“It’s great to start as a pirate, but one day you’ll have to join the navy.”
Interview with Ruud Hendriks, co-founder of Startupbootcamp, Dutch media visionary, long-time media entrepreneur, manager, journalist and radio and TV presenter with a career that spans about forty years.
In a period of nine years, Startupbootcamp expanded to become a global network of startup accelerators with more than twenty industry-focused programmes. One of these programmes focuses on startups offering innovative tech solutions for the creation, distribution and consumption of content. With this programme, Startupbootcamp aims to stimulate the media innovation ecosystem, which will eventually empower all players in the media industry. Ruud Hendriks discusses his brainchild Startupbootcamp and gives a broad overview of how he interprets what is happening in the world of media in this digital age.
In 2010, Ruud Hendriks co-founded startup accelerator Startupbootcamp, together with media entrepreneur Patrick de Zeeuw. “Nine years ago, Startupbootcamp was one of the first accelerators in Europe,” says Hendriks. “Patrick de Zeeuw and I were determined to build the best accelerator in the world and today we accelerated almost nine-hundred startups, of which 170 in the Netherlands. A few years ago, I saw the Startupbootcamp logo on a giant video screen in the Melbourne Cricket Ground, which is a stadium that fits 95,000 people. This gave me a huge adrenaline kick. For me, Startupbootcamp is a milestone in my career.”
Startupbootcamp gets a share of eight percent in every startup that joins an accelerator programme in exchange for services. For startups in de media programme, these services include for instance an international network of key players in the media industry. Hendriks: “Holding shares in a startup means we not just give them a little push during our programme, but we remain involved for a longer period of time. Sometimes even after we no longer hold shares in that particular startup. Just because we enjoy it and want to learn from them.”
“Digitalisation has changed the playing field for major news publishers,” says Van Kampen. “New players are emerging. Google News has entered the Dutch market and Apple News is on its way. These news services focus on a flawless customer experience and are popular among young people. Yet, existing local news companies are still strong and powerful. DPG Media has the news stories, the necessary authority and credibility, as well as a steady base of subscribers and recurring news platform visitors.”
“Global public confidence in the media is declining, but the Dutch still have a deep-rooted sense of confidence in their news media. Original high-quality content is important and will be even more important in the future. Professional journalists select, interpret and write the news content everybody should read. Editorial teams guarantee quality and reliability, which is crucial in a world where there is so much fake news.”
At Startupbootcamp a well-oiled skilled team is more important than the solution they want to bring to the market. Hendriks: “Someone can have a brilliant idea, but this doesn’t mean he or she has the ability to transform this into a successful business. In our selection process, we first focus on the team. We need passionate people who live for the company they are building and not just for the money. With the right skills, attitude and drive, they can all be successful and expand their business. I always say: It’s great to start as a pirate, but one day you’ll have to join the navy.”
The success of Startupbootcamp has led to a constant process of professionalization. “We are now ready to play in the Champions League,” says Hendriks. “This means for instance that we have to introduce new rules, and focus on compliance, investor relations and internationalization. But this doesn’t mean our culture will change 360 degrees. We keep offering our people an international inspiring and flexible working environment where they get big responsibilities at a young age.”
“Besides, we are working on running our business more like a digital business. For instance, recording recurrent training sessions and putting these online as on-demand videos would save us time and money. Automating our scouting process is also part of renewing our way of working. We acquired technology-scouting business FuelUp, which has a database that contains 500,000 startups and continuously scrapes the internet to find new ones. Suitable startups receive an email from us to inform them about our programme and about how they can register. This is a fully automated process.”
Making use of digital innovation to transform a business and make it fit for the future, applies to all industries, including the media industry. With their media technology programme, Startupbootcamp aims to stimulate the media innovation ecosystem that will eventually empower all players in the world of media. “The media industry had the image of being innovative,” says Hendriks. “But I see it as a very conservative industry, which is why many media companies are in serious trouble today. They have been asleep for too long and failed to respond to digital disruption. Netflix already started its activities in the 1990s while RTL took a share in Videoland only in 2013 and got full ownership as late as 2015. Broadcast radio and TV are past their peak and will never be what they used to be. The same goes for the newspaper industry. In order to survive in this digital age, innovation is key.”
Hendriks sees video on-demand as a crucial part of a drastic revolution in the world of media. “At first, Netflix targeted a highly educated audience, but it is now being embraced by the masses. The same goes for on-demand audio services, including podcasts, delivered by for instance Spotify and Apple Music. The rise of podcasts is remarkable, since Adam Curry founded PodShow (now Mevio, ed.) as early as 2005, but did not manage to make it a success at that time. Today the possibilities offered by personalization are giving podcasts an enormous boost. We now see that everybody can personalize almost any media product, but also broadcast their own content, for instance on YouTube. Media is becoming an ever broader concept.”
