Banff ’18: Kevin MacLellan on Hayu’s Canadian launch

NBCU's chairman of global distribution and international discusses the SVOD's rollout, working with local broadcasters and competing globally.
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Canada, be prepared to say ‘Hayu’ to NBCUniversal’s unscripted SVOD in September 2018.

NBCUniversal’s chairman, global distribution and international, Kevin MacLellan announced the OTT platform would launch in Canada this fall during his company of distinction keynote conversation with Corus executive VP and COO Barb Williams at the Banff World Media Festival on June 11.

Owned by NBCUniversal, Hayu offers reality series such as Keeping Up with the Kardashians and The Real Housewives franchise. In May 2018, the U.S. net announced its SVOD would enter the market before the year’s end.

Following a short video about the SVOD, Williams asked what most executives in the room where likely thinking: How will Hayu coexist with Canadian linear channels that have licensed NBCUniversal unscripted content? Channels, for example, like Corus’ Slice.

While MacLellan didn’t get into specifics regarding how NBC is working with Canadian linear broadcasters, he said that he’s been open and collaborative with partners in every territory where the service has launched, figuring out ways that Hayu could be mutually beneficial. In the U.K., for example, Hayu launched on Virgin Media and was offered at no extra cost to its highest-tier TV subscribers, or for a fee to other TV subscribers.

“By going to [our partners] first and saying, ‘Let’s do this together and figure out economic models that work for both of us,’ I think that’s been really successful,” said MacLellan.

The models are different in each country where the platform has launched, stressed MacLellan – including in Canada.

“It was difficult to think about [Corus] and Bell being in a joint venture together with us because it’s really about [Corus] and Bell being potential partners, more than us being concerned about a joint venture with both companies. So that didn’t happen but it could of, we were hoping to,” said MacLellan, noting that NBC has tried to be transparent with all of its partners as companies try to find their footing in a world dominated by online services.

“The fact is OTT services are coming. We cannot stand against the shore and try to hold back the tide,” he said.

MacLellan did acknowledge that in the territories where Hayu has launched, linear viewership of NBCU reality programming has dropped, though he stressed not more than overall linear viewership.

While Williams said she’s “not crazy about the idea” of Hayu launching in Canada, she respects that OTTs will continue to enter the market and Canadian broadcasters need to come up with new, collaborative business models.

“Canada is unique in that we are so dependent still – and maybe this is our challenge to address – on so much American content. When Hayu comes into the territory, or CBS All Access comes into the territory, or Disney brings their app into the territory, and so on – and they are all going to happen – we in Canada really have to figure out what this means and how we can have partnerships that are meaningful to the life cycle of the content.”

MacLellan suggested the Canadian broadcast industry could benefit from collaboration between players in order to compete against the threat of big multinational companies. He pointed to BBC, ITV and Channel 4 in the U.K., which are said to be considering launching a British TV streaming service. “I really believe that Canada could benefit from something close to that.”

During the question and answer portion of the session, a conference attendee asked one of the morning’s burning questions: Will Cancon be available on Hayu?

Similar to what NBCUniversal has done in other markets, MacLellan said yes, the net will acquire content to appeal to audiences that want to see their local content on screen. The platform will stream The Real Housewives of Vancouver and Toronto (Lark Productions), for example.

Previously, execs at the company said content on its Canadian platform would be added on the same day that it premieres in the U.S.  More details about the platform will be announced closer to its launch day.

Aside from SVODs, other key issues to watch for in the global market, said MacLellan, is the need for companies to create scale and global production capacity. While NBCU is dominant in the U.S., MacLellan said it needs to grow overseas in the future to address the fact that margins will shrink going forward.

On that note, MacLellan referenced Comcast’s $31-billion bid for European media co. Sky, which Comcast said is a complementary business that will be its platform for growth across Europe. At the time it announced its acquisition bid, Comcast said the potential deal would allow it to invest more in original and acquired programming.

Earlier in the talk the NBCUniversal exec also expressed NBCUniversal’s commitment to Canadian audiences and creatives, stating that over the last four years the company has spent $1.1 billion in Canada producing films and TV series, and also noted the company’s stake in Vancouver-based prodco Lark Productions.

According to MacLellan, outside the U.S., Canada and the U.K. are two of the most important territories for the company citing Canada’s competitive edge.

“Here, not only licensing our content is incredibly important but you’re the first market that our content enters into because of the simulcast situation. It’s sort of the bellweather on how a project may do outside of the markets in terms of license moves,” said the chairman.

“You’re welcome,” said Williams as the crowd broke out into laughter.

Photo: Kristian Bogner