Uncertainty is the New Normal
How the Black Swan Theory applies to the media and TV industry in 2023 and beyond.
Let me get this out of the way right at the start: uncertainty is actually always the prevalent characteristic of any prediction. We got so used to analysing industry trends and to scientifically scrutinise every corner of our markets that we all came to believe that we can control the future; that we somehow can predict its fate and safely plan our course. People like myself make you believe this: after all, I claim that I can help you to navigate all the trends, developments, the transformations and disruptions in the industry.
The thing is that I do not KNOW what the future holds. I can only ASSUME that certain things could happen. The benefit that I bring with my predictions is though, that they are often pretty accurate – based on reading some signs, assessing trends and often taking a bold guess on what “that thing” is out there on the horizon and how it is going to impact our industry. Instinct, experience and knowledge are some other ingredients in the recipe for a good industry forecast. Finally, the main distinguisher though is, that consultants like me have tools and methodologies to help our clients deal with such uncertainties and the future – and help them with these approaches to prepare for what might come.
One of the concepts that I use in my predictions for 2023 is the so-called “Black Swan Theory”. This theory was developed by Prof. Nassim Nicholas Taleb more than twenty years ago and basically says that human minds are biased towards the things we know and believe that anything outside of our knowledge is impossible. It got its name from the fact that people used to believe that a black swan does not exist as they only knew the white variation of this large bird; and while black swans are indeed very rare, they do exist. As a consequence of our biased mind, we often being surprised by any new invention or disruption, that is so weird, new and unthought of, that we up to then did not ever expect it to happen or assumed its existence.
If I apply this thinking now to our media industry and look for developments that are so out-of-reality and maybe even non-sense, I can likely come up with some disruptive ideas myself. For my predictions 2023 though I decided to mix knowledge of certain developments in the industry with the Black Swan concept: I created some assumptions about what could happen this year or in the very near future, that might sound a bit unrealistic at first, but not impossible – and at a closer look even quite likely. I prepare you for the Black Swans in our industry.
Are you ready for some wild guesses? Here are some Black Swans, that could emerge in 2023:
The Super Aggregator: who owns the hearts, minds and eyeballs (and the valet) of audiences?
The fight over who owns the audience’s attention becomes more fierceful. Given that the role of the cable operator on owning the last mile and controlling the living room has significantly diminished, it is now up to other players to become the consumers’ main programming director. OEM players have positioned themselves already. Big Tech like Google, Meta and Amazon fight for a spot, too. Models like FASTTV are a significant strategic tool in asserting the pole position and that is the reason why companies like Samsung and LG are becoming so heavily invested in that market. Yet, no true super aggregator has yet emerged: the one player that bundles attractive content packages with other features. Foremost, this super aggregator must have a formidable algorithm to curate, recommend and deliver the perfect, individual content mix for each user. I can imagine a black swan that is not yet in the market to enter that space and with some cool UX conquers the consumers’ hearts and eyes. If you have me guess on an existing player, I would not be surprised if Apple is working on something along these lines. And that brings us the the next big black swan: enter AI to the game.
The AI Player & Streaming Service: an individual TV experience for each of us!
We enter a period of developments that will focus on applying artificial intelligence to content and how it is being delivered and consumed by audiences. While we have already witnessed AI concepts being applied to how audiovisual content is being produced, we do not have yet a lot of offers on how this content is actually delivered and consumed. I mean in particular how AI is being used on content curation and recommendation: what if an AI algorithm can suggest to us every moment of our TV consumption the perfect content to watch? What if this algorithm is suggesting more than just content and recommends the proper dining experience or recipe to what we watched? You just watched Brooklyn 99 and you are likely in the mood of eating a burger and drinking a slush – here is where you can order it or how to prepare it. You just watched the Netflix Docu on street food in Thailand – and by the way, if you book your next flight to Bangkok now, you get a discount.
We already have individual, targeted advertising via Connected TV and models like FASTTV and AVOD. Would it not be natural to have individual content experiences as well.
My guess is that the Big Tech is working for sure on such concepts – talk Metaverse. However, I would not be surprised if such a black swan is coming from non-traditional big tech but rather from a player from China. A market where the government is heavily investing in reading and controlling people’s minds. ByteDance – owner of TikTok – comes to mind here…. And that leads to the next black swan
A major new, global FASTTV streaming service: TikTok for everybody.
