CME Boss Sam Barnett On How To Combat Netflix & YouTube In CEE

Traditional TV companies in Central and Eastern Europe (CEE) need to act now or lose their audience to digital giants like Netflix and YouTube.

That was the message from Sam Barnett, the CEO of CEE broadcaster Central European Media Enterprises (CME), during a keynote interview at NEM in Dubrovnik, Croatia, this morning.

“We are now ultimately playing against the American streamers,” he said. “Local media is hugely important – how we defend against the YouTubes, who are sucking up the advertising dollars and funnelling out to the U.S., and the streamers, who will come in and dominate the scene.

“Geography matters a lot and [while] the fact that we are a series of reasonably small countries with several languages, nuances of cultures and a mosaic of different content requirements is a barrier for consolidation for companies like mine, it is actually a big opportunity for us because it creates barriers to entry for the large American streamers. That means the local players have a bigger opportunity that ever before.”

The CEE region is relatively unique in the entertainment world, as digital switchover has been notably slower than almost everywhere else, as studies over recent years from the likes of Ampere Analysis have shown.

That coupled with high pay-TV retention and broadly smaller economies than counterparts in western Europe, the likes of Netflix and Prime Video have invested less heavily in original content. However, this is beginning to change, as Barnett noted.

“We have four pillars for our corporate strategy: Premium content, defend linear, grow digital as quickly as possible and build strong local brands,” he said. “If we don’t do the digital piece, we will become irrelevant within a few years.”

Questioned by BBC News moderator Kasia Madera how companies such as CME could compete with the budgets Netflix and co have to spend, Barnett replied: “They’re not spending $18B in this part of the world.”

He likened the situation as a battle of resistance, saying: “If you’re resisting, try to be a small country with large mountains, don’t be a large one with flat plains. [The streamers are] going to Germany, to France, next will be Poland, Asia and so on. It will be a while before they come here, which is where the opportunity is.

“Can we expand and invest in our local premium content development, using AI tricks or whatever else we can to make sure we’re producing world-class content so we can be that local content utility? When they come, people will still want their Netflix subscription, but they will also want the local content as well and we will be there.”

It’s not the first time Barnett has outlined a plan to defeat the global streamers. The former CEO of Middle Eastern giant MBC used his first interview as CME boss to tell Deadline about the challenge back in December. Just as he said six months ago, today Barnett called on the CEE’s main traditional media players to team up to combat the coming American wave.

“Linear, like radio, will have a very long tail and continue to be an important part of news, live events, sports and big shows, but we cannot afford to let the digital platforms go, hence our focus of trying to resist Netflix and the other streamers coming in and just dominating that space,” he told delegates. “We need the local media cooperating and working together to try to support that growth on digital.”