Yesterday the UK market defining broadband 'player' Kangaroo was announced by the BBC, ITV and Channel 4 (but noticeably not five) and I posted about the service. There’s been talk what this might mean for the future of the BBC Licence Fee as the service is being launched by the Beeb's commercial subsidiary BBC Worldwide. The future of the licence fee is an area I touched upon last week and no doubt will do again, but today I want to look at a different side of the Kangaroo story.
This Kangaroo will be fairly dominant in ‘re-arranging’ the make-up of the UK ‘TV’ market, until/unless he’s joined by another big kangaroo along the lines of one called ‘Hulu’ (due to its Mommy and Daddy being News International & NBC Universal) or some creature as yet unborn..
So where does Kangaroo leave the other players in this new market:
- Social (Media) Networks
- The other Nu-TV Aggregators (Joost, Babelgum etc)
- IPTV Distributors (BT Vision, Orange, Sky Anytime)
- Other current TV Channels
- Future brands
Well, here are some headline future gazing thoughts based on the limited information released as of Tuesday evening.
- Social (Media) Networks
All the major mass market social networks (MySpace, Facebook, Bebo) are becoming more open to 3rd party content and are actively looking at having either their own content (Bebo & MySpace have both commissioned shows) or promote other media, be that TV shows, music, films or other entertainment.
I reckon the Social Nets will be one of the winners from Kangaroo. Content owners need marketing and ultimately eyeballs on their content, which Social Networks provide; your friends tend to like a lot of the shows you like so it’s the perfect marketing medium. Equally Social Networks need content to hold onto their audiences which provide eyeballs for advertisers. Who hasn’t regularly asked friends – did you see XX last night? It's a mutual back scratching situation. Think of it as a symbiotic relationship like that of the Radio Times with TV Channels.
- Other Nu-TV Aggregators
The most high profile new broadband TV aggregators are Joost, Babelgum, Sky Anytime and Hulu. Now Hulu I’ll take out of this equation as, no matter what their long term objectives are, it’s looking to be something akin to the Kangaroo of the US market.
Joost & Babelgum are in a more complex situation. Their first player advantage, in the UK at least, has pretty much gone up in smoke. Even if, via non-exclusive deals with content owners they get to have a decent library, the incumbents will just be too dominant to challenge.
If I was those guys, I’d be having sweaty palms right now, but they are young, nimble, well funded businesses and I’m sure they’ve predicted these changes and are adapting their business plans.
Firstly, these guys are international players: As with many international media brands, you can be a major player in one territory, ticking along elsewhere.
Secondly, get enough ‘tier 2’ content and you can still be an effective player. Sign up other major content players (MTV, Nickelodeon, Discovery, Virgin Media TV) and you can still have a reasonable profile and be an effective player. Kangaroo is essentially a ‘national’ player, international media companies may like to do pan-regional deals, especially if that is in conjunction with international advertisers.
Now I know this industry is so new, pretty much all the players are still on the Beta learning curve. However, my third point is, don’t try and be all things to all people. Work out what out which market niches you can exploit most effectively and become a more focused proposition. Babelgum might be more of the ‘South Bank’ or Indie cinema of the industry, Joost might be a more youthful proposition with Music, Extreme sports, ‘underground’ programming. As with MTV or Coke, you change the mix you present for each market.
Sky Anytime is a slightly different proposition as in essence it isn't a stand alone service, its free to those who already subscribe to a Sky package. It has great content, but in the medium term I think its about future proofing Sky's main business and decreasing churn by providing an appreciated value add -and it does that well.
- IPTV Networks
For the likes of Tiscali, BT Vision and Orange TV Kangaroo is, I would say a mixed blessing.
Kangaroo has said they’d like to deliver their content direct to TV’s, which infers they’re likely to work with the current crop of well funded IPTV Network pioneers.
On the upside, these pioneers don’t need to scramble around doing deals with every company that owns 20 hours of content – you do one deal with Kangaroo and I assume get the bulk of interesting top of the range TV content, all pre-cleared.
On the downside, these competing platforms, and other platforms in the market place will all have the bulk of the same content and differentiators within their offerings become harder to achieve; differentiators which are effective marketing tools will be even harder to find.
- Other TV Channels
The one question that hasn’t been answered just yet is just how open, or closed the Kangaroo platform will be. My guess a ‘bloated’ proposition will be harder to navigate and won’t be in the best interest of the founder partners, so I think they’ll definitely be a limit to which channels are invited, or allowed to join. So, UKTV and Viacom may get a yes, but Chart Shows’s Bliss or True Movies channels may find it harder. The only certainty I have is that the ‘shake-out’ of smaller TV players (which I discussed back in June) will continue as the crowded multi-platform marketplace makes it harder for small players to achieve and keep a commercially viable mass. I do expect Channel 5 to be part of the Kangaroo deal eventually, unless their parent RTL has something up its sleeve.
- Future Brands
So how easy will it be for new media brands to break through, or will the major players, now that they generally have their act together, be just too dominant to be challenged. I think people will always find ways to break through, and if its not through Kangaroo, the Social (Media) Networks and Google’s Open Social networks will be the new route to market.