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Upfronts season: As two BVOD markets emerge, is Netflix and co’s entry a validation of SBS’ premium strategy?
With Netflix now live in the Australian ad market, SBS boss James Taylor reckons the broadcaster is ready to succeed in the 'premium BVOD market', welcoming the competition from Binge and Disney+ to come too. With low ad load and a world-class offering, he says it isn't looking at Seven, Nine and Ten, which are simply aiming to replace linear consumption, while SBS is 'larger than we've ever been' after successfully cannibalising itself in recent years.
Netflix is officially live in market with its ad-offering in Australia, and SBS managing director James Taylor reckons not only is this not a threat to his own ad-supported streaming business, it is an affirmation of the broadcaster’s strategy.
“The first thing I’d say about the entrance of Netflix and others is that it’s a validation of our strategy,” Taylor says on today’s Mumbrellacast special. “It’s a recognition that that’s an important part of the ecosystem to be operating in as the ecosystem has matured.”
He says the strategy for SBS OnDemand has always been to be highly differentiated in the BVOD space, have a premium content offering, a world-class digital experience, and a low-clutter, low-minute environment.
“It certainly will provide more competition, but we welcome the competition in part because it endorses the important role that premium video environments play for advertisers and for audiences alike.”
Taylor builds on a point made by media sales director Adam Sadler at last week’s upfront, that a second BVOD market will emerge now that Netflix is taking an ad-supported route, and with Disney+ and Binge to follow, as he insists the commercial networks are simply looking to replace lost linear share.
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“I think we’re seeing a creation of two markets, the premium in which I’ve described, and then the end which I assert the commercial free-to-airs play in, which is much more about using their BVOD platforms as live streaming destination to replace linear consumption, with a much higher ad load which replicates their linear offer.”
Welcoming new competition
SBS’ ad load sits at around five minutes per hour of viewing across both linear and OnDemand, which is less than half of the commercial networks, and sits at around the same mark as Netflix, which promises between four to five minutes per hour.
And for this, Taylor says he is really comfortable with the position SBS occupies, and encouraged by the increased competition, even pointing out that visiting the Apple App Store will show SBS OnDemand as the highest-rated streaming platform in the country, “which is no small feat for an operator the size of SBS”.
“It’s a real endorsement of our strategy and a source of comfort for us as we move into next year.”
The FIFA World Cup live on SBS OnDemand this month, with coverage of every game
The fact of the matter remains that linear consumption is declining across all networks though, but again unlike other networks which have seen headlines emerge about linear TV remaining the ‘apex predator’ and why it remains the only place to reach one million Aussies in a single evening, Taylor says the SBS way has to always been to be where audiences want to be.
Cannibalising ourselves
“So the development of SBS OnDemand has been the work of many years and our philosophical view is that we have no concerns about where audiences wish to consume our content. What is important is that they want to consumer our content.
“They know what we stand for, and that we have a world-class offering waiting for them where they want to be. So what we’ve been able to do over time is effectively cannibalise ourselves, which is to allow people as they shift off linear platforms to find value in our digital platforms, which means that overall we’re larger than we’ve ever been before.”
Taylor adds being able to say this is “not something a lot of operators, and particularly legacy media operators around the world can say, that we’ve been very successful because we’ve seen that as an opportunity for us to ensure that it’s us cannibalising ourselves, and not someone else.”
Listen to the full Mumbrellacast interview with James Taylor and Tanya Denning-Orman, where the pair also cover NITV’s looming 10th birthday with SBS, how it plans to cover a looming Voice to Parliament referendum, this month’s FIFA World Cup, its content slate, and why its bullish on 2023.
Calum Jaspan was news editor at Mumbrella, based in Melbourne. He was also the producer and host of the Mumbrellacast. He left Mumbrella in May 2023.
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