Sweden Helps Define The Future Of TV

While traditional television broadcasters struggle to adapt their vast empires to the new realities of YouTube, smartphones, tablets and time-shifting viewing devices, nimble newcomers, including Stockholm’s United Screens, MTG and Magine, are seeking to shape the future of TV by redefining the way content is transmitted, consumed and monetized.

Changes in media consumption have created possibilities as well as challenges for production companies, content creators and copyright holders. Viewing on digital platforms is on the rise and traditional business models are constantly competing with legal and not-so-legal alternatives.

Industry observers agree TV will increasingly be consumed on multiple screens, a trend that has already been intensifying in recent years. Advertisements will be ever more tailored to the individual viewer and may appear in the content as product placements. On-demand viewing will also become more of the norm. Some in the industry argue that the most popular shows will no longer be watched through television networks, but will rather become their own brands, selling directly to consumers.

“Coupled with the widespread availability of high-speed wireless Internet, today’s viewing experience is more interactive, more consumable and far more sharable in real time,” says a report released this year by Accenture. Almost two out of every three television watchers is at the same time using a computer or laptop, according to the report.

All of these changes are having a big impact not just on the way content is consumed but on the way it is monetized.

Digital advertising was only half as large as television advertising in 2011, but it will be two-thirds as big this year and three-fourths as big in 2016. (More than $42 billion will be spent on advertising on digital media this year in just the United States and that will increase to $55 billion in 2016, according to eMarketer).

The share of digital advertising spent on video is still relatively small — last year just under 8% of the total or $2.9 billion — but that percentage is expected to almost double by 2016. It is still unclear how the trove will be divided among content producers, platform developers and distribution channels like YouTube.

Enter United Screens, which was founded in April this year by four of the Swedish media industry’s top names and Bonnier Growth Media, a subsidiary of Bonnier AB, the Nordic region’s biggest media company, which invests primarily in digital media and film and TV.

United Screens’ offering consists of new programs, live broadcasts, news, series, podcasts, trailers, feature films as well as many of Sweden’s most popular programs from traditional TV.

The idea is to work with media and production companies and copyright holders to increase the revenue streams of their content.

“Our mission is to help partners get more views and make money on their content,” says Stina Honkamaa Bergsfors, chief executive and co-founder of United Screens and a scheduled speaker at SIME in Stockholm, November 12th and 13th. “Right now YouTube is the best platform for that; if other platforms come up we will help our partners on those as well.”

United Screens’ channel network offers a selection of different channels, developed to fit the interests of different target audiences. The viewers navigate the different channels via United Screens’ main channel on YouTube. There is a choice of programs on the different channels that viewers can watch via their TV sets, smartphones, tablets or computers. The programs include advertising based on the target group’s profile and the individual users’ own interests. The income from the ads is shared by United Screens, the copyright holder and YouTube.

The approach provides advertisers and media agencies with varied new ways to reach a new breed of TV viewers. And it is free for all viewers, who will be able to see programming when they want it, on whatever screen they want.

Internet-First Business Models

An important part of United Screens’ operations will be helping Swedish and Nordic media companies further distribute, get paid for and make the most of their programs on the Internet. There is a lot of content from media and production companies in Sweden that isn’t available on the Internet, primarily due to copyright restrictions and a lack of licensing models that work with today’s media consumption. Under United Screens’ business model, that content can be made available for viewers while creating revenue for those owning the copyrights. It also can be content that is already on the web but the creators aren’t being paid for it today.

United Screens, which launched in September, already has 30 content partners and that will soon reach 50, according to Bergsfors, 41, who formerly headed Google Sweden. Google has in fact been a breeding ground for Swedish media entrepreneurs. Rikard Steiber, executive vice president and chief digital officer of Swedish broadcaster Modern Times Group (MTG), another scheduled speaker at SIME, worked for Google for six years including as director of product marketing for Europe, the Middle East and Africa and subsequently as global marketing director for the mobile and social advertising business.

Both Bergsfors and Steiber bring a totally different perspective to TV: one that provides digital content, management and business models that aren’t merely adapted for the Web but were created from the beginning for the Internet.

“Focusing on creating a great user experience is key at Google and with television having a good user experience is definitely key,” says Steiber. “At Google you learn that you must innovate or die so you’re always coming up with new ideas to make the user experience better. At Google you also learn that you don’t have to invent everything yourself because there is lots of innovation and knowhow in the ecosystem. That’s useful to remember for a company just starting out.”

