To survive in the contemporary TV market you need either a huge audience or a highly engaged niche audience, says Jorge Urrutia, the VP of digital monetisation for US multimedia company Fusion.
Formerly the VP of operations at The Huffington Post, Mr Urrutia will be in Sydney this month to speak at the ADMA Global Forum.
Mr Urrutia told The Newspaper Works that as viewers increasingly moved away from large bundle cable subscriptions to customised multimedia consumption and services like Hulu – where users can individually pick a selection of content – channels will have to communicate better to a specific target market or audience.
“When you look at the number of channels that you’re getting [in a bundle], you’re going to see that you’re getting 100 or 130 channels.
“Now, I think the average cable user or subscriber watches about 10 channels a month… so, at some point, if the economics of cable suffer and people stop subscribing or stop paying their bills or want to pay less money, there will be less channels in the bundle.
“So basically you could be ESPN, which is a channel that everybody in the world wants to watch because they have really unique, great sports content, or maybe you could be a very good niche channel that doesn’t attract a lot of people but that is very valuable for the people that it’s attracting and that’s what Fusion would be. If you’re in the middle you’re dead.”
Fusion, a joint venture owned by the Disney-ABC Television Group and Univision, launched in October last year targeting millennials – primarily those from a Hispanic background – and with an ambition to reach audiences wherever they are. “That means television – which is the way we started – but it also means digital, social media, offline channels like events,” said Mr Urrutia.
“We’re trying to adapt to our audience and our audience is in multiple channels or multiple outlets, they’re not as stuck to TV as previous generations were, many of them don’t have a cable subscription.”
“They spend most of their time in digital, a lot of what they do is go to social networks like Twitter or Facebook or Instagram or Tumblr, so we need to adapt and we need to put our content there.
“Tweets can be a source of information and you can create content via tweets, it’s not just a way of distributing the content.”
The company has created significant media buzz in the US recently, after signing up finance journalist Felix Salmon from Reuters, Jezebel founder and writer Anna Holmes, user experience designer Hong Qu, who worked on the initial development of YouTube, journalist and a founding editor of The Daily Beast Jane Spencer and others, in the last several months.
According to Mr Urrutia, Fusion does not yet know whether its cable product will continue to be its primary source of revenue into the future. The company plans to build its presence in all channels and ultimately market trends and the areas of its successes will determine its primary sources of monetisation.
Currently around half of the company’s audience accesses its content through mobile or tablet devices. While Fusion does not currently offer a premium mobile streaming service to cable subscribers, those subscribers can access shows on demand from their mobile, as well as their other online content.
The network’s focus on millennials has to do with it wanting to provide a service for young viewers that “cuts through the rhetoric and dry conversations” to issues that directly affect the younger generation. It also has obvious commercial incentives.
“We actually have a panel of about 500 millennials, who we typically test a lot of the approaches that we use to target them on and get their opinions and learn more about how they think and how to communicate to them,” said Mr Urrutia.
“They want to feel valued, and that’s also one of the things that they consider when they’re looking for a job, which is very important.
“They have a lot of spending power, I think they’re going to have over $3 trillion spending power by 2018, so they’re going to become commercially very significant, they’re going be over 50 per cent of the workforce by 2030.”
While Fusion does not have plans to expand internationally, Mr Urrutia said that considering its focus on Hispanic communities, it would make sense to explore the idea of moving its brand into Latin America. While he was at The Huffington Post, Mr Urrutia was involved in many of the European expansion deals, but said that the company was in a different situation at the time to where Fusion is now and that “once [we] have a model that is tested and tried and true domestically,” then opportunities to expand will arise.
The ADMA Global Forum will be held at the Sydney Hilton from Monday, July 28 until Friday, August 1.
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