Interview with Jonas Engwall, CEO of Bedrock Streaming on the Current State and Future of OTT

In this exclusive interview with OTTVerse, Jonas Engwall, the CEO of Bedrock Streaming, talks about the OTT industry’s current state and future. He shares valuable tips for content providers looking to break into OTT about monetization, personalization, and what 2024 holds for the industry.

Jonas is a seasoned industry veteran with strategic and C-level experience for several years at the RTL Group and iFlix.

Bedrock is a streaming tech venture formed in early 2020 as a joint venture between M6 Group and RTL Group (part of Bertelsmann). It builds state-of-the-art streaming platforms, helping four broadcasters and media companies across four countries entertain 45 million users across all screens. Thanks to its rock-solid, fully cloudified, redundant and scalable platform, Bedrock can handle massive peaks in user traffic. With 400 highly-skilled team members and 15 years of experience, the company is on the path to becoming the biggest streaming platform in Europe for national premium content.

You can meet Jonas and his team at IBC 2023 in Hall 5, Booth C78.

Watch this exclusive interview here –

Krishna: Hi, everyone and welcome to the OTTVerse podcast. I’m your host, Krishna. And today, we are joined by a very special guest, the CEO of Bedrock streaming, Jonas Engwall. Jonas is a specialist in technology, business and operations and is here today to share his thoughts on the forecast, the future of the OTT revolution, what the next year brings for us, and how broadcasters can very seamlessly enter the OTT space and make a killing out there in a very competitive market.

Hi, Jonas. Thank you so much for joining us today. For the benefit of our audience, can you introduce yourself and Bedrock streaming?

Jonas: Thanks for having me. Maybe I’ll start with Bedrock and then I’ll come back to me. Bedrock is a company building video streaming platforms. That’s basically the only thing we do. We’re based out of Europe. We have 15 years of experience. We have approximately 400 people, most of them are engineers and obviously product people as well. 

We have almost 50 million users, and we focus on anything streaming, including SVOD, AVOD and Hybrid monetisation. And, in terms of content, we manage obviously VOD content, we have linear channels, we have live sports, so we have pretty much everything you can think of. We cover most devices (60-plus). So, we do most of what you can think of for big professional video streaming platforms. We have our head office in Paris but we are spread out over Europe.

A bit about me, I’m the founding CEO of what Bedrock is today. Bedrock has been a joint venture for almost four years between M6 group, which is a French media holding company and RTL group, which is Europe’s largest media company. And I’ve been doing media and tech for more than 20 years. I’ve been back in Europe for the last four years, and before that, I spent 8-9 years in Asia, including two years in India and a lot of places. That’s a bit about my background.

Krishna: So, do you miss India at all?

Jonas: I left India in 2012 or 2013. So it’s a long time ago. It was a pretty tough experience but a really interesting. and good experience. It’s totally different from what I was used to. But it was really nice. 

Krishna: My first question might seem a little odd. The OVP, or the end-to-end streaming market has a lot of competition. So what would you call out as Bedrock’s USP – what’s your strongest point? What makes you different from the rest of your competition?

Jonas: We are, to my knowledge, the only strategic player that has this kind of footprint and is also open to working with external companies. We have a pretty large universe within the joint venture, but we also have external partners around the table. We don’t see ourselves as a tech vendor, but as a partner. So, there’s lots of nuances and differences. I’ll just give you a very brief overview. We spend a lot of money and a lot of effort making sure that that’s the case. The ones that really benefit are media companies that have probably been the largest broadcasters or media companies in their country in the legacy world. And they want to continue to be in that world but also pivot into streaming, so they take streaming very seriously.

So what they get from us is obviously the tech platform that is continuously evolving. And, it’s an all-inclusive kind of setup. As the product and platform evolve, all of that becomes available to all the stakeholders.

And that is very important because, if you, today, would set up a brief and say these are the things I need for my streaming platform and then you go to talk to a couple of companies and if that takes two months, your brief is already outdated. It’s really difficult to keep up. And also the fact that we have major players from different countries all sitting around the table learning from each other. So, there’s a unique atmosphere with best practices, learnings, etc. So, all of this comes in a very neat package. And I think this is what differentiates us from a lot of other companies

Krishna: That’s great. It’s almost a natural segue to my next question. So when I look at the industry and companies trying to launch themselves or coming into the OTT space, there are a lot of content providers or probably on YouTube or other platforms like that, who are very good on content, very low on tech and they just pick a vendor and go with them. But the kinds of people you just spoke about have traditionally large tech teams to handle broadcast and cable. 