While at Google Steiber oversaw the launch and ongoing marketing of products such as Google+, YouTube, Android, Chrome, maps, Adwords, analytics, DoubleClick and AdSense.

MTG operates around the world, but principally in the Nordic countries, the Baltics, Russia and Ukraine. The company offers both free and pay-TV including premium movies and sports.

“We’re innovating on the technology side, but also on how we package and offer things,” says Steiber, who defines his job as accelerating all things digital in MTG — no small task considering the company’s vast operations. “The context is changing as people turn more and more to mobile. Maybe on mobile you want shorter episodes; perhaps you don’t want to wait a week for the next episode.”

Facilitating new ways for people to snack on content on different devices is also the raison d’etre of Magine, a Stockholm-based start-up founded in 2011. The company has a cloud-based TV delivery platform that allows users to watch video live or on-demand on any device with an Internet connection while respecting copyrights. Magine is available in Sweden, Germany and Spain and in July said it planned to roll out the service in five more markets by the end of the year. The company, which doesn’t disclose financial information or release any numbers on the uptake of its services, has raised $19 million from unnamed Swedish and international investors.

Magine says it is not trying to upend the television industry, but rather expand it by licensing content and helping broadcasters make their channels available to as many people as possible. The business is based on a freemium model where premium content can be purchased.

“The free base (of content) is always free and consists of public and free-to-air broadcast channels along with a rotating promotional pay channel that gives the user an idea of an outstanding TV experience we can bring,” says Mattias Hjelmstedt, CEO and co-founder of Magine.

For its part, United Screens is giving producers, whether they be YouTube-creators or media companies, a way to reach more viewers and monetize their creations. Monetizing is, of course, the holy grail as finding a viable way to turn a large user base of video consumers into a sustainable business is still not obvious.

One of the content producers that have signed up with United Screens is Tumba Ping Pong Show, which since 2011 has been posting videos, including one that has been seen more than two million times, of people doing daring stunts with ping pong balls. While not everybody finds joy in watching ping pong balls being bashed and caught by silent Swedes, the videos are a window onto what has helped make Sweden a Mecca for new media companies.

“Sweden has for many years had a good reputation when it comes to producing good TV content,” says Bergsfors. “That is part of it, but just one part. “We’re a big country compared with the population and consequently the Internet is more important here than in other countries. It is a prerequisite to get a business growing. So with the future of video online it’s natural that Sweden should be at the forefront right now.”

Magine’s Hjelmstedt also cited Sweden’s high Internet speeds and ubiquitous Internet access — the European Commission recently found that two out of every three Swedes have an Internet connection of least 10 megabits per second.

Along with high broadband speeds that make accessing content easy, “Swedes love new lifestyle and tech concepts, making it a fantastic test market,” Hjelmstedt says. “At the same time entrepreneurship is becoming a readily-accepted means of making a living and together with our social security system makes people willing to take larger risks than in the past.”

To be sure, the big players are not going to stand by and let newcomers divide up the pie only among themselves. Chief among the giants adapting to the new reality is Sveriges Television, Sweden’s national television broadcaster, which makes 98% of its content available beyond the traditional television set. The service can be accessed from just about anywhere in the country on a multitude of devices and most programs remain accessible for 30 days.

“As long as you have compelling content, you offer it on whatever screen people are using and you make it available on demand as well as live then you’re safe because there is a shortage of good-quality content,” says Eva Hamilton, CEO of SVT, another scheduled speaker at SIME. “That is especially true for countries with a small population. There aren’t too many people who want to produce quality dramas in Swedish.”

A second key element for the future is mobile, says Hamilton, who adds, “I’m not worried about all the start-ups; on the contrary. Their work supports what we are doing. Almost every Swede has access to broadband and there is a great demand for programs, which means you can test out a lot of things. If it had been only early adapters or a small part of the population it would be a different situation.”

The hope is that all of the innovation around consuming and monetizing video and TV content in Sweden will be noticed in Los Angeles, New York and other media capitals.

“Ideally Stockholm and the Nordics will become a hub, a landing strip for U.S. companies that want to come to Europe,” says MTG’s Steiber. “It doesn’t have to be London. We can help some U.S. companies come to Europe and create excellent content and services that are then brought back to the States.”