News


TBI Distributors Survey 2017 – Part 2

TBI-Dist-Survey17-mailer-header-700x220v3Game of Thrones

The second part of our five-day feature revealing all about the international distribution industry in the words of those that work within it is here. Our survey details how SVOD services are changing the game, why data is becoming a key tool in the sales person’s arsenal, and why rights holdbacks are providing the backdrop to a key battleground in negotiations between buyers and sellers.

 

THE UNENDING RISE OF SVOD

There is perhaps no single line of business making more of a change to distributors’ operations than subscription VOD services.

This is the first time TBI had tallied responses from them since both Netflix and Amazon began offering global services, which has added a game-changing new option to sales houses’ business models – the all-territory deal.

Some 42% see the rise of SVOD players are having had the biggest impact on international distribution, with many having different reasons for that.

TBI_Survey_SVOD_influence

For Marie Conge at French kids TV distributor Go-N International (below right), sales houses are presented with a tricky choice. “With the rise of SVOD players, a distributor has now to decide whether and when it makes sense to sign a global deal with Netflix versus parcelling content out to local partners,” she says.

“This has increased competition for premium drama content, with an increase in prices paid in certain territories and platforms,” says Jane Millichip, managing director of Sky Vision.

marie congeFremantleMedia International COO Bob McCourt says windowing has become more complex “with linear channels wanting to hold on to SVOD rights” and “SVOD platforms are looking for longer holdbacks”.

Keshet International’s COO and president of distribution, Keren Shahar, says SVOD is a double-edged sword: “On the one hand it’s very positive, as the SVOD platforms create new sales opportunities for non-English series. On the other, this also creates an additional consideration on terms of a sales strategy and windowing.”

Despite the various issues thrown up the changing dynamics, an overwhelming number of respondents say SVOD services have been a positive influence on their business.

Paul DempseyFor Flame Distribution’s Fiona Gilroy, SVOD buyers have “created new opportunities”, while Jonathan Tuovinen of Finnish formats company Rabbit Films says it simply means plenty of new clients and new business.

Paul Dempsey, president of global markets at BBC Worldwide (left), says: “The rise of SVOD players has not only created a new home for content beyond traditional television, undoubtedly a good thing for us as our catalogue is much sought after, but their move into commissioning also creates new opportunities for content creators.”

Avalon Television’s director of distribution, Isobel Hughes, points to another area of business from the subscription service players. “SVOD services have opened up new outlets for finished programme sales, which benefits distribution generally, but the downside is they have more or less killed the DVD market,” she says.

“Furthermore, SVOD services – namely Netflix and Amazon – have become more global, adding another windowing opportunity to individual territory sales.”

 

THE DATA DEBATE

Tension remains over SVOD players’ steadfast refusal to release viewing, even to their production and distribution partners – they deal in subscriber numbers, which isn’t much use to vendors.

With more and more services cropping up, many distributors and acquisitions executives are finding it tough to make informed decisions. However, this is creating something of a data-driven cottage industry around the world, as buyers and sellers look to double-down on effective content and get rid of that which doesn’t.

TBI_Survey_Data

Tech and new media companies such as Parrot Analytics and Procera Networks are finding ways of tracking internet traffic and programme demand, and their influence is becoming more widely felt as a result.

Overall, half of our respondents say they are using a more data-driven approach to their sales strategy, with only 2.9% suggesting they use technology less than in the past to aid deal making.

 

HOLDBACKS HEADACHES

Netflix and Amazon are becoming increasingly bold in terms of their demands for original programming. With both now operating around 200 territories, they want significant holdbacks in order to greenlit shows.

Linear channels, meanwhile, want more and more episodes available stacked for their customers, and this is particularly true of the larger pay TV operators.

TBI_Survey_Rights+Stacking

Nearly three-quarters of our respondents say buyers want more stacking rights, with just 2.8% claiming they see less demand. Similarly, almost all say they’ve seen a marked increase in demand for on-demand rights in general.

“We must limit the rights granted, regardless of the demands we receive,” says Maria Hernandez, director of international sales at Colombia’s RCN. “SVOD rights clients want exclusivity, but do not want to pay the price for these holdbacks, and this presents a hurdle which on many occasions has been a deal breaker for many companies.”

Stuart BaxterKeshet’s Shahar sees similar developments. “Buyers are asking for more rights, both in SVOD and stacking, but are not yet necessarily willing to pay for them – they want more for the same money,” she says. “With stacking rights growing, this has a direct effect on a potential second window SVOD deal.”

Karen Young of Orange Smarty has had a different experience. “We have not seen an impact as they are paying more monies for these additional rights,” she says. “The key is retaining control of your rights and focusing on holdbacks.”

“Linear broadcasters are also developing their own SVOD platforms and wanting to retain more on-demand, SVOD and other consumer proposition rights for shows they own and buy,” notes Entertainment One Television International president Stuart Baxter (above right).

“We ensure we land the content we want by getting involved at an earlier stage with unattached producers, and invest as creative and financial partners, as well as through first-look deals and other strategic relationships.”

Emmanuelle Namiech Picture  NEW low resFor Belgium-based Studio100 Media, the battle is just beginning. “We have to find ways to keep these requests within a reasonable extent, especially in cases where stacking rights are not subject to an incremental license fee,” a rep says.

“On-demand rights are highly significant on both sides of the equation,” offers Passion chief Namiech (left). “The viability of windowing relies on the limitation of stacking, side loading, reverse EPG rights and more to give any single piece of content the longest lifespan.”

However, the outlook is good, she adds: “There is a positive consequence of broadcasters’ appetite for broader rights. By acquiring a variety of rights, the platform’s investment is more significant and therefore so is its commitment to increase the profile of the show, with a view to build a brand or franchise.”