Distributors are under greater pressure than ever, needing to be nimble, innovative and cash-rich – all at the same time. TBI gathered distributors of shows such as Bodyguard and Leaving Neverland to discuss all things content: what’s cutting through, what they’re walking away from and why they’re stepping in where commissioners are falling short
Tim Mutimer (Banijay): It’s about managing the rights you’ve got and looking very carefully at the holdbacks you’re giving people because SVOD and AVOD are increasingly becoming more important. Like any other client, we have contact with them as both a distributor and as part of a group of producers. You find out where the opportunities are. The important thing is to make sure you’ve got the rights available for when the opportunities arise.
Mark Lawrence (ESI): The studios also need that variety. Our content is quite valuable for them and I’m sure they’ll be knocking on everyone’s doors to see what’s available out there. A diet of pure Americana is not going to go well
Greg Phillips (Kew): I take a ridiculously optimistic view. It’s wonderful that they’ll use their own product for those areas and it’s fantastic they will have to acquire from elsewhere, whether that’s from us or others. Most importantly, other outlets are going to want to buy things because content won’t be available to them necessarily, so it’s great. The more customers, the more opportunity we have if we have the right thing.
Julie Meldal-Johnsen (ITVS GE): A lot of that American programming won’t be available to clients who are used to buying it and have slots built for American crime drama, so maybe a nice UK crime drama can take its place.
Richard Halliwell (DRG): One of the conversations we’re having, however, might go a bit too far, which is that the new players are now really focusing on local originals to compete. Where before we would have found ready markets for things, now the streamers are making it themselves rather than picking from distributors. It’s not necessarily a negative thing, but it’s certainly a factor.
JMJ (ITVS GE): It seems obvious that if [you’re WarnerMedia and you] do a global service, you want Game Of Thrones on it, but the HBO output deal is the most valuable distribution deal out there that I’ve ever seen in terms of the money it makes from all the territories. Its accountants are going to be taking a hard look at those deals and deciding whether it’s worth walking away from.
GP (Kew): You have to be realistic. They’re going to do the best they can for their own services and utilise their own materials as best they can. They won’t worry too much about anyone else. However, there will be those items that come along that aren’t necessarily beyond their reach, but beyond their desire – that’s the opportunity for us.
RH (DRG): But all rights deals aren’t necessarily a bad thing. All rights, for the right price, is a great thing. As long as they’re prepared to pay – which they often aren’t – but if you can extract the value, it’s great.
“The HBO output deal is the most valuable distribution deal out there that I’ve ever seen. Its accountants are going to be taking a hard look at those deals and deciding whether it’s worth walking away from”
TM (Banijay): It depends on how much they want what you’ve got. They will be very flexible if they really want it but can’t have it everywhere. But, clearly, they’re moving to a global play, with content that will work very well locally in some markets but then they’ll want it for the rest of the world, so if they’re investing in something that’s got the chance of being a hit everywhere, they want the chance to control it themselves. Netflix is a lot less flexible than it used to be.
Harriet Armston-Clarke (TVF): In some territories, it’s a lot more specific. It might not be something they’re particularly interested in for global but if it works in Thailand, that’s great. The reason you hear they’re both rig id and flexible is because global is everything, but simultaneously, getting those territory and language-specific properties is increasingly important as they grow in emerging markets.
Lilla Hurst (Drive): It’s really early days and they’re all working it out. I had a conversation with Amazon the other day where in the US, they just raised the bar dramatically. We thought it was high already, but now it’s super high. They’re talking about doing only three properties a year that are ideas you would never see on any other platform.
The person I was speaking to was saying, ‘I don’t even know if I’ll be in a job because this is such a massive task. Can I even achieve that?’ And then, meanwhile, we’ve got Amazon UK that’s now really starting to engage with people.
We’ve been told that their remit will be quite different from the US. The nature of these SVODs is that they will adapt if it’s not working. They’re not the huge ships like the BBC and ITV – they can be more nimble.
RH (DRG): For us, that thinking about marketing came from the experience with OTT commissioning club Atrium TV, and considering how to give our OTT partners a piece of content that will allow them to compete with Netflix. It’s thinking about what their poster looks like and how to give them something they can’t get elsewhere, be it talent they can hang a marketing campaign around, or behind-the-scenes material they can run digital campaigns with. From a sales perspective, that’s now top of our pitch: not only is this a great show, but I’m going to help you understand how we think you should market it and drive subscriptions. And that’s a new skill set for us.
TM (Banijay): In non-scripted, with formats such as Survivor, we try and collect best practice social media from around the world. We look at what each of our licensees are doing with social media and we share that so that other licensees can get an idea. With the format All Against 1, we own the app, so if we license that in another territory we can provide the app that people can play along with at home. All those kinds of things drive audiences to the content.
