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Europe’s Answer to Netflix? Reality TV

To battle streamers, broadcasters are seeking to create “bonfire moments” with live content.

Europe’s Answer to Netflix? Reality TV
Equipment sits on the digitization floor at an Iron Mountain Inc. archival facility in Hollywood, California, U.S. (Photographer: Troy Harvey/Bloomberg)

(Bloomberg Businessweek) -- As Netflix, Amazon, and Apple steal viewers from traditional TV, one German broadcaster is fighting back—with a green-suited grasshopper, a rainbow-hued cockatoo, and a fuzzy pink monster with shimmering wings. The creatures appear in The Masked Singer, a mashup of game show and talent competition that ProSiebenSat.1 Media SE aired live on Thursday nights this summer.

B-list and C-list celebrities don the outlandish disguises and belt out pop songs, while fans vote on who progresses to the next round—and try to guess who’s hiding under the sequins, fur, and feathers. The Masked Singer averaged 7 million-plus viewers an episode, and for the finale the audience hit 9.5 million—helping the network reach its highest daily market share in 22 years.

It won’t likely win Emmys, but these are tough times for traditional broadcasters, and many have concluded that nonscripted TV is their best defense. The shows are relatively cheap, and with the right marketing they can win advertisers’ hearts by creating what ProSieben Chief Executive Officer Max Conze calls “bonfire moments”—events viewers will want to see in real time.

“Outside of football world championships, there are very few things where you can aggregate that kind of audience,” he said at a September media conference in Cologne.

Europe’s Answer to Netflix? Reality TV

ITV Plc, the maker of hit dating/reality show Love Island, has ordered a British version of The Masked Singer, a concept developed in South Korea. The show has since spread to about a dozen countries, including the U.S., where it’s in its second season on Fox Broadcasting Co. ProSieben’s German competitor RTL Group SA is producing a game show where costumed contestants navigate obstacle courses in the woods. And a Danish concept called Married at First Sight, in which two people first meet at the altar, has been sold to about 30 countries.

It’s a tacit admission that traditional broadcasters can no longer compete for high-profile dramas with the U.S. streaming giants and their mountains of cash. Netflix, Amazon, and Apple are projected to spend more than $20 billion on content this year, most of it scripted shows and movies.

Europe’s Answer to Netflix? Reality TV

The cost of producing an hour of drama in the U.K. has doubled or even tripled in the past decade even as ad revenue stagnates, says Tom Harrington, a researcher at consulting firm Enders Analysis. “There’s been a drop in commissioning dramas,” he says, as broadcasters “have less money to spend on something that’s getting more expensive.”

Europe’s Answer to Netflix? Reality TV

Instead, traditional broadcasters are turning to live content and gimmicks such as a camera following cops or debt collectors. Enders says the U.K.’s main free-to-air broadcasters have more than tripled the time devoted to nonscripted shows since 2002. In Germany the share of live programs, game shows, and reality TV at the three biggest private networks has more than doubled since 2000, to 43% of productions broadcast last year.

At TF1, France’s biggest free-to-air channel, scripted shows other than movies dropped to a quarter of content watched last year, down from a third in 2010, according to ratings tracker Mediametrie. The broadcaster has ordered its own version of The Masked Singer to air this year.

Europe’s Answer to Netflix? Reality TV

The other option for traditional TV, of course, is live events such as the Olympics or soccer’s World Cup. Streaming platforms have dabbled in sports, but it hasn’t always been smooth as their systems sometimes struggle with millions of simultaneous viewers. YouTube’s service crashed in the middle of the 2018 World Cup semifinal between England and Croatia, leaving U.S. fans fuming.

Later that summer, Amazon.com Inc. upset British tennis lovers with poor picture and sound quality during the US Open. But this year it streamed the tournament without a glitch, and in December it will start offering soccer matches from the U.K.’s Premier League.

A big sports push by the streamers would leave the broadcasters even more dependent on lowbrow fare such as The Masked Singer. With its sales falling, ProSieben last year was dropped from the DAX index of leading German companies. To boost revenue and cut costs, the company has shifted from U.S. sitcoms toward TV with a local flavor. A drag queen talent show featuring German model Heidi Klum as a juror hits the airwaves in November, and the broadcaster just started a second season of Joko & Klaas Against ProSieben, in which two popular entertainers work together to complete silly agility challenges and guessing games.

ProSieben also created its own streaming platform called Joyn, where viewers can see live TV, catch up on shows they missed, and check out streamed dramas and movies. The broadcaster is making its content “more local, more live, more relevant,” Conze said at the conference in Cologne. Shows like The Masked Singer create a buzz that “has huge power, and that power isn’t going away.” —With Angelina Rascouet

To contact the editor responsible for this story: David Rocks at drocks1@bloomberg.net

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