Cecile Frot-Coutaz tells MIPCOM that future growth will come from YouTube, global expansion and scripted formats
With a baby on the way, a nascent YouTube talent-show business and numerous TV franchises to juggle, is there a risk of Simon Cowell losing his focus? FremantleMedia chief executive Cecile Frot-Coutaz isn't worried.
"Simon's very focused," she said during a keynote appearance at the MIPCOM conference in Cannes today. "Simon works 24-7, he's always up, always watching the shows. His focus is not an issue."
As the producer of the X Factor, Got Talent and Idols franchises, FremantleMedia would be forgiven for following Cowell's focus closely, at a time when The X Factor in particular has been accused of losing its mojo.
Frot-Coutaz praised the latest series of the show in the UK though. "It's doing really well this season: it's up year-on-year, and the creative changes to the show are working," she said, while accepting that the talent-show genre is much more crowded than when her company launched Idols 12 years ago.
"There's some erosion in the markets, but having said that those talent shows – and we have three of the bigger ones – all still perform way above their broadcasters' average," she said.
"They are arguably not as big as they once were – and they were once absolutely huge: Idol is a cultural phenomenon in the US – but they're still big. Just not as big as they used to be. But in 2013, we will be making more versions of every single one of those titles than we did last year. There's still demand for them."
The bulk of Frot-Coutaz's MIPCOM speech focused on emerging digital platforms, with YouTube looming large. FremantleMedia currently has 135 channels on YouTube based on its existing shows, and expects them to generate around 8bn video views this year, attracting 66m monthly unique viewers.
"We're very bullish on digital, and our view of it is that you cannot ignore the views, the creativity and ultimately you cannot ignore the economics of it," she said, citing stats suggesting younger audiences now average up to 30 minutes a day watching video on mobile devices or online.
"Some of that is linear content and some is nonlinear content, but more importantly, the time they spend watching TV has gone from four hours a day to two hours," said Frot-Coutaz. "If you compare the stats with the overall population, they watch on average an hour and a half or two hours' less, so you can't ignore any of this."
FremantleMedia's parent group RTL has invested in two multi-channel networks (MCNs) on YouTube: BroadbandTV and Divimove, as steps to scale up its business on Google's video service.
Frot-Coutaz said that these companies bring FremantleMedia technical platforms, cross-promotion, search optimisation and analytics, which the company sees as the "backbone" for its future strategy on YouTube.
"The next step is to create new verticals. It's not so much about a single programming brand, but about communities of interest who are really passionate about a given interest," she said.
"That's why scale is so important: if you're going to do something around fly fishing, it has to be on a global basis, otherwise it's not monetisable. That's why you need that backbone."
FremantleMedia isn't launching a fly-fishing channel on YouTube, though. Instead, it's likely to focus on lifestyle verticals: food, fashion and possibly cars. "Ultimately, our view is it's about premium content. It's no different to what we do in our traditional linear business," said Frot-Coutaz.
Pressed on whether FremantleMedia is getting a return on its investment in YouTube, she said that the company is "already making money – it's still small, but we do monetise it today" while declining to predict whether subscriptions or advertising will be the most lucrative business models in the long term.
Netflix, Hulu and other subscription video-on-demand (SVOD) services may well become stronger partners for FremantleMedia, complementing its YouTube business. The company already sells some programmes to these companies, and distributes some of Hulu's original shows internationally.
"In the mid-term, we'd love to be in the original production business for these platforms. The great thing about a platform like Netflix is it changes the game quite a bit. It's not about a programme being everybody's favourite programme," said Frot-Coutaz.
"You just need to be somebody's favourite programme, so it's producing things people are passionate about. It enables different kinds of programming to be able to exist. 15 years ago when we were in a purely broadcast world, you could only survive if you made shows that appealed to absolutely everybody, in the broadest sense."
FremantleMedia may be best known for its talent and game shows, but the company is investing more in scripted formats, with Frot-Coutaz saying this strategy is about more than simply following cyclical TV industry trends.
"Scripted is a channel-defining genre, and it also builds a library. This business is about owning IP and building libraries, and anything where you're building a library, you know in the long run it will be valuable," she said.
"Right now, 30% of our revenues are scripted. If in five years it could be 50%, I'd be happy with that."
Frot-Coutaz added that acquisitions will continue to be part of FremantleMedia's strategy, predicting more consolidation in the independent production market, but politely deflecting a question about a move for rival Endemol.
"One of my goals is to scale up the company, and to do that across new genres, digital also being obviously part of it, and in terms of geography," she said.
"We will need to use more of our capital to get things funded and made. If you're going to have to take more risk, you're going to need to have more scale. It's easier to take risks when you're a bigger business."