Don’t get left behind by change

On a trip to the States last month, primarily to visit friends and family, I decided to drop into LA to see what’s happening with some of the leading content players. I met with Hulu, Netflix and Microsoft, each of which left me with a different impression, from the emerging ‘original content’ strategy at Netflix to the real clarity of purpose at Hulu and the awakening of a new television production giant at Microsoft. I also spoke to Google and YouTube, and came away convinced of three things:

First, the demand for top-quality content is only going to increase, and more and more power will shift to content creators. Second, the scale and pace of experimentation will drive ‘quality’ improvement at exponential rates, creating new competitors for viewing eyeballs from outside the traditional TV industry. And third, the UK risks underestimating the pace of change. Want proof? Well, have you seen Video Game High School, from 27-year-old Freddie Wong, whose YouTube channel ‘Freddiew’ hosts content with more than 5 million subscribers? Set a few years into the future, VGHS is the elite high school for gamers.

Wong funded series one on Kickstarter, the crowdsourcing site where people pledge money in return for gifts and credits as opposed to equity. He asked for $75,000 and got more than $250,000. The series was made as a number of webisodes for YouTube and offered as a feature-length show for secondary distribution; it has now been seen by more than 50 million people.

Buoyed by this success, in February Freddie asked the Kickstarter community for $600,000 for season two; he’s raised nearly $1 million. But Freddie won’t have to spend money on interior sets for the high school; these come free of charge at the YouTube Creator space at Playa Vista, LA.

YouTube now invests more than $100m into channels led by content creators like Wong. The free Creator space deal is part of its attempt to improve the quality of content. There’s also a smaller facility in London.

Freddie’s new series will be a more traditional TV format of 25-30-minute episodes. With commercial sponsors like Dodge, primary distribution on YouTube with a second window via Netflix, Hulu and others, Freddie’s essentially in the TV business.

UK broadcasters may currently be immune to pretty much everything in this blog, because their funding is secure (BBC) or their prominence guaranteed in law (all PSBs) – but will that last? ITV, Channel 4 and Channel 5 are facing an uncertain ad market and the licence fee’s set until 2016, but there are no guarantees beyond that. There’s a real battle for prominence on screens and EPGs as distribution becomes more fragmented through web, mobile, smart TVs and other devices.

No single web channel creates a crisis, but the collective impact of Wong, and thousands more like him, nibbles away at the advertising base and viewing time.

They are also building loyal, engaged subscriber bases, which they can monetise in all sorts of other ways. That’s why we broadcasters need to experiment with form, structure and business models, like the iPlayer drama shorts and interactive comedy pilots.

Real change is coming, and quicker than many people think. Now’s not the time to be complacent.

Pat Younge is chief creative officer, BBC