The themes highlighted in the TBI Distribution Survey can be summarised in two words: cautious optimism.
This sentiment has been echoed in our experience with distributors. Over the last year, we’ve been beta-testing TRX, the online deal-making tool for TV rights. More than 70 distributors have used TRX to market titles to and/or negotiate deals with over 350 buyers worldwide.
Larger distributors have stressed to us the need to find operational efficiencies, while for small to mid-sized distributors, the main priority has been to increase sales in what is an increasingly fragmented and complex market.
Paul Dempsey (BBC Worldwide) rightly identifies that pure distribution is becoming a “margin-challenged environment” and that, as Tim Hegarty (ACTF) points out, should there be a downturn in the market the high overheads of larger distributors puts them most at risk.
The larger distributors engaged with TRX have recognised this issue, and see the optimisation of their sales resource as a key competitive advantage. By streamlining their operational processes, distributors can free up resource to focus on securing and monetising their highest value titles.
Some of the distributors surveyed expect the decline in advertising revenues at networks to precipitate reduced license fees, with the impact being most acutely felt by small to mid-sized distributors. Distributors of this size are increasingly looking to buyers from new platforms and from emerging markets to help bridge this gap.
Keren Shahar (Keshet International) describes the proliferation of SVOD buyers as a “double-edge sword” and this has certainly been our experience. SVOD buyers represent some of TRX’s most active, but also most demanding, users. They have a huge appetite for content but many are yet to adjust their pricing expectations to market standards.
The challenge for all distributors (as ever) will be to retain rights and defend their windowing strategies. We are seeing distributors turn to sophisticated rights management tools and data analytics to support this endeavour.
The growth in business from Asia and Central and Eastern Europe is a trend that has also played out across the TRX marketplace. These regions represent a prime opportunity to exploit a distributor’s full catalogue, particularly in factual and kids genres. Until recently, this has been challenging for smaller distributors, which could not devote sufficient resources to these regions.
Distributors using TRX can now readily access over 500 buyers across the world without ever needing to leave their office.
2018 is set to be a pivotal year for TV distribution. Though there are external pressures bearing down on the market, we are bullish for three reasons.
Firstly, the quality of TV programming has never been better, from Game of Thrones to The Great British Bake Off, we are living in a golden era of TV. Secondly, there are more TV buyers than ever before, which not only increases competition but should allow to distributors to diversify their client base.
Finally, TV distributors are embracing new marketplace technology, which will enable TV rights executives to do more deals, more easily.