“Hands & Pans”: Tasty’s Cooking Format Burns the Food Network in the Online Video Economy

Tasty is enjoying a meteoric rise driven by its low budget, fixed-camera cooking format and Facebook distribution.

It is a Case Study in how viewing on Facebook is hurting leading cable channels like the Food Network, and in turn, damaging Discovery‘s valuation.

Hands & Pans:

Tasty is a BuzzFeed division that produces and shares content related to comfort food.

Engagement: Tasty vs Food Network

  • NewsWhip’s chart of FB video engagement for 4Q’16 captures how low-budget Tasty crushed high-cost Food Network in 4Q’16.

The Burger With 200 million Views

Facebook Gets the Final Word…

  • The Tasty Case Study is another instance of Facebook‘s dominance of the online video ecosystem.
  • Facebook distributes the content of Food, Tasty and countless other food video specialists, and all without incurring any production costs.
  • Facebook earns revenues from ad sales associated with these programs.
  • And it retains detailed data about each FB Friend who views each program.

… and the Future

Food Network: Origin

  • My friends Joe Langhan and Reese Schonfeld originated the Food Network in 1993 with industry veterans Tryghve Myhren and Jack Clifford .
  • The launch was often greeted by derision:
    • “Who is going to watch programs about how to crack eggs in prime time?”
  • The brains behind the launch correctly forecast that:
    • Food was a giant ad spend category that was not supported by a dedicated channel, and that media buyers would flock to it.
    • A sliver of the TV audience loves programs about the preparation and context of food, and will watch them day in and day out.
    • (Read my coverage of the launch here. I worked on aspects of the Food Network’s early strategy.)

First Came Evolution

  • The Food Network and its junior Cooking channel presented a buffet of formats:
    • Studio-based How To’s hosted by big personalities like Emeril dominated at first.
    • Elimination shows like The Next Food Network Star followed.
    • The mix has included documentary-style specials and series.
    • Analyst SNL Kagan estimated Food’s 2017 programming spend at close to $400 million.

Then Came Devaluation?

  • Scripps Networks, the parent of HGTV acquired Food in 1997.
  • Discovery Communications acquired Scripps Networks recently, valuing the company at $14.3 billion.
  • The market is taking a dim view of the acquisition: Discovery’s own valuation fell quite steeply after the takeover was announced, and then flat-lined. (See below).
  • Wall Street analysts rely on complex valuation models. One factor must be how pesky little online video formats like Tasty’s “Hands & Pans” are capturing the young viewers that advertisers love.

Source: Y Charts


 

Original analysis and coverage from DocumentaryBusiness.com
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