French public broadcaster France Televisions and Italy's RAI announced this week that they would be working together to produce a broad slate of content for global distribution, including dramas, documentaries, animation series and other genres of TV entertainment. They were blunt about their goal; it is to counter the growing impact of SVoD services rapidly gaining audiences in Europe. Senior executives from the companies specifically mentioned Netflix Inc. (Nasdaq: NFLX) and Amazon.com Inc. (Nasdaq: AMZN) as drivers for the partnership.
While co-productions are not unusual, this kind of ongoing collaboration between separate production departments and network is. Broadcasters are far more likely to invest in one-off productions together, but combining their resources for a formal, ongoing joint-venture is unusual, if not entirely unprecedented.
What's even more noteworthy is the fact that the co-productions are to be in English, not Italian or French. The goal of the collaboration is to create a global service, and not specifically target either country. That's again a major shift for public broadcast bodies who are created and funded with the specific goal of contributing to and preserving the national culture.
Executives from both companies also suggested other European public broadcasters could join this initiative, since their goals were aligned: to counter the impact of Netflix and Amazon and preserve/propagate European culture. RAI has already established relationships with Franco-German broadcaster Arte and Swiss public broadcaster RSI.
French media company Vivendi had previously proposed a similar private sector solution; acquire Italian broadcaster Mediaset S.p.A. and launch a pan-European Netflix equivalent. Those plans have since sputtered, as Vivendi rethinks its Mediaset acquisition and tries to soothe regulators. (See Vivendi Still 'Hopeful' of Becoming Europe's Netflix and Eurobites: Vivendi Fights Back After Italian Rebuff.)
But interest in a European Netflix is broad-based, and this might be the spark that gets it going. Public broadcasters are increasingly strapped for cash in this era of European austerity and keeping up with Netflix's $6 billion annual production budget -- for original content alone -- is not going to be possible. And yet, some shows produced by European public broadcasters are of excellent quality, with broad appeal; shows from the British Broadcasting Corp. (BBC) (UK), ARD/ZDF (Germany) and DR (Denmark) among others, have found viewers all around the world.
On the other hand, Europe has a plethora of streaming services already; would yet another be able to stand out? The well funded Vivendi venture Watchever has already suffered an untimely demise, and the competitive environment for other OTT services is hardly encouraging. (See Does Watchever's Demise Highlight a Looming Challenge for OTT?)
Unlike pure-play OTT services, public broadcasters have the advantage of multiple distribution channels; they don't just have to rely on streaming online. And they have well established, prestigious brands that deliver large national audiences from day one.
But they also have another potential advantage, and that is working with the European Broadcasting Union (EBU). An alliance of 73 members spanning 56 European countries (plus another 34 outside the continent), the EBU's membership reaches a combined audience of more than a billion people worldwide. Its TV committee already enables the Eurovision song contest, a major event in Europe. And it's involved with networking, facilitating licensing of content among members and the coordination of technology standards in the radio and television arena.
An OTT service with content production shared and distributed among European public broadcasters, coordinated by the EBU and reaching over a billion viewers -- now that would be difficult to take on, even for Netflix.
— Aditya Kishore, Practice Leader, Video Transformation, Telco Transformation