Turning point in the flow: imagination gives way to reality

Not only does Netflix actually have to lay off hundreds of employees and adjust program strategy, HBO Max (which won’t be coming to Germany for now) is also curtailing its global ambitions and shutting down several productions in Europe, as Variety reported on Monday. for the first time. The audience will feel all this only after a delay, it can be relieved: the oversupply of platforms and content and the diverse market of series has almost reached the point where it is impossible to find good content to the level of saturation on Christmas Day.

© Warner Media
Cancels several European projects: HBO Max

The production scene, in turn, is already feeling these course corrections. When Netflix cancels a German series a few weeks before filming begins or HBO Max halts several series projects in Scandinavia as well as developments in the Netherlands and Turkey, it’s not just bittersweet for the creators and production companies affected. The impact goes beyond that: uncertainty in the production industry about how much carefree growth fantasy still exists in the streaming business, because so many of them were carried away in the euphoria of the first few years.

Entire structures were created to serve the presumably ever-increasing appetite of streamers. Anyone who did not already have it, but it was worth the effort, founded a production company for high-end fiction. Or for documentation, but at least a section for it. If there is anything that can outperform many streaming services, it is the number of startups supplying the golden age of streaming. More and more platforms, more appetite for program hours and always unusual? This picture is cracking.

In fact, they have been around for a long time, but have been ignored. When Netflix had to correct its expectations for subscription developments this spring, some media outlets referred to it as a “Netflix shock” because the cost side of global expansion was often considered for the first time. This has been the case for far too long in the perfect streaming world – and as a synonym for trend, especially with Netflix: budgets are unlimited, guts are extraordinary and all conventions are invalid – because everything keeps growing.

Without numbers, everything can be successful

In the absence of transparency in usage figures, broadcasting seemed like heaven. The creators also welcomed the “No More Quota Focus”. Without the published numbers, everything can be successful if the picture is correct. And this was true for broadcasts. When Netflix came to Germany in September 2014, it wasn’t just a sought-after brand in the general market – it also seemed to be that many journalists were drunk and remained so for several years. Finally, someone shows the slow public service announcer and the nondescript private broadcasters how to do it right.

Red Hastings
© IMAGO / Hindustan Times
Reed Hastings, CEO of Netflix

Reed Hastings, a CEO who traveled to Germany from California at the time, didn’t have much to fear from criticism. On the one hand, this was due to the peculiar longing of local cultural pessimists for an entertaining messiah that might save us from supposed ruin — and lack of insight into performance, i.e. viewing numbers, for Netflix products.

In good succinctness, as befits the media in America’s executive suites, a meaningful interview with Reed Hastings was more difficult than pinning a pudding to a wall. DWDL fails – he never publishes the blank conversation, causing a stunned German PR agency, but in the end it didn’t matter. Photos and interviews abounded, with no one embodying the apathy of the new broadcast quite like the undeniably charismatic Red Hastings. Netflix, that was a feeling. Criticism was rarely directed in the early years.

It took me a little longer to realize that streaming services also offer mediocrity or even nonsense. And that it couldn’t pay off in the long run if traffic was too low and competition intensified – it took a few more years. And then most recently the negative news from Netflix, then the sudden production halt of many HBO Max products and developments. Not only the leader in streaming services, but also the next generation cannot or will not continue to invest billions per watering can across the markets.

The days of watering could be over

Bella Bagaria
© Imago Photos / Starface
Netflix CEO Bella Bagjaria

Projects are tested here and there, and ideas for potential orders get tougher. The new creative freedom that made live broadcasts more appealing to writers is fading away. Until a few months ago, no niche was considered too small for serial production because it could be big enough globally. Netflix TV president Bela Bajaria, among others, but also its president, program director Ted Sarandos, has often argued this way. But that argument is getting a little outdated for Netflix and HBO Max — and that was to be expected.

For years, the streaming services have somewhat lied to themselves when they have been celebrated for their sometimes raucous local productions – and that doesn’t tarnish creative accomplishments. You can invest a lot in niche or individual markets because the software can also be used at your service internationally. That sounded great, and did well in discussions on the podium and in interviews. Creative people were also allowed to enjoy interviews in which broadcaster X or Y finally dared to do what no one else had dared to do. And then the story gets a global audience too!

The only problem: this was more of a wish than a reality. From a purely legal and technical point of view, many series on Netflix, Prime Video or Disney + can reach a global audience – and they do so as long as there are far more non-German subscribers on all international streaming services than there are German ones. But only a few products from international markets were discovered in sufficient numbers and became a worldwide success. You didn’t always have a ‘Dark’ or ‘Squid Game’ – hence refinancing by international exploitation doesn’t work enough. Surprise: some banners have to earn money.

Neorealism is moving to the broadcast market

Amazon Prime Video
© Amazon
So glad you’re local: Prime Video

In Prime Video (where refinancing as part of a customer loyalty program is a completely different matter), there are still large productions with international ambitions, but they are welcome to offer insurance with them, for example in the form of a well-known model to reduce risk. “We are the children of the Bahnhof Zoo,” for example. Regardless, people are now happy to invest in super local production: the sequel “Pastewka”, “Switch Reloaded”, “Die Discounter”, German “LOL” or “Der Beileeper” – none of these were produced with international ambitions. It also costs less.

It’s the neo-realism moving into the streaming market, first among those who had to learn it dearly as pioneers, but Telekom has now also left the market for fiction in-house productions and Netflix, the previous example of high-end series, is now increasingly popular also in the reality TV genre – like competitor German RTL +. Customers seem to love it. The reality of “sunset selling” brokerage, to name a few, became a cult and costs so little that even smaller cable stations in the United States have been able to afford it.

Reality outweighs imagination

The costs are lower, the chances of success are higher and production lead times are much shorter. Currently, non-fiction content is very popular with streaming services – good for all documentary modules created by German production companies and Discovery + reboots. For audiences with a penchant for soap operas, this development does not naturally mean that there will be no amazing fantasy material to be seen. But even international broadcasters are now explicitly asking producers in Germany to provide crime stories – because that’s what Germans prefer to see. And the difference is already in width in linear TV is shrinking.

Younger streaming services wanting to establish themselves or differentiate themselves in Germany are still digging their pockets to impress with their first domestic productions: Disney+, for example, with its first German in-house productions, or Paramount+, which will come to Germany in December with In that local production. The creators are interested in the fact that (as is the case with ARD and ZDF with their own media library attacks) the readiness for new material is greater. But will they permanently invest in German creativity as much as Netflix and Amazon do?

+ AppleTV
© Images Imago / PhotoTech

Incidentally, AppleTV+ shouldn’t be suppressed, but as a largely Hollywood-centric service with only hesitant localization, it can’t be judged yet. German originals have not been announced. It wouldn’t be the first time that Apple allowed others to explore the depths of the market first, only to come later but then avoid their mistakes. And what about RTL +? On the other hand, according to voices from the producer market, the coherent strategy between valor (“KBV”) and mainstream (“Der Schiffsarzt”) will change surprisingly often. The search for success in Cologne is because the production of the image alone is too costly in the long run for Bertelsmann’s outstanding project.

After carefree years, we are seeing an inevitable professionalization of broadcasting not necessarily with less investment but more focused than many providers. Global players, long acclaimed without any criticism, are returning to the “level playing field” for a certain level of profitability that German market participants often want. From a competitive perspective, these are going to be exciting years. However, from the point of view of fans of the series, difficult times are for truly unusual material, because refinancing is becoming more important and more mainstream will come.

Not tomorrow for the public, but the day after tomorrow.
For creators today.

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