K7 Media

K7 Media

We interrupt this business model…

K7’s Projects Director Phil Birchenall considers how the lines between production companies, ad agencies and brands are becoming increasingly blurred…particularly given the rise of platforms such as Netflix and Amazon.

Audiences have become immune to the advertising techniques of old. No longer content to sit passively through the commercial break, today’s viewers skip ads on catch-up or see the pause in their medium-sized screen entertainment as a perfect opportunity to dip into social media updates. We’ve become accustomed to entertainment on-demand, on our terms, and ads are an unnecessary distraction.

Netflix Original Tales By Light was entirely funded, and co-produced, by camera brand Canon

This creates obvious friction with traditional content funding models, and there are ramifications from this shift in the TV business as we know it. This presents challenges but, in turn, creates exciting new opportunities. The lines between production companies, distribution platforms, ad agencies and brands have become fractured. In their place, new relationships have been forged.

With the traditional TV advertisement losing traction with audiences, and a myriad of new distribution platforms capturing their eyeballs instead, it’s understandable that brands have ‘gone direct’; creating original content in an attempt to reach consumers, rather than taking the scattershot approach of peppering 30-second ads around other people’s shows. Once seen as one small tactic in the marketing toolkit, branded content has become vastly more sophisticated in the last twelve months than ever before.

BMW Films pioneered in the digital branded content sector, launching its cinema-quality series The Hire back in 2001. Arriving four years before YouTube, the original series was viewed an astonishing 100 million times, and in October 2016 the franchise was revived through The Escape, with Hollywood director Neill Blomkamp at the helm.

The Little Things, from Spanish lager brand Estrella, launched in the UK in May 2017. Directed by award-winning director Alberto Rodríguez and starring Jean Reno and Laia Costa, the 16 minute short plays to Estrella’s brand values of enjoying culture and meeting new people, and notched up an astonishing 5.2M views in less than a month.

But branded content is infiltrating our traditional TV viewing, too, and this is something we are going to see much more of. In April 2016 Swedish channel TV3 launched World’s Best Burger (Världens bästa burgare), in which celebrity chef Johan Jureskog undertook a culinary road trip across America to create – you guessed it – the World’s Best Burger. The show was 100% funded by McDonald’s, and though no branding appeared within the programme itself, each week’s creation was made available to purchase in the fast food chain.

As this blurring of lines between ‘content’ and ‘commercial’ continues, it’s no surprise that the business supply chain underpinning this shift is also morphing. We’ve seen well-respected TV execs popping up in roles within an agency structure. Similarly, we’re seeing a new form of production company emerge; responding to commissioners and brands alike to create ‘classical’ TV programming, branded content, and hybrids of the two. Spain’s NeverSeen Media, itself a part of Estrella parent group Damm, creates branded content alongside TV formats. The Story Lab, part of the vast global marketing and media group Dentsu Aegis Network, invests, produces and distributes content. Tresor TV, recently acquired by Keshet International, creates shows for TV as well as branded content. And that’s just a few examples from a list which is growing rapidly.

What’s particularly interesting is where brand-funded content appears to be heading. As Netflix and Amazon target a global subscription base, it’s unsurprising that brands have started to look at how they remain visible in this borderless on-demand landscape. Rather than heralding the death of the relationship between TV content and advertisers, it appears that the international reach of the major SVODs could provide an attractive new means of connecting viewers to products.

That’s a notion neatly underlined by the boss of agency giant WPP, Martin Sorrell, when he announced the establishment of Motion Content Group in May 2017. One of the key drivers behind the move was to ‘help advertisers continue to reach consumers in high quality content environments’; specifically referring to premium content companies ‘such as Netflix and Amazon’.

Late in 2016, Netflix debuted a beautifully-shot original documentary adventure series, following famous photographers as they traveled the world capturing exotic locations. So far, so unremarkable? The fact that Tales By Light was entirely funded, and co-produced, by camera brand Canon offers a glimpse of the future.

Given an SVOD subscription already comes at a cost, it’s unlikely many of us will stomach advert breaks during our favourite shows. However, if we’re watching a high-quality show relevant to an existing interest, funded by a brand in that particular space, we’re probably going to be quite accepting of that association.

When Amazon announced it had commissioned an as-yet-untitled documentary about cats earlier this year, the fact that Flare Studio – part of global marketing network BBDO – would produce the show attracted considerable attention amongst UK trade titles. What wasn’t reported was exactly why Flare had pitched the show to the platform, and though the show’s funders have yet to be revealed it’s worth noting that Flare Studio launched in October 2016 with just one client; Mars, owner of the Whiskas and Sheba cat food brands.

The international reach of the major SVODs is providing an attractive new means of connecting viewers to brands

With no ‘slot’ or ‘channel’ to conform to, how many other shows focussed on untapped areas of interest could find their way to a substantial global audience through great quality content, and what exposure does this offer brands willing to invest?

In a world where the models of old are crumbling, it’s clear that there are now opportunities for companies that can think in terms of more granular market segments, rather than crude audience demographics…which, funnily enough, is exactly what those in the ad world have been doing since the industry’s inception.

This article first appeared on TVBEurope.

Phil Birchenall

Phil joined the company as Projects Director in 2013 and was appointed to the K7 board in June 2015. With over 15 years in the creative, digital and media industries, Phil is responsible for the expansion of technology infrastructure to K7 Media’s growing list of clients.

Phil has devised highly regarded training schemes on international markets, leadership and management, intellectual property and digital technologies for a range of clients.

Phil is unashamedly obsessed by gadgets and the impact of new technologies on entertainment. He applies this knowledge throughout K7 Media’s work, adding his insight into emerging content and technology trends. As a proud dad, Phil also inputs on the latest developments in the kids TV space.