Year in Review: The top trends of 2018

An action packed 2018 saw top TV firms establish new frontiers by defining SVOD plans, finalising acquisitions and hiring top talent around the world. Here are some of the highlights that outlined our year. 

Netflix reigned supreme

In 2018 Netflix has reached 137m subscribers and bagged talent from the Obama’s to Ryan Murphy and Sharp Objects creator Marti Noxon. Despite cynicism over its extraordinary content spend – now expected to be a fair bit over the originally planned $8bn for the year – its shares rose by as much as 80% up to December.

The streamer’s biggest play of the year has been to deepen its international reach by investing in international originals. Spanish original La Casa de Papel, Brazil’s 3% and India’s Sacred Games were repeatedly quoted as some of the most popular titles on the platform from Netflix execs.

This was furthered by the launch of a fully-equipped production hub in Madrid, Spain and a commissioning base in London, which has since hired execs from Sky’s drama chief Anne Mensah to Canal Plus factual head Diego Buñuel.

The company has stated that there will be at least 70 international originals in place for 2019, and 12 of them will be based in India – a key territory for growth.

With 80% of the company’s new subscriber growth coming from international audiences, it’s no wonder that content chief Ted Sarandos said this area of the business will be a core focus for 2019.

Elsewhere, the streamer tied with HBO for the first time in Emmy wins, ending HBO’s 17-year streak as leader. Its most popular titles of the year include The Crown, Black Mirror and Godless. It is also banking on The Umbrella AcademyThe Dark Crystal and Witcher to become its brand-defining titles of 2019.

While the streamer is looking at some stiff competition in 2019 from new Disney, AT&T and Apple platforms, it’s safe to say 2018 was the year of Netflix. 

Disney, AT&T & Apple prepared for battle

Disney, AT&T and Apple spent most of their year laying out plans for full-service streamers that will take on the dominance of Netflix in 2019.

Perhaps the most anticipated of the lot has been the Disney+ service, due to launch at the end of 2019. Every detail on the platform, whether minor or major, received the full attention of TV execs and shareholders alike.

Throughout 2018, TBI has worked out that the mouse house will focus on family-friendly content for its Disney+ service, while Hulu will be adult-oriented and populated by the Fox content it is to inherit via its acquisition of the company in 2019.

Disney CEO Bob Iger also revealed during the company’s final earnings call of the year that Disney+ will have localised content in its libraries and that all of Disney’s 2019 theatrical releases will end up on the platform.

Over at Apple, it was revealed that the platform’s first slate of originals – which includes projects from Reese Whitherspoon, Steven Spielberg and Damien Chazelle – is set for launch in spring-summer 2019.

While 2017 was the year that Apple named high-profile projects from well-known talent, 2018 saw the tech giant invest more heavily in children’s content. In December, it signed an extensive deal with DHX Media for new Peanuts content including new shows, specials and short films. Earlier in the year, the platform also teamed with Sesame Workshop to create a slate of kids’ programming.

TBI found in September that Apple has been circling projects pitched at Europe’s Cartoon Forum, which is based in Toulouse, France.

As the streaming battle heats up for the best content, Apple also focused on signing high-profile talent to its platform, bringing in Oprah Winfrey in a multi-year deal to create original programming and Fast and the Furious director Justin Lin and his production banner Perfect Storm Entertainment.

Meanwhile, AT&T shuttered the DramaFever and Filmstruck services it inherited from Time Warner after completing its acquisition in June, and set plans for a three-tiered service packed with HBO, Turner and Warner Bros. content.

The streamer’s bosses, AT&T chief Randall Stephenson and WarnerMedia CEO John Stankey, have been more forthcoming than their competitors around plans for the platform, revealing that the service will be more expensive than HBO Now, which charges $14.99 per month. They have also laid out intentions to make the most of existing content within the group, shunning the content “warehouse” style of competitors such as Netflix.

Broadcast execs flocked to SVOD

Broadcast execs scrambled to top jobs with streaming platforms in 2018 as their influence continues to grow and impact the industry.

One top move included Channing Dungey’s shift to Netflix to become VP of original content after 14 years at ABC, inclduing three as entertainment president.

Sky UK’s drama head Anne Mensah also left to join the platform in November pointing to a major strategy shift that could see the commissioning power shift in the UK’s favour.

Channel 4’s former head of factual entertainment Lucy Leveugle joined Mensah in Netflix’s London office, where she will focus on unscripted content from across EMEA.

The Netflix London commissioning office opened in June with the hire of Canal Plus exec Diego Buñuel who joined as director of original docs for the division.

Other notable Netflix hires include Alexi Wheeler, who joined the platform in the kids and family content division in EMEA from Nickelodeon, and Ben Cavey who joins Netflix’s comedy team from Endemol-owned Tiger Aspect.

Elsewhere, Amazon tapped NBC Entertainment president Jennifer Salke to become head of content to replace Roy Price, who departed amid sexual harassment claims in late 2017.

Apple also looked to broadcasters for staff and hired BBC Films veteran Joe Oppenheimer as a creative executive for its international team – led by former Channel 4 creative boss Jay Hunt.

The tech giant also hired Paramount Network’s Dana Tuinier as creative executive for comedy within its Worldwide Video unit.

Europe: Brexit & Quotas

The UK government’s Brexit negotiations have dominated headlines over 2018 as the nation struggles to reach a clear deal with Europe, affecting businesses both in and out of the state.

