Evan Shapiro delivered one of his signature, rousing addresses as StreamTV Europe kicked off in Lisbon today, calling on everyone working across the media and entertainment system to address the challenges in the business by making the right choice at the fork in the road we find ourselves at: take the direction of the future, he said, “don’t cling to the past.”
Shapiro’s keynote began with a comparison between two major Hollywood entities: FOX and Paramount Skydance: “two companies that are very similar in their genetic code, both run by family enterprises, both traditional media companies. But a couple of years ago, Fox looked at the two paths moving forward, and they chose to go away from the path that is the industry trap.”
After selling much of its assets to Disney, Fox has been “reinvesting the cash flow from the sale into a billion-dollar portfolio of creator enterprises,” from the AVOD platform Tubi and Red Seat Ventures to aligning with the likes of HOLYWATER and Dhar Mann Studios.
“Meanwhile, Parramount made one tech or creator move since [Skydance] took over—they bought a Substack and gave the writer 60 Minutes and CBS News to destroy. Rather than reinventing late night, they just replaced Stephen Colbert with Comics Unleashed. And rather than investing in creators and technology to change their company, they’re putting $110 billion into a very legacy company with no future-looking strategy behind it, and they’re going to go $80 billion in debt. This is the familiar fork. This is the comfortable fork because we’ve done it before, but this is the Hollywood mogul fork that we know is not working.”
Shapiro called on media executives to avoid the familiar fork and embrace the affinity one. “By leaning into fandom, by focusing on our users, by focusing on our audience, by radically super serving the fans who come to us for our stories, we can choose the fork of the future. And what’s crucial about that is understanding who the audience is.”
Shapiro discussed changing audience dynamics, with 70% of the world’s population being millennials and younger. “If you think your media enterprise can speak to generations, millennials, and younger, who grew up with supercomputers in their pockets, who have had social media in their hands since grade school, you’re out of your minds. You have to change the way you do business, because the way people consume has dramatically shifted, not because of technology. Technology is there, and it is definitely the tool that makes new consumption possible, but the generational shift of the population of the planet Earth is what always drives innovation. That’s what drives change. And you need to see the world through the eyes of younger consumers in order to see the whole consumer.”
He pointed out that YouTube is no longer a young person’s platform, with more than half of Gen Xers using it regularly. “Gen Z consumes five times the amount of social video of boomers. Traditional media is losing audience on a consistent basis every day.”
He added, “We thought as an industry that streaming would replace television, one for one, in audience and in revenues. That’s not happened in reality. What’s happened is that television has been replaced by the combination of streaming and social video. You have to think of the whole consumer, not the television consumer and the mobile consumer, not TV or mobile, not horizontal or vertical, but the whole consumer, wherever they go.”
Shapiro spoke about the cratering of the pay-TV ecosystem and how that left so many media companies scrambling. “The pattern that happened to pay TV is happening to paid streaming,” as subscribers churn their way to multiple SVOD services. “11% total retention. And the revenues are flattening from subscription, which is why they’re all moving into ads very quickly. As a result of this, production around the world, orders for new programming, is falling very quickly, and it’s moving from premium entertainment on most platforms into lower-cost productions, but it’s really moving into sports, and it’s creating a great monoculture across traditional media that is incredibly boring to younger generations, which is why they’re spending so much time on social media.”
Millennial habits are becoming the norm as YouTube takes a greater share of living room viewing across demographics. “This is happening all over the world. That’s why there are a billion hours of YouTube watched on TV every single day.”
YouTube is TV, Instagram is on TV, TikTok is coming; “so if you don’t embrace the idea of social video as part of the television diet, you’re missing half the consumer… You have to be on all the screens that your consumers use. Fragmentation is the new norm, but it’s also the operating system of the media ecosystem right now. We are in a radically fragmented universe where attention is more competitive than it’s ever been. If you’re not prepared to compete in radical fragmentation, this may no longer be the business for you. If you can lean into the fragmentation, the cure for it is fandom. The cure for it is affinity. The cure for it is engagement.”
Consumers don’t make the distinctions between creator and mainstream as they’re switching back and forth between social video and mainstream platforms. “I see one ecosystem behind that piece of glass that I touch first thing in the morning, and even when I throw it up to that big piece of glass on the wall, this new merged ecosystem, this collision and combination of creator media and mainstream media, that is where we are today. It is how you reach the whole consumer. It is how you build fandom and an affinity. And in this new ecosystem, it’s not going to be driven by reach and frequency. It’s not going to be driven by GRPs. It’s not going to be driven by a top-down ivory tower programming mentality that doesn’t consider the entire consumer and the entire population. It’s going to be driven by community. It’s going to be driven by love. It’s going to be driven by fandom. This is what I call the affinity economy, and it has a new set of rules, and when you embrace it, you can win in this new ecosystem.”
Fandom, Shapiro continued, “encourages consumption, and you can measure your fandom, frankly, by the average revenue per user. The more they give you, the more they want to give you, the better you are doing. The creator culture is now invading every aspect of mainstream media, including what is happening to television. It is verticalizing right before our eyes. Premium vertical television is becoming a component of the media ecosystem. You can reach consumers on social video in ways you can’t on television, and brands need more premium environments across media, including social video. When you think about brands, think about them acting like a creator.”
Shapiro cited a fantastic nugget of info about Unilever, which has expanded from 10,000 creator relationships in 2023 to 300,000 this year.
After providing a range of examples from “traditional” media companies that have embraced the creator economy, Shapiro returned to the yes/and framing: “We must do both. We can center ourselves around the fans. You can think about the affinity economy as a way to future-proof yourself when you lean into engagement as a metric, when you lean into your fans, when you put your fans at the center of everything that you do, and you think of them not as consumers, but as your community, that is how you will succeed. That is how you’re going to be judged. That is how you get an audience. And in this economy, this is how you retain the audience. When you put your consumers at the center of everything you do, the answers become a lot easier. If you can put Gen Z and millennials in the room when you make your decisions, you can avoid the pitfalls that a lot of companies are making today, and you can do more than just survive in this new affinity economy. You can actually thrive.”
