Why Big Digital Video and TV Networks Are Partnering Up
ADWEEK|May 16, 2016

The recent wave of programming pacts between the tv networks and big digital players has analysts wondering whether it’s the new normal or a culture clash waiting to happen.

T.L. Stanley

Television is dead—long live television!

That could become the unofficial motto, or at least the crawl at the bottom of the screen, to explain the recent flurry of hookups between digital players like BuzzFeed, Vice and Mashable with old-guard media companies such as NBCUniversal, Disney and Turner Broadcasting.

While BuzzFeed can get 800,000 people to watch a watermelon explode—live on Facebook!—and YouTube claims to reach more consumers 18-49 than any TV network, the digital world obviously thinks TV still has its charms. Hint: massive reach and enviable ad dollars from blue-chip brands

Though it’s not the only reason for the current wave of mergers, acquisitions and investment, TV is a driving force for the nascent relationships blurring the line between linear and digital and introducing sexy young things to a platform that is the very definition of old media. “Linear TV is vulnerable, yes, but it’s still a monster,” notes media analyst David Deal of David J. Deal Consulting. “And it’s not going away.” 

At least one much-sought-after digital darling not only believes this is the case but is making TV a top priority. Vice Media CEO Shane Smith announced the same week as its Digital NewFronts presentation this month that the fast-growing media company known for its grit and swagger is joining forces with ESPN to share, co-create and copromote sports programming across multiple venues, as part of an overall relationship with Disney. Pillars of the alliance include the award-winning 30 for 30 documentaries from the sports powerhouse telecast on Viceland, Vice’s new 24-hour cable network, and Vice’s in-your-face-style series on ESPN.

'“I applaud Shane for understanding that television is the smartest path to worldwide leadership,” ESPN president John Skipper was quoted as saying, with just the slightest wink, in Adweek’s coverage of the recent NewFronts. It follows Smith’s outsized boast to The Hollywood Reporter (Adweek’s corporate sibling) earlier this spring: “Twelve months from now, we’ll be on the cover of Time magazine as the guys who brought millennials back to TV.”

Smith’s extreme confidence aside, Viceland has had an inauspicious start ratings-wise, though its partnership with Time Warner’s HBO seems to be flourishing. But despite the uneven results thus far, digital bigwigs like Smith remain mighty bullish on the tube.

WHERE’S THE FIRE?

The list of legacy media players making alliances with digital companies continues to grow. Disney put $400 million into Vice, NBCU invested $200 million into BuzzFeed and another $200 million into Vox Media, and Turner put $15 million in the tech site Mashable. In fact, hardly a week goes by without another deal unfolding—E.W. Scripps buying the comedy site Cracked, Univision taking over The Onion, Verizon and Hearst acquiring Complex Media.

What’s the motivation? The bottom line, naturally. Pressure has built to the boiling point on old-school, publicly held media companies in the face of aging and fragmenting audiences and competition from over-the-top streaming services, viral videos and other entertainment options, analysts concur. “No one can get in front of their board of directors and say, ‘Here’s what we’re doing: nothing,’” says Tim Flattery, senior practice lead, content marketing at MEC North America. “You have to be moving forward. Standing still is not an option” There are parallels to be drawn between this moment and the music industry in the ’90s, when record executives presumed that digital downloads and the threat of emerging players wouldn’t unseat their reign. It seems unthinkable today, doesn’t it?

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