At the start of the year the Commercial Broadcasters Association (COBA) warned the UK government that Brexit could cost the nation’s television market £1bn (U$1.4bn) per year in investment from international broadcasters.

As the UK prime minister Theresa May has progressively failed to reach an overall deal with the EU, COBA has gone on to warn that a ‘no-deal’ Brexit would have a “disastrous” impact on the UK broadcasting sector.

The UK’s culture secretary Jeremy Wright reassured during this year’s Edinburgh International TV Festival that UK broadcasters are a “vital” part of Brexit negotiations and that he will support them to retain talent and also work towards keeping the free movement of talent.

This has already been called into question by the UK Screen Alliance, which has said that the UK’s post-Brexit immigration plan, which was revealed in December, will damage industry growth and add costs.

Elsewhere, Creative Europe issued advice to UK organisations on how to coordinate existing or upcoming funding programmes in the case of a ‘no deal’ Brexit. One key aspect of the guidance revealed that the government has provided reassurance that it will underwrite the payments of awards for the UK organisations that have already successfully bid for funding.

A list of international distributors also told TBI on the annual distributor survey that while they are yet to see impact on their business from Brexit, many of them predict they will do so in the future.

European content quota caps were also hotly debated in the past year, with the European Parliament, European Council and European Commission reaching a final agreement to impose a 30% quota on SVOD services.

Although Netflix denies that its recent investment in Europe was a direct result of these quotas, the platform pledged this year to increase the number of European titles it produces by a third in 2019.

Disney CEO Bob Iger has also confirmed that its upcoming Disney+ will be tailored for “various European markets”.

Elsewhere, in the UK media companies have started looking deeper into its regional ties to set up base, like in the case of Channel 4 which has selected Leeds as its base for its national headquarters in October.

The world looked to China

In 2018 China became the second-largest TV market in the world with TV programming expenditures reaching US$10.9bn and 46% of that figure attributed to international content acquisition. It’s not hard to see why every major international TV player is questioning whether to dip their toe into the market.

Many already have this year, striking high profile deals. Fremantle struck a pact to take My Brilliant Friend to iQiyi; Endemol Shine Group adapted its Humans drama format with its China division; and CBS Studios International also took The Late Late Show with James Corden to iQiyi.

But despite China’s growth, many still remain divided on how to approach the territory. Its new restrictions set by the Radio and Television Administration in September stated that it would outlaw foreign TV shows in their entirety for prime time (7-10pm) and place a 30% quota on streaming platforms for any imported content, among other restrictions. It left many confused about how welcome their work is in the territory.

Further controversy struck when the nation was named Country of Honour at this year’s MIPCOM. International format protection group FRAPA particularly took issue with the decision after experience numerous IP theft claims by international producers in recent years.

One TV entity that does not look to expand its business in China is Netflix. In December’s UBS Media Conference Ted Sarandos said that work with the territory has been, for the most part, a “frustrating distraction”.

Acquisition frenzy

If 2017 saw media giants working up to further consolidation, 2018 was the year they finalised them.

Disney finally set in motion its $71.3bn acquisition of 21st Century Fox assets in July after a months-long bidding battle with Comcast. The merger has been approved by shareholders and the US Justice Department and must now wait to sell off its regional sports networks to complete the merger.

Peter Rice, president of 21st Century Fox, has told staffers that the merger will complete around spring-summer 2019.

As a result of the merger, Comcast set its sights on acquiring a majority stake in Sky, which is shared with 21st Century Fox. After battling it out with Fox, and raising the acquisition price to US$40bn, Comcast closed the deal in October.

Another consequence of the Disney-Fox merger is that Endemol Shine Group, co-owned by 21st Century Fox and Apollo Global Management, was put on for sale for $4bn from June.

After a string of high-profile suitors dropped out of the bidding race, including ITV, Fremantle, Banijay Group and RTL, the sale was called off by Fox and Apollo in November.

Meanwhile, AT&T has come a long way from tussling with Trump for the go-ahead on the Time Warner merger. In June, the entertainment company received the go-ahead from a US Federal Judge for its $85bn acquisition.

While AT&T has moved quickly to set up plans for a giant streaming platform with the newly renamed WarnerMedia, it will still have to await the results of the US government’s appeal of the judges’ ruling, due to emerge in the first quarter of 2019.

Australian media giant Nine Entertainment also completed its merger of Fairfax in December, creating a company with a combined market value of $4.2bn. The move sees the company gain full ownership of Aussie streamer Stan as well as a string of newspapers including The Sydney Morning Herald and The Age.

Breakthrough formats

Formats made an impact in 2018 and the UK’s Love Island led the pack, smashing ITV2 viewing records with 3.5m viewers at premiere alone.

The dating format is also set to appear in local adaptations around the world. CBS has secured a US edition of the reality series which is intended to lead a brand refresh for the network in 2019, while the Australian edition, which aired on Nine Network, gained so much popularity ITV placed it in its UK-based VOD service ITVHub.

Nordic territories Denmark, Norway and Finland are also set for local editions, along with a second series in Germany on RTL2.

Elsewhere, Channel 4 and Studio Lambert format The Circle also burst onto the scene late into the year, gaining an overnight audience of 1m on opening night.

The fresh concept, which sees a group of contestants living in separate apartments in a single building communicate entirely on a specially made social media platform, was quickly snapped up by Netflix, which will launch the format in the US, France and Brazil.

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