Why TV streaming services are winning in diversity

Too many British broadcasters still think in terms of linear broadcasting and the size of their overnight audience - and that is holding the diversity of their programming back.

According to a recent report by the UK media regulator, Ofcom, when it comes to diversity British audiences are increasingly finding better representation and authentic portrayal on Netflix and other online video streaming providers. Ofcom also found that the UK’s younger audiences (which are demographically more ethnically diverse) were deserting linear traditional television broadcasters and choosing online services instead.

So what are online providers getting right and legacy broadcasters like the BBC, ITV and C4, getting wrong?

Are the executives and commissioners at the online providers more enlightened and receptive to diversity compared to their counterparts at the BBC, ITV, Channel 4 and Channel 5?

While people are important I very much doubt that the difference can be attributed to just the different attitudes of a few individuals and commissioners.

Instead I believe the answer can be found in the different economic models between traditional broadcasters versus online video streamers.

Amanda Lotz, a professor of Media Studies at the University of Michigan analyzed Netflix’s economic model in 2017 and argued that traditional broadcasters still think in terms of attracting large audiences for a single programme as advertisers pay for eyeballs. (As an American she didn’t look at the BBC but I would argue the same argument applies as the BBC still looks to large audiences to justify its license fee).

Online streamers like Netflix and Amazon on the other-hand are not pursuing large audiences for advertisers – instead they are trying to maximize subscribers.

Professor Lotz says “To succeed, subscriber-funded services must offer enough programming that viewers find the service worthy of their monthly fee. Each show doesn’t need a mass audience – which is the measure of success for advertiser-funded television – but the service does need to provide enough value that subscribers continue to pay.”

Professor Lotz describes the strategy Netflix employs as “conglomerated niche” and says that because it does not broadcast in a linear fashion most subscribers don’t even know most of Netflix’s content and only concentrate on the series that appeal to them. She uses the metaphor of a library to describe this phenomenon; “If you were to ask different Netflix subscribers about the service’s brand, you’d likely get different responses. There is no one Netflix; rather, think of it as an expansive library with many small nooks and rooms. Most subscribers never wander floor to floor. Instead, they stay in the corner that matches their tastes.”

This means channel executives at traditional broadcasters think completely differently when it comes to commissioning content versus commissioners at Netflix. The BBC exec for example is thinking, “will the programme get a large audience?” while the Netflix exec is thinking, “will this new series be able to get a new different section of the audience to subscribe?”

The Netflix execs are constantly seeking out programmes that will get a different niche audience to subscribe or continue to subscribe.

Take my favourite series at the moment “Insecure”, it finally tipped the balance for me to finally take out a subscription for HBO Go, and I am sure I am not the only one. “Insecure” is therefore a win for HBO, in a way that commissioning yet another “non-diverse” programme would not be as it wouldn’t attract new subscribers.

Compare this to ITV or BBC. All things being equal the ITV and BBC commissioners would prefer to commission another series like “Call The Midwife” as it would bring in a far larger audience, even if it is the same old non-diverse audience that already watches the majority of their programmes, than commission “Insecure” which relatively speaking would be a ratings flop.  

This leads to far more diverse programmes being commissioned by broadcasters who are financed by subscribers. The irony is that in targeting niche audiences streaming services often create quality content which over time has a far wider appeal.

If you talk to executives of traditional broadcasters they all recognize the importance of commissioning for non-linear viewing and targeting certain demographics (for the last twenty years every commissioning meeting I’ve ever been to has talked about attracting a younger demographic). But it is still incredibly hard for commissioners to break out of a linear “big-audiences-matter” mind state.

The truth is as traditional broadcasters worry about big audiences now, they risk having no audiences in the future. Only by recognizing the rich diversity of their audiences, and creating programmes that they want to watch, will broadcasters survive.