So I can imagine that business owners and product owners are in a bit of a dilemma – do I build or buy? So, when you meet such a prospect, what is your advice? How do you help them navigate because these people come from a legacy mindset, What’s your suggestion? What are your thoughts on this?

Jonas: So I’ll give you some numbers, which I usually do when we have this kind of conversation. It’s very easy to get sucked into “I should build, and I should own my own tech” because that’s a natural approach. It makes sense.

The only problem is for most normal countries, when I say normal countries, I mean, I exclude the US, India, and China which are huge markets. So companies operating in other countries will have difficulty finding scale in their market. If you’re in there, you will find scale in your market. That’s OK. So when I say scale, if you are a leading broadcaster in an evolved country and you want to have a top-notch streaming platform, you will be paying somewhere around the very lowest 50 million to probably around 100 million or even 150 million yearly to keep the tech running. And that’s not counting any marketing, content, or anything.

It’s about making sure the tech is smooth and good and seamless. I’m not saying that you cannot build a platform for less money. You obviously can, but I’m just saying from the data points that I have with people I know really well, and they tell me how much they spend.

If you’re OK, spending 50 – 100 million, then off you go, and then you encounter all the problems finding, right?

But I would say that most companies don’t want to spend that kind of money. And I think you automatically come into some kind of a buy scenario where you’re optimizing your structure a bit. And I think that you’re right; a lot of traditional media players have a legacy mindset. They think that they need to own the tech. And I think that most of the reasons are probably not that relevant. They’re more emotionally connected, etc.

A lot of people start out this route because nowadays, everyone has a platform. So they start this route, and many people feel the pain of doing this. When you invest money and build a platform, everyone is focusing on it. New features are coming out, and then you realize, oh, I have to maintain all of this. And new things are coming all the time – there’s a new device, etc. So it’s a really difficult task to undertake. So you are learning from those mistakes as well, I guess.

Krishna: Is there also a minimal set of features that you usually advise people to launch with? Because you could get sucked into this product track. I want this feature, I want that, let me also add a button to add to a list, and then a reminder. Where do you stop? Where do you say – Let me draw a line here, launch and then I’ll see what happens.

Jonas: You build a minimum viable product or a minimum level of products. Of course, you need to find a line. However, the way I see it, it’s fairly simple in most markets where a company is launching or is evolving its own streaming platform. If they’re a local player, their users will also have a Netflix or Disney account.

So to me, there is kind of a streaming standard, there’s a global streaming standard out there. It’s not 100% aligned. But if you want to be top-notch, you don’t need to have every single feature out there, but you need to have 80 – 90%, because it’s expected. It doesn’t mean every feature is used all the time by every user, but it’s there.

Because once in a while on Netflix, you want to do something and the feature is there and then when you get to that other local platform, if you try to do the same thing and then the feature doesn’t exist, you will get annoyed as a user. So this global streaming standard is that if you’re really serious about streaming, you need to more or less follow it. And of course, the standard changes and evolves, and it gets better, but you need to hover somewhere around that standard.

Krishna: Absolutely. I guess part of the standard that many companies are trying to crack is personalization. It’s this big gorilla in the room, right? where everybody is saying, hey, we are a hyper-personal platform, but then you spend 15 minutes trying to find your latest movie. Where do you see this heading? What’s your perspective? You’re working with millions of users, millions of devices. What’s your take on this? What do you think people are doing wrong? What do you think they should do to solve this problem?

Jonas: You’re right. Personalization is really difficult. It’s the holy grail of streaming, and it’s also the first thing people cheat on. Sometimes when companies launch a platform isn’t personalized. Because it’s so difficult to do it properly, I’ve heard anecdotal stories about people who have bought the platform. And they said in the brief, I want to have personalization. They receive the platform, and then they say, where’s the personalization?

And the vendor says, “yeah, yeah”. But here you have this row picked for you or whatever it’s called “content made for you”. So basically, sometimes personalization can be one single row.

Now, the way we approach things, we personalize everything. You arrive on your mobile on the platform, and the experience will be different from your TV. If you are watching football content, and it’s a football week, the experience will be different for you versus someone who likes cooking shows. So it’s not just one row. It’s everything – it’s your content.

