International cable company Liberty Global (LGI) announced the launch of a joint venture for the production and distribution of television content. Called Platform One Media, the studio is to be launched in conjunction with TPG Growth, the middle market and growth equity platform of one of the largest private equity firms, TPG Capital.
LGI is "initially" taking a minority equity stake in the business -- which suggests it may up its shareholding and operational control as the studio develops. Meanwhile TPG Growth will route its investment via Evolution Media, an investment partnership with major entertainment and sports agency CAA, and Participant Media.
According to the companies, the studio will "curate, develop, produce, and distribute high-quality scripted programming for the US and international markets." It is to be headed by Katie O'Connell Marsh, who is the former CEO of Gaumont Television. O'Connell Marsh was responsible for launching studio operations at Gaumont, and produced several hit shows including Hannibal on NBC and Narcos and Hemlock Grove on Netflix, among others.
LGI has 25 million subscribers in 30 countries across Europe, Latin America and the Caribbean. However, this venture is most likely aimed at the 11 European countries where it operates. From LGI's perspective, the studio could provide original programming, which could help differentiate the operator just as it has Netflix and Amazon. As Bruce Mann, chief programming officer at Liberty Global, said in a company statement, Platform One could help provide "high-quality scripted programming which could potentially feature on Liberty Global's pay-TV platforms in Europe."
LGI's original content initiative closely follows an announcement from Orange regarding its own original content production plans, and Vivendi, Canal Plus and potentially Telecom Italia's plans to launch a "European Netflix," with or without Italian broadcaster Mediaset. While the scale of these efforts don't compare to the $6 billion Netflix is reportedly expected to spend on original content annually, they do underscore the importance operators are now placing not only on video content, but specifically differentiated, original content. (See Orange's New €100M Content Plans Reflect CFO Wariness and Vivendi Still 'Hopeful' of Becoming Europe's Netflix.)
Last year, LGI announced a global partnership with Netflix, to offer the SVoD service to all of its subscribers around the world. The operator is clearly hedging its bets by offering both Netflix and developing original content that could be used as a differentiator.
Original content has worked extremely well for Netflix, and also appears to be working for Amazon. It's also been a huge element of HBO's success, even before Internet streaming, in the days of premium cable programming. But is it really essential for operators?
It's tough to say. In the long term, if everyone has differentiated, exclusive content then subscribers will either have to subscribe to a ridiculous number of services, or stick to just two or three and be frustrated they can't get some of the shows they would really like to see. An aggregator model is favored in that scenario, as subscribers would want not only lower costs but also a single bill, single transaction, single customer care number etc. This would appear to be a good role for an operator to take on, just as with linear channels in the past.
But original, high-quality differentiated series are having an impact, and operators want a piece of that action as well. And there's also the danger that one streaming service ends up winning out. Then they risk becoming delivery pipes for that one service, without a meaningful brand or customer relationship.
— Aditya Kishore, Practice Leader, Video Transformation, Telco Transformation