Endemol Shine Group eyes content deals with telcos amid wider industry consolidation

Endemol Shine produced a 10-part series, Brussels, for telecoms company KPN

Endemol Shine Group seeks to capitalise on the push from telcos to offer more than just ‘dumb pipes’ by providing the wireless network providers with the thing they most crave to turn a fading service into a diverse business - content.

The production powerhouse, jointly owned by Apollo and 21st Century Fox, is creating shows exclusively for telcos that have invested in TV divisions, a growing trend among the telecom giants.

"In 2016 we produced for 267 platforms, not all of these were broadcasters,” said Wim Ponnet, group director of strategy and commercial development at Endemol Shine Group.

“There are a huge number of emerging growth opportunities for Endemol Shine Group. Convergence between media and telcos is a fact and telcos are ideally placed given their incredible consumer reach.”

The first of these deals was unveiled in January with a 10-part series for Dutch telecoms company KPN, ‘Brussels’. The entire series, produced by Endemol Netherlands and written by Dutch writer Leon de Winter, aired at the start of the year on the subscription channel owned by KPN for viewers to binge watch. The content was offered free for subscribers to linear channels on IPTV as well as to subscribers of KPN’s OTT live and on-demand streaming service, Play.

Speaking at BCMA Leadership Series in partnership with Entertainment Lions, Doug Wood, group director of research and insight at Endemol Shine Group , said the production company is “increasingly finding telcos important for consumers”.

"Brussels performed very well on KPN and at the end of the day it’s all about content following the audience,” he said.

It’s a view echoed by Vice founder Shane Smith, who last month revealed the media company had struck eight partnerships with mobile providers worldwide including Vodafone, Verizon and AbemaTV to take its TV channel, Viceland, to mobile users.

"For us right now we’re in a speed race a sprint, to learn how can we get the [mobile] learnings before everyone else," Smith said at Mobile World Congress.

"It’s probably the most exciting time to be a content creator and it’s also the most exciting time to be a mobile carrier. The guys that used to lay cables are now going to be creating the most exciting content in the world."

The media mogul paraphrased comments he made in 2016 asserting that the consolidation of mainstream media will mean the big five media companies will become the big three, or even two, should Viacom continue on its "dramatic implosion".

“You’re going to see more mainstream media buying up media companies. There’s going to be this massive consolidation and M&A frenzie,” he said last month.

His comments refer to a number of recent deals between telcos and media, including the merging of Comcast and Dreamworks, AT&T's purchase of DirecTV, as well as the telco's current bid for Time Warner which is awaiting approval, and 21st Century Fox's renewed bid for Sky.

The convergence of telcos and media closes in with consolidation

Telecoms groups, riddled with shrinking wireless businesses, have been circling TV territory with content investments that provide them with the opportunity to create package deals and diversify their business.

In 2017, the 'year of consolidation', media observers predict the convergence of media and telecoms group to tighten as political headwinds loosen, and harsh economic climates call for greater diversification.

With the addition of TV, the telcos can bundle offerings across landline, mobile, broadband and TV - otherwise known as “quadplay”. It means one company can offer all the facets of a communications business and TV network.

KPN, which also made agreements to make TV productions with Mojo Concerts, ADE and the Eredivisie football league, is the latest in a string of telecoms companies looking to diversify into TV.

Most recently, Verizon announced last week (31 March) it would launch an online TV service hosting dozens of channels later in the year.

And with the appointment of Ajit Pai, an ex-Verizon lawyer, as the new Republican Federal Communications Commission (FCC) chairman, consolidation deals between telco giants and media companies face slacker regulation.

In fact, Pai said last month at Mobile World Congress (MWC) that net neutrality was “a mistake” and that the commission is now “on track” to return to a much lighter style of regulation. In February, Pai said the FCC would not review the proposed merger between AT&T and Time Warner, instead leaving it to the jurisdiction of the Federal Trade Commission, a move that could create the domino effect across the industry.

Jessica Goodfellow

The Drum's media reporter covering everything from publishing, TV, social media, radio and technology.

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