Coming back to your question, I think this is fundamental, and many companies, including Netflix, talk about a 1:1 relationship. You ideally want to create a 1:1 relationship.

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Because if you take even Netflix – when The Crown launches, it doesn’t matter if you’re 15, 65, a girl or a guy for sure you will get The Crown, somewhere. So I think that’s fine. That makes sense because if you’re investing heavily in those titles, you want to push those, right?

Let me also give you another start – one of our partners, before joining Bedrock, told us thatone of many of their challenges was they only use two or 3% of their content catalogue. Why? Because it was not personalized, they were pushing the same content to everyone and people missed out on a lot of stuff. So that’s also a very important element. It’s really important to unlock content if you have a big catalogue and give people ways to find all these gold nuggets.

And what I usually say is we want to have 80% of our content. When I say content, I mean the thumbnails and pictures. I’m not talking about the video. We typically talk about 80% programmatic. When I say programmatic, it’s personalized in various ways, and then you probably leave 20% or so for the content owner to editorialize.

Krishna: I want to touch upon something you mentioned quickly. You’re saying that you can personalize the UI itself, something like a cooking week versus a Formula One week. If I’m interested only in Formula One, does my UI look slightly different? Is that what you mentioned?

Jonas: I mean, it’s not just about Formula One week. A Formula One fan who comes onto the platform will have a different experience from a cooking enthusiast. I’m using bad examples here. But you won’t care about Formula One if you’re a cooking fan. So even if it’s a Formula One week, you won’t notice. You will enter into a different experience, and as I mentioned, depending on the device, it can look different. All of this stuff is ultimately up to the content owner to decide. They might want to force everyone to see Formula One – that’s fine. But if they don’t want to, then they separate the experience, and they can create lots of different categories, etc. and clusters

Krishna: Shifting gears slightly towards business. We’re seeing a lot of ad-supported platforms being launched, a lot of companies now saying, “OK, we’ve been sustaining on subscription-based plans, let’s also introduce ads”. What’s your take? How do you see the industry evolving? Is it hybrid? Are people able to make their money back?

Jonas: Million-dollar question. So I’ll give you an example from our experience two years back to clarify it. With no exception, the SVOD platforms have added AVOD, and the AVOD platforms have added SVOD. So, everyone is a hybrid, which to me makes total sense.

You will always have customers having more time than money and vice versa. So, to me, having those levers to play around. So, what you can do with our platform as an example is that you have four categories of things you can play with to create the best experience for a user.

So you can take a lower or even free, OK, in the free package or the free offering – I’m not going to offer big screens. I will offer more. I’m making this up only on mobile. I will hold back certain content, have lots of ads, and will not allow certain features. And then the other extreme: you have no ads, you give more features,more content so you can play with features, content, ads and devices. You can combine all of those four intoa package that helps the user and optimizes your way to monetize.

And this is only the beginning. Free is great if that’s how it works. It’s different when you look at different markets. In Europe, you have a lot of traditional free-to-air players who became a platform and then offered an SVOD package. They tend to cost 3-4 euros, which means often better content, fewer ads or almost no ads and a better experience. And if you think about it, 3-4 euros is a Starbucks coffee that you pay once a month, and if you’re watching content regularly, that’s a pretty small investment to improve your experience.

So, I think companies like Spotify have done a great job teaching people to pay. And I think it’s a matter of time because it’s a very small investment. If you’re never watching, if you watch once a half a year, you can watch the ads and suffer a bit. It’s ok. But if you’re watching constantly, I think many people will take those comfort packages, and the content owner can monetize a bit better.

Krishna: Very true. What you’re saying translates into my head as content is king. If you have the right content, you have the right audience, then yes, you will find a way to make them pay.

Jonas: So we have a saying – I may be stealing it for someone. But it resonates with people. Content is king, but platform is queen, which, to me, is equally important. Obviously content is always first, but you need to have a strong good platform to convey the content to the user.

Krishna: Absolutely. And just going back to a couple of minutes ago, you mentioned that one of your customers could not exercise more than 2% of their content. So, with the right platform, discovery gets improved, search gets improved. You can bubble up all those latent long-tail content, I suppose.

Krishna: So Jonas, let’s assume we have launched a service. After a year of running my service, giving discounts, giving coupon codes, all of that I have built an audience, my audience appears to be loyal. But as my revenue comes in, I also see that my costs are increasing. Storage costs are increasing, CDN costs, cost of running my servers, my vendor might have changed their charges – all of this. So you come to this inflection point – Cost versus Revenue. I’ve spoken to many OTTs in the past and this seems to pinch them a lot. What do they do as the next step? You have seen businesses in your long career. Are there technical knobs that they can exercise or business knobs?

