Market Insight

Endemol backs digital with cash injection

November 13, 2013

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International TV producer and distributor Endemol is to spend €30 million on expanding online operations and bringing more high-end programming to greater numbers of viewers. Digital content wing Endemol Beyond will create and distribute new as well as made-for-TV content in multiple countries on multiple online platforms. Specifically, the USA and Western Europe will see new channels featuring key Endemol programming, new original shows and sponsored content on services including YouTube, Yahoo, AOL, MSN and Dailymotion.

This week has seen an explosion of activity by producers and multi-channel networks, who have been committing new funds and resources to their online content. Alongside Endemol's investment, France's Canal Plus launched the CanalFactory brand for managing and developing online content, as well as bringing 20 new channels to YouTube. These are designed to give some of the broadcaster's top scheduled shows a stronger online presence. MTGx, digital arm of pan-Nordic broadcaster MTG, also announced its intention to buy a 35% stake in multi-channel network Splay, controller of 50 Swedish YouTube channels.

Endemol Beyond has existed as part of Endemol Germany for a year. It ran three German YouTube-funded Original Channels as well as other new content channels. This latest investment - while small compared with a typical broadcaster's production budget - will significantly expand Endemol's direct-to-consumer reach and the content at its command. The investment has two aims: some money will be focused on production - a direct investment in making intellectual property which, if it attracts viewers, is a controllable, owned property like a hit TV show. It is likely that some channels could receive a serious boost in funding, equivalent to that which YouTube itself has invested over the last few years - per-channel figures widely reported for YouTube's initiative are up to $1 million (US) or €700,000 (Europe). The other investment is that of distribution infrastructure: pushing both original and archive or clip content from Endemol's huge portfolio of formats and scripted TV to maximise who sees it and how it is monetised.

Canal Plus and Endemol have become their own online distribution network, doing for their in-house content what independent multi-channel networks do for a range of partners' work. MTGx's different approach has not created a direct pipeline for the group's shows to the online audience, but instead is intended to fund independent online content creation and optimisation while sharing in any rewards this might reap. Producers' digital divisions are rapidly becoming more coherent, moving from experimental, low-maintenence production to confident investments in defined entities. 

For media owners and content producers, the foray into online production houses is also a move to diversify their advertising revenues. Broadcasters in particular are realising that younger demographics are increasingly difficult to capture via traditional linear TV and are looking to online video advertising to monetise these audiences. However, online video content and thus advertising inventory remains limited. Investing in multi-channel networks offers a welcome opportunity to reach new audiences via new forms of content, on new platforms as well as to grow video advertising inventory. 

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