JMJ (ITVS GE): Both of those things are exactly right, but the trouble is that we’re all doing it. The US studios have been doing that for decades, and we’re all doing that now – you have to. But getting your head above the parapet is even harder.
LH (Drive): There is a joy in being in non-scripted and working in traditional docs. Take Leaving Neverland or the Princess Diana doc we did on the anniversary of her death: because they are true stories most of us can relate to, they immediately feed a journalistic desire. It’s much easier to break through because it’s really happening, and journalists want to write about it.
GP (Kew): Non-scripted programming is now about making that event. Since you can’t read any truth in newspapers, people are looking for this kind of signature doc because they want to discover the real story.
JMJ (ITVS GE): The 12-month iPlayer window is the BBC wanting as many people to watch their shows as they can. However, if you’re talking about a drama costing £2m an hour, everyone has to be flexible and figure it out because if you don’t raise the money to fund the show, then you’re arguing about a window for nothing, because it doesn’t exist. The whole concept of windowing is fascinating because it used to be this big thing when I started, with digital, pay and free window, but then that seemed to dissipate. It hasn’t been a hot topic for a while but suddenly it’s coming back again as these holdbacks expire. It doesn’t seem to me like there is a cookie-cutter approach and one right way of doing things.
LH (Drive): We did a piece of research in the past few weeks where we were offered a series for distribution with a fairly hefty deficit with a 12-month window on Netflix, and it effectively wanted us to put up the money against all other rights after that holdback, and we spoke to a broad range of our loyal buyers – not about the project itself but that windowing scenario – and it was interesting to see the variety of responses. It was not a one-size-fits-all response and there were several of them saying, ‘We’re not sure – it depends what it is’. It really is so fluid at the moment.
RH (DRG): It comes down to that – it depends what it is, who wants it, how badly they want it and what value are they prepared to attach to it. It’s about valuation, not necessarily windowing.
JMJ (ITVS GE): We have been amazed by the appetite for post-Netflix windows for Bodyguard. It’s been really interesting. It went out on BBC One and it’s on Netflix for 18 months, however, the second window for free-to-air buyers in Europe post-Netflix has been very healthy. But it’s Bodyguard, so is it the rule or the exception? I’m not going to base my future investment in other shows on that example.
Is distributor-led “commissioning” something of a misnomer? What are the practical realities?
HAC (TVF): Maybe the word ‘commissioning’ is a bit lofty. If we’re going to write a cheque for $500,000 or $1m, we need to know we will get that back in sales. Anyone who says that that isn’t the case might be fibbing a little bit.
GP (Kew): Sometimes, it’s more multiple pre-sales as opposed to commissioning, with your heart slightly in your mouth.
LH (Drive): Paul [Heaney of TCB Media Rights] coined the phrase. And in fairness, TCB has genuinely been writing cheques for the full budget. They may be pre-empting that slightly by having a few phone calls with some friendly buyers, saying ‘I’m about to write a big fat cheque, you better buy this’
GP (Kew): I don’t want to burst your bubble but it’s Kew Media that [owns TCB] and it’s not a big fat cheque
LH (Drive): But we have to remember that they’re playing in a certain budget level. They are low-cost returnable series and maxing out a certain amount per hour is quite reasonable and a lesser risk. And they have someone in-house who is sat across commissioning, too.
The way we’ve done it is we’ve moved from being a business that raises pre-sale and co-production funding for indies into distribution. We can now isolate certain ideas and think, hang on a minute, there’s something in this. We had one show called Super Scary Plane Landings that sold and sold and sold. Sadly, the prodco shut down, but we could see there was mileage in it so we went to Arrow Media and asked them to develop a series of this ilk. We said we’ll raise the money, and told them to put together the treatment, and that we need the budget to max out at a certain amount per hour, and then we’ll co-own that property. We’re doing that a lot more because it’s really worked for us. But we have to be realistic that it only works in a certain area of non-scripted programming which is generally longer-running, returnable and lower cost per hour. It would be very difficult to follow that model for $400,000-plus an hour.
JMJ (ITVS GE): We’re doing it as well, because we have to. There is this gap where you used to get a type of show but for some reason, the UK commissioners aren’t commissioning as much of it anymore. We know our clients around the world really like it, and we know what they’ll pay for it, so you have to try and make it happen because it’s not happening naturally.
RH (DRG): For us, it was a reaction to producer frustration. We have a number of first-look development deals, and you meet with producers who have a slate full of brilliant shows. It’s not our job anymore to wait for them to go and get their UK commission. We have to go and help that commission. We can’t wait for UK commissioners to pick up the shows they should be picking up by right. We have a deal now where we’ve gone from commissioning directly and writing those cheques ourselves to a co-production deal with Norway’s TV3. It’s not a traditional first commissioner we would have worked with, but if we can get it on air in Norway, at least the show will get made, we’ll make it in English, and then we’ll import it back.