Jonas: Obviously, there are lots of levers you can pull. The basic underlying challenge is when you get a new technology like OTT and streaming coming along, then, suddenly, everyone thinks “I need to have a platform and it’s going to be the solution to the future etc.”, which is the case for some players. But, in my view, there are way too many streaming platforms.

That’s just the simple economics of things. They will consolidate just because you have to own a lot of content to sustain a streaming platform without consolidating or merging with someone. You have the big guys, the big US studios, of course, they are in a position to have a successful streaming platform. It is going to take a while, but I think they’re going to get there.

The same applies to big local companies. But beyond that, I think you’ll see a lot of consolidation or many content companies will simply sell their content to other streaming platforms. Because, as you said, it’s very costly to acquire those customers, maintain them and then run everything around it. So creating content and selling is sometimes a better approach, license your content into an aggregate, I suppose.

Having said all of this, maybe I can mention it because you mention that tech costs are increasing, etc. So, in our world, what we do, we have a pretty much a flat fee. There’s a small caveat: there’s a tiny inflation, and then, of course, if you double your streaming hours, your costs will go up a bit. But let us assume that you’re on a steady roll. Our cost will be pretty much steady, with a small caveat for inflation. However, the platform evolution goes steeply upward in terms of better stability, better coverage of devices, etc.

So why do we do that? It’s because we want people to have a way to predict a cost and to understand how this is going to pan out. Because, traditionally, you have a nonstop debate with your vendor, you want another feature, it costs this much and it’s really difficult to predict your cost.

Krishna: Suppose one of your partners comes and says, I’m running my own platform. But for the reasons you mentioned, it’s getting very costly for them. And they say, can you also send a play API to send a stream to another aggregator? There’s someone who’s starting an aggregation service. I also want to send my streams. Are you in a position to help them do this?

Jonas: I mean, if they are our partners? Yes. there are lots of ways of doing this – You can have an app-to-app approach where your content is discovered in an aggregator environment. And once they press play, you as a user, very seamlessly end up in your own platform. The benefit of that is you’re keeping all the data, you have full control. The downside is you’re absorbing the CDN costs, etc.

There’s also the other way around which is more managed services where you consume the content within someone else’s environment. We have customers doing both their pros and cons. I would say the trend is more going towards app-to-app because I’m speaking about high-end people, media owners. 

If you’re a smaller content company, you might want to go a different way because it’s cheaper. But if you’re targeting to be a local streaming champion, you probably prefer an app-to-app approach where you control the data and user experience.

Krishna: Finally, we are coming towards the end of 2023 already. Just a few days away from September, it feels like January was a couple of weeks ago, but unfortunately, this has been a tough year for the media industry. I’ve seen a lot of content, spending being reduced, ad spending, and many layoffs. What is your view of this year? And how do you see the industry going in 2024 and beyond

Jonas: Well, I think everyone sees the same thing right there for a while. Streaming was the focus for everyone. Money was for free. You only needed to grow subscribers. I think there was a reality check coming into everything this year, or maybe even the beginning of the end of last year. People started saying – “OK, wait a minute, we have to make money on all of this”.

Hence you see layoffs; you see streaming platforms increasing their prices and broadening their monetization models. I think this will continue in 2024. Most likely, I think streaming is the future, and it will be profitable but not for so many, it will be profitable for X amount of large players, and then others will merge, or they will find other ways. And I think, unfortunately, tough times will continue. I mean, war and these kinds of things are not helping. But I think we have another tough year ahead of us. That’s my guess.

Krishna: I like your point on consolidation because we’re seeing that very clearly in India, at least the major telcos Airtel, Jio. Then there are other TATA. They all have these super apps with 20-25 0TTs inside them. So you can seamlessly search across them. But then the next question comes: if all the OTTs are in all the apps, what differentiates them?

Krishna: So, Jonas, are you headed to IBC this year? What’s the best way to get in touch with Bedrock Streaming?

Jonas: We are in Hall 5, Booth C78. Come by, have a coffee or a beer.

Krishna: Thank you, Jonas. We wish you all the best, and congratulations on your journey so far.

Jonas: Thank you so much for having me.

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