4 point plan:
1. Take more risks and back your own ideas. Relying on an ever declining commissioning system, where the broadcasters take most of the risk and the producer keeps most of the rights, is not the answer unless you want to wither on the vine. The GBBO experience proves that content remains king – so that’s where the focus has to be and if that means investing more alongside broadcasters to create content, then so be it. Besides, if the channels are losing their power to the programmes then why wait for them to decide your fate?
2. Redefine your market. Don’t think of channels as your customers, instead think of the fans and consumers of your programme (or “brand”). This entails taking a greater role in the engagement, recruitment and connection with the end consumer. Find your fans and superfans, enthuse them, let them get involved, and encourage them to spread the word. Technology exists that enables these things to happen effectively and efficiently – find it, embrace it, use it, before others beat you to it.
3. Diversify your revenue streams. It is becoming less and less viable to assume a broadcaster will pick up the bill, give you a margin, and then hope for some icing on top from international sales and brand licensing. Instead, think of your viewers as “consumers” and the myriad ways in which they can be the drivers of revenues from your content – are there transactional opportunities? Community building opportunities? Subscription opportunities? Merchandising, publishing, games, links to affiliate marketing, the list is long but hugely daunting if you’ve only ever been reliant on commissioning broadcasters for the bulk of your revenues.
4. Change your funding model. If you have followed steps 1 to 3 and successfully redefined your content as a conduit to “consumers”, rather than “viewers”, and built strategies for diversifying the revenues your content can generate, then you have a more valuable proposition that can be financed through alternative means. Ad-funded content, specialist investment funds, crowdfunding, to name a few. Lazy producers, and complacent, profitable, incumbents rely on broadcasters for funding at their peril. If you have nothing to lose, be imaginative. If you have a lot to lose, consider investing your profits into new content, with or without a commissioning channel.
Broadcast pioneers like YouTube, Netflix, and Amazon all risked a lot, but by doing so have created new economic models and huge value at the expense of the incumbent TV industry. It is now the producers’ turn to discover the recipe for success as the power shifts from channels and towards the best content….