To Netflix the spoils as the old guard is eclipsed
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?