TikTok is coming under close scrutiny in the US market and rightly so. We do not really know what this company does with our data (well, not mine, because I am not on TikTok). ByteDance will need to make a major move to secure their business and main markets. I am sure they consider either adapting the TikTok service to comply with standards – or they make a bold decision of merging it with an ‘accredited’ player. Talk about buying Netflix, for example. Wild guess: buy Twitter. But why spend money on some other company? Why not do it yourself. ByteDance has the resources to launch a global FASTTV player and become a true alternative to some existing streaming service: mainly going against PlutoTV. Moreover, as TikTok is already getting a massive share of the digital advertising market it could easily funnel more ad revenue into such a streaming service. And what about the content? Artificial intelligence will do a good part of that; consumers will produce content and then a lot of brands will also enter the content production scene. After all, everyone is a creator these days and each business is a content business. The future of streaming and FASTTV is in local, thematic and niche content. TikTok / ByteDance can address this market perfectly. They can spread their reach beyond existing users and target complete new audience segments.
The Sports Giant: whoever buys the game, wins the game
As often been told, sports is a must have content to make it big. And you need big money to own the game. Now, let’s talk about the elephant in the room. Big money for big, bold investment is not easily to get – especially in times of uncertainty. It is even less likely that this money comes from ‘traditional’ investors. Hence, we will witness the entrance of major investors in this segment from the Middle East (say Saudi Arabia and Qatar) or maybe Asia. There you have people / funds with deep pockets and the willingness to go bold, to go big and to create a Black Swan out of nothing: just look at the billions that Qatar used to make the World Cup happen or the massive money in going something so out-of-this world than NEOM in Saudi Arabia. The blueprint for a bold move and new sports player is coming from companies like DAZN and I would not be surprised if that company takes on such investors or partners with someone like BEIN Sports to conquer the sports entertainment market globally.
Bundling on Steroids: new, unthought of packages and maybe even mergers
Bundling is the mantra for all the entertainment executives these days. I talk bundling now beyond creating a nice sales proposition and the next neat promotion on the concession stand. I talk about entertainment beyond the TV channel or movie theater. Bundling must be thought of as really big. Bundling must be thought of as a Black Swan: think the unthinkable.
Hence, why not merge Pepsi with Netflix? Why is Nestle not buying into Disney? How about a hotel chain merge with a movie theater group and a fitness chain and introduce a completely new club experience? More likely so: Disney buys Roblox and Microsoft buys Netflix.
The News Players: a playground for big Egos?
We saw it happen: a big egocentric billionaire going into the news. One became a president, another launched a cable network and one other bought a social media platform. All of it was more or less a bad decision. But that will not hold back others from making the same mistake – or surprise us with a black swan.
It is being rumored that CNN is going to be put on the sales block and my first guess is that Jeff Bezos is going for it. But seeing also how erratic Elon Musk acts, I am pretty sure that he is handing in a bit,too. What could become very interesting though is if a non-US based global news player is eying a merge: say Al Jazeera.
I personally believe in News as a business and that especially as we are in a period of uncertainty, an important genre and market. There is a play for it; combine it with AI and some creative bundling, and any news business will excel. Just remember, the first big egos and media tycoons built their empire on a news(paper) business. They were black swans, too, back then.
The Digital Drop-Outs: a black swan that no one has yet seen
What if more and more people decide to not participate in the “digital society” any longer? I know, it is unthinkable. But that is exactly the point of this exercise here. It is not something out of space. In fact, this movement already exists. The so-called “Neo-Luddites” are a thing in parts of Europe, for example, and they advocate abstaining from social media and being too connected. It is becoming particularly popular amongst younger generations and you can see that less people sign up for Facebook, Instagram and so on. Data protection is one driver, but also the overall lessons learned from the pandemic and many other crises in the last couple of years, drive people to a more analog, secluded life-style. What if that becomes a mass phenomenon? It is unlikely, but not unthinkable. It might even happen faster than we think. Imagine a power grid falling apart for a longer period than just a few hours? Imagine a terror attack in some major global internet hubs? Imagine a new digital war waged amongst us from some lunatic dictator called Putin?
Are we prepared for that? If I am a newspaper tycoon, I might….But that is a Black Swan dream for myself.
So, how about you? What Black Swans can you think of?
With all the Black Swans now you must be so scared from too much birdlife like Tippi Hedren in “The Birds”. Yet, bare with me: a swan is a beautiful animal and in its nature not easy to digest (I’ve been told). Hence, if you want to understand these trends better and be prepared, talk to us: we can navigate you to these waters and guide you to strategies that address the uncertainties in the industry – even more, we might even help you to create a disruptive product yourself.