According to Hendriks, consumers will have several on-demand subscriptions in the years to come. “The Dutch market will have room for one international player, right now that would be Netflix, and one or two national players, I’m thinking Videoland and maybe NPO Start. In the global market, Netflix holds the best cards, but they will experience competition from Disney+. Comcast and NBC are investing in on-demand services and CBS and Viacom will start soon. Google and Facebook are also very serious contenders. Bundling up subscriptions is still a bridge too far. First, on-demand players will want to recoup their investments and only if some players collapse the remaining ones will be ready to cooperate. This may take at least ten years.”
“Linear TV as we know it will not survive eventually,” says Hendriks. “The number of cord-cutters is growing, especially in the age group between twenty and thirty years old. For this group mobile has become the first screen. That’s why I see great opportunities for players who dare to produce vertical content only. Elisabeth Murdoch does this with Vertical Networks in Los Angeles and Jeffrey Katzenburg, former chairman of Walt Disney Studios, now has a production company that makes short-form content designed for smartphones.”
“Society has become more and more individualized and chatting about last night’s TV programmes at the coffee machine at work will be a thing of the past. Although big sports events or big news events will keep bringing people together and will be broadcast live, this may not be TV in the traditional sense. A scenario could be that TV content will be streamed on-demand by Netflix instead of transmitted via cable operators. Netflix could even add a linear stream for important live events. If people are willing to pay, they could watch ad-free ‘television’ content here.”
On the distribution side of the media landscape Hendriks mentions some crucial (future) developments. “Cable companies are losing part of their curation role to on-demand players such as Netflix. Besides, while Elon Musk is developing Starlink with its 5000 satellites delivering space-based internet to all 7.5 billion people on earth, a company like Liberty Global is still working on expanding its cable network. I think a revolution is on its way in this market. Right now, cable subscriptions are often bundled with internet and mobile phone subscriptions, which delays the effects of market disruption for a while.”
For a long time, cable operators offered TV channels in bundles to the consumer. Hendriks: “TV channels resisted à la carte pay television, because their content power was not big enough for a paid model. This only changed when sports channels increasingly embraced a pick-and-pay model. I think audio streamer Spotify paved the way to really getting consumers accustomed to paying for quality content. This changing consumer behaviour was a breeding ground for the success of Netflix. It’s all about quality, since not many people are willing to pay for YouTube content.”
Hendriks sees great opportunities for producers who manage to make quality content for on-demand media-services providers such as Netflix and Videoland. “I spoke to people in LA who were complaining about a lack of quality content from Europe. European companies that are able to produce high-quality content for 0n-demand players in a cost-efficient manner will have a bright future ahead of them. Despite the fact that younger people who watch YouTube videos often settle for lower quality content. I just hope they will start appreciating well-made visual content as they get older.”
In today’s fast changing media landscape, traditional news media like broadcast TV and radio, and even printed newspapers are all in decline but still alive. Hendriks: “Look at the success of The New York Times, which has more than four million subscribers, including three million digital-only subscribers. Or look at how the Financial Times and Het Financieele Dagblad (Dutch national financial newspaper, red.) manage to thrive with their high-quality news content. It shows consumers are willing to pay for news, including online news, as long as quality is guaranteed.”
Startupbootcamp has an eye for the impact startups can have on society. In the case of the media tech programme, protecting and stimulating high-quality journalism is one of the basic principles. Not in the least because this ambition is also high on the agenda of V-Ventures, one of Startupbootcamp’s shareholders. Hendriks: “We live in a time of fake news and ratings-driven news editors. After a news item is published online, editorial staff monitor how many people click on that story and if that number is disappointing, they will change the headline to attract more readers. Technically, it is possible to show different headlines to different readers.”
Broadcast journalism will me more and more personalized according to Hendriks. “Just as Facebook uses algorithms to offer you news based on your interests, readers of online newspapers will also be offered news items on an individual level. If you are an investor for instance, I can imagine a newspaper will curate the available content and only serve you news about the companies that are part of your investment portfolio. Besides, an increasing part of stock market news is the result of automated journalism. The same goes for sports reporting.”
Offering articles to readers that match their interest, provokes the risk of filter bubbles while a broad overview of news is also an objective of quality journalism. Hendriks: “Filter bubbles, automated journalism and fake news are all part of journalism in the digital age. It’s an illusion to think we can have a grip on it with rules and regulations. Anyone can put a server in a remote place and stream content all over the world. It’s good that Stichting Brein (Dutch copyright organization, ed.) blocked some webpages because of piracy, but this can easily be by-passed. Just as other unwanted content will always find a way to its audience. It can’t be stopped.”
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