LH (Drive): And it brings that editorial discipline. That is the other crucial thing. To this day, every buyer you meet will say ‘So who is it made for?’
RH (DRG): We have learned that the hard way. In the early days, we commissioned some shows that didn’t have that editorial rigour and, frankly, weren’t good enough.
TM (Banijay): We’ve done a couple of models, and recently, we put some money into promos. We’re working with Touchdown Films, getting them to shoot a promo in an area we think is of interest, and then we use that to test interest in the marketplace. When we’re satisfied there’s enough interest in that idea, we’ll commission the series.
HAC (TVF): We brought someone in-house to help develop things, so we are co-developing with our channel partners around the world. And we’re very open for business in all the different ways we can make content happen.
Recently, we saw ZDF Enterprises buying Off the Fence, and CJ ENM buying Eccho Rights. How is distributor consolidation changing the business?
TM (Banijay): There is certainly a trend for consolidation, but in terms of our business, I’m less interested in other distributors unless they have a pipeline coming through. It’s more about producers, prodcos or both combined.
LH (Drive): We’ve seen consolidation with the established distributors who all set up 20-30 years ago but there is a next wave. Drive is one of them and there’s a bunch of us out there. For smaller players like us, it’s great, because not everyone wants to work with a behemoth.
TM (Banijay): But there are certain economies of scale, and it becomes more expensive to be in the distribution game. Once you have an infrastructure that works, you can take more content, but to get that infrastructure you need a certain level, so I think certain distributors are going to struggle. You need a certain scale to be able to compete.
ML (ESI): Economies of scale are what’s driving the bigger ones because money is tight. But the boutique distributors will also do well because a lot of producers like small. They don’t want to be part of a massive beast. It’s the bits in the middle that’s the problem, and those are the bits that have to consolidate.
LH (Drive): If you think about the boutiques, there’s one common theme: none of them are in scripted. We were in scripted as a consultancy business and as soon as we launched distribution, we couldn’t compete.
JMJ (ITVS GE): Unless you’re non-English-language. Eccho Rights was a boutique and it did a great job finding a market that was affordable and making something out of it. But it’s very hard for English-language content.
JMJ (ITVS GE): It’s really important for us to get variety, and that’s very different depending on scripted or unscripted. The third-party scripted titles are few and far between. They are still there, and there are some great ones if you can afford them, and on the non-scripted, there’s new players all the time.
LH (Drive): There’s still big cheques to be written even in the non-scripted space for acquisitions and the expectations can be huge. There are certain properties we’d look at at this point and we have to bow out.
JMJ (ITVS GE): We bow out frequently.
HAC (TVF): It’s reached a real level of inflation. We have to bow out, too. But there is no way there is ROI on those projects, so that is one effect of what’s going on, because there is wild money being paid for a one-off and in its entire life of distribution, it won’t see that money back.
JMJ (ITVS GE): But it’s interesting how things circle back. Something is off the market because someone has paid twice as much what you were willing to pay and then three months later, it’s back
Speaking of wild money, how did Kew get involved in Leaving Neverland?
GP (Kew): We were very fortunate. Channel 4 had commissioned it and Dan Reed and Amos Pictures sold it to HBO and it was free and clear, and they could make the deal they wanted for it. They were more concerned about getting good distribution. With our profile in feature-length docs and having Alex Gibney and Nick Broomfield on board, they felt we were one of the doors to knock on.
LH (Drive): There are wild amounts of money being chucked around, but actually, there are a number of astute producers out there who are interested in the right relationship and right marketing and distribution. And I would say the most successful shows in our catalogue are shows we didn’t pay a cent for. We just have a great relationship with that production company and they like the way we work.
HAC (TVF): Same with us.
JMJ (ITVS GE): I do agree, but there is a worrying trend in the UK market of the broadcasters no longer fully financing production. It seems to have become a thing quite quickly.
HAC (TVF): Do you think we’re creating that? It’s quite worrying.
RH (DRG): I think we’re feeding it. I’m not sure it’s avoidable. Broadcasters know that one of us will step up with 30% or 40% of a budget.
JMJ (ITVS GE): I think broadcasters are still paying the same but it’s just that the costs have gone up in most cases.
LH (Drive): BBC investments have gone down in specialist factual quite considerably.
RH (DRG): Certainly in the entertainment space, I don’t remember a conversation I’ve had recently where the expectation wasn’t that I would pay for the set or the host or make some massive contribution.
GP (Kew): People have to have the courage to say no. If you don’t have that, it’s a slippery slope. Some things are beyond common sense. It’s your decision.
TM (Banijay): But someone always says yes.