To Net­flix the spoils as the old guard is eclipsed

The Sunday Telegraph - Money & Business - - Business - Ben Mar­low

When was the last time you watched ter­res­trial tele­vi­sion? In the Mar­low house­hold, “nor­mal telly”, as us sim­ple north­ern­ers like to call it, rarely gets a show­ing these days. In­stead, view­ing takes place al­most ex­clu­sively through Net­flix. The speed at which this trans­for­ma­tion has taken place is re­mark­able. Our chil­dren, who are five and two, watch noth­ing else. Yet, only a few years ago my wife and I were still watch­ing the BBC and ITV. Now, we rely on catch-up for main­stream chan­nels.

I sus­pect this is true for many other fam­i­lies. The in­ter­net and stream­ing has changed the way most of us con­sumes en­ter­tain­ment be­yond all recog­ni­tion.

There was no greater ex­am­ple of the rapidly shift­ing trends than last week’s news that Ru­pert Mur­doch was con­sid­er­ing sell­ing the bulk of his Fox em­pire to Dis­ney, es­pe­cially when the Mur­dochs are in the mid­dle of a politi­cised sec­ond at­tempt to take full con­trol of Sky.

Such a sit­u­a­tion seems even more im­prob­a­ble when you con­sider that the fam­ily, one of the most pow­er­ful me­dia dy­nas­ties, have spent the last 50 years care­fully build­ing their em­pire.

Yet, when you look at just how pro­foundly Net­flix and its Sil­i­con Val­ley ri­vals Ama­zon, Ap­ple and Face­book are re­shap­ing the me­dia land­scape, per­haps it isn’t so shock­ing. Sky is ex­pected to lose mil­lions of satel­lite sub­scribers over the next few years. That’s a huge fig­ure.

In the past fort­night, BBC di­rec­tor gen­eral Tony Hall has warned that Bri­tish-made TV such as Strictly Come Danc­ing and Broad­church is un­der “se­ri­ous threat” from Net­flix.

Even the “mad men” of ad­ver­tis­ing are strug­gling as main­stream TV au­di­ences de­cline. Two profit warn­ings this year from WPP have brought to an end decades of growth. In the run-up to Christ­mas, many peo­ple are catch­ing the big, fes­tive high-street ads from the likes of Marks & Spencer for the first time on Face­book and Twit­ter, rather than their home tele­vi­sion.

This year, the Christ­mas ads arms race is fiercer than ever. In its des­per­a­tion to en­sure this year’s ef­fort is a hit, John Lewis has turned to Os­car-win­ning French film di­rec­tor Michel Gondry.

The power of Net­flix re­ver­ber­ates be­yond sim­ple view­ing habits. It isn’t over-egging it to say that its weak­en­ing of the tra­di­tional movie stu­dios paved the way for Har­vey We­in­stein to be ex­posed.

Yet, surely the ul­ti­mate dis­play of might is when a me­dia house ex­er­cises real po­lit­i­cal clout. Mur­doch’s big mo­ment came in 1992, when The

Sun claimed in a fa­mous head­line to have pro­pelled the Tory Party back into gov­ern­ment but per­haps Net­flix can al­ready go one bet­ter.

The House of Cards se­ries grad­u­ally nor­malised Machi­avel­lian be­hav­iour at the high­est level of US pol­i­tics, in­ur­ing the elec­torate to shock. Would the White House still have got a show­man pres­i­dent with­out Con­gress­man Frank Un­der­wood?

‘Weak­en­ing of the movie stu­dios paved the way for We­in­stein to be ex­posed’

Unilever’s spread bet

Paul Pol­man has done an ex­cel­lent job prov­ing the doubters wrong since send­ing Kraft-heinz pack­ing back to the States at the start of the year. Many in the City thought the fiery Dutch­man was far too quick to re­ject its bid, es­pe­cially given Unilever’s lack­lus­tre share price in the pre­ced­ing years.

Pol­man, to his great credit, wasted no time in re-en­er­gis­ing the An­glo-dutch go­liath. Earn­ings jumped 20pc in the first half. Profit mar­gins have im­proved, and Pol­man has promised fur­ther boosts to the bot­tom line.

Unilever hit a bump last month when sales missed forecasts but largely the hard work has paid off. Unilever’s shares are up 28pc since the ap­proach, enough of a gain, one would have thought, to pre­vent an­other of­fer. The re­main­ing ques­tion is whether Unilever will turn its back on Lon­don, ditch­ing its com­bined head­quar­ters and dual list­ing to be­come a com­pany based in Rot­ter­dam and listed only in Am­s­ter­dam.

The City fears such a rad­i­cal move is on the cards but more press­ing is the planned sale of its Flora mar­garine arm, a key part of Pol­man’s shake-up. It should be rel­a­tively sim­ple to pull off, but Pol­man has to con­tend with Unilever’s Dutch works coun­cil, which is threat­en­ing to call for strike ac­tion if po­ten­tial buy­ers don’t pledge to pro­tect jobs and pen­sions. As most of the bid­ders are pri­vate equity, that’s un­likely to hap­pen. Could the dis­pute force Pol­man to re­con­sider?

Newspapers in English

Newspapers from UK

© PressReader. All rights reserved.