Streamer competition is rife and demand for exclusivity is huge – but what happens once SVODs first window comes to an end? Richard Middleton explores the potential of long-tail rights and their impact on production
One of the emergent trends of the past 12 months – if not longer – has been the ability of global streamers to snag success with veteran shows.
From The Sopranos to Friends, premium IP has always had long-tail value, but the SVODs in particular have been able to derive success from this in new ways. Yet it happens in reverse too.
BBC One in the UK debuted World Productions’ Bodyguard in 2018 as part of a deal that saw Netflix taking global rights elsewhere, excluding Ireland and China. The agreement, struck via ITV Studios, raised eyebrows – then largely fell away from view. Fast-forward to last summer and the streamer’s licence period had ended – meaning ITVS could return to the fray.
From Seven Network in Australia to CJE&M in South Korea, countless broadcasters made their moves, as did France 2, which saw the show attract an average audience of 4.2 million. There might be more than 200 million people around the world who subscribe and watch Netflix, but there are billions of others who do not.
“Bodyguard has definitely been one of the standout successes for us in terms of maximising the longtail value of our IP, post the Netflix window,” says Greg Johnson, EVP EMEA & Americas sales & distribution at ITV Studios. He says its success in France “goes some way to prove that a series that has already enjoyed great popularity on Netflix can also work on other platforms to drive complementary or alternative audiences.”
Flex & shift
It is perhaps worth setting the scene here, because since the pandemic and the launch of numerous US studio streamers, cut through content has been at increasing premiums. HBO Max has been notably active in the international scripted acquisition space, but others such as Apple TV+ have also made moves, such as taking Israeli espionage thriller Tehran from Cineflix Rights.
Chris Bonney, CEO for rights at Cineflix Media, points to the competitive SVOD marketplace and suggests there are two trends.
One is that streamers want to protect rights more than ever to enable them to brand their shows as ‘original’ across their geographies “for longer periods than previously.” Yet global streamers such as Netflix, Amazon and Apple are still willing to pick up locally commissioned series, like Tehran from KAN11 in Israel, “and as the competition becomes increasingly tough, [they will take] series where only a partial footprint is available,” he says.
Add that to a relatively stalled pipeline because of Covid – plus the competitiveness of streamers with regional footprints – and a less rigid rights ecosystem appears to be emerging.
“Over the past 12 months, there has been a high demand for content which has generated a lot of interest across the board,” adds Dan Loewy, EVP of Americas, international distribution at eOne. “As a result, we’re finding more flexible and unique ways to work with various partners simultaneously. Global streamers and other platforms are more open to collaborating on terms of length and allowing more flexibility for territories than ever before.”
Jamie Lynn, Fremantle’s EVP of co-production & distribution for EMEA, seconds that take on the market. While deals of course vary depending on partners, he says that “even the truly global streamers have shown a pragmatic approach to deal-making that can hopefully benefit both parties.”
Eating the SVOD stack
Loewy at eOne is open about his optimism around second windows. His company struck a worldwide deal with Amazon for upcoming psychological thriller Cruel Summer – with Jessica Biel and Michelle Purple attached as executive producers – but admits he’s now “looking forward to bringing out second window linear following Amazon.”
Such deals are not uncommon but Fremantle’s Lynn points to the fact that the rights market is changing as viewing habits evolve.
“At the beginning of the SVOD boom, there was a real belief built into business models that streaming and linear windows could always co-exist after the SVOD’s exclusive premiere window, without affecting each other’s audiences,” he says.
“But as streaming and on-demand quickly reached mainstream and mass adoption, a non-linear component is now a necessary extension of virtually every linear deal. It has become more complex to see them co-exist without challenge.”
At the heart of the issue is stacking rights. If a linear operator can’t get them, networks rely on commitment from the audience, which increases risk. “You can’t show up late, join episode four and expect to easily follow the story,” continues Lynn. “So even with the huge audiences they can reach, in 2021 if a linear broadcaster can’t stack all episodes on their accompanying VOD offering, they run the real risk of frustrating and alienating audiences of all ages. This is a risk they have to weigh up when acquiring even a hot property.”
Bonney agrees, adding that it is still “early days” in the post-Netflix window era, and linear broadcasters have, so far, “been highly reluctant to consider ‘off-Netflix’ shows, often because they find the five episode rolling catch-up too limiting.”
At the same time, SVODs who pay top dollar for first windows are loathed to hand over the stack because, as Lynn puts it, they consider this “their hard fought for USP.”
“Second windows to linear after a streamer still happen all the time, but can’t be relied upon as much as they were, unless the grant of at least one stacking VOD window can be offered. We’ve all learned to watch TV in a new way, so you can’t put the genie back in the bottle,” he adds.
Rising costs & Covid
Yet while demand soars so has production cost, never more so than in a world of Covid-enforced protocols. Tim Gerhartz, SVP of global sales at Red Arrow Studios International, has been selling Amazon drama Bosch on second windows for years. The show, produced by Red Arrow-owned Fabrik Entertainment, is set to end after its seventh and final season, but Gerhartz says the model remains vital.
“Complex rights and financing deals that require windowing amongst traditional and new platforms is key to financing big budget drama these days and will continue to be so.”
On Bosch, he adds: “It’s a series we have been able to window extensively after Amazon’s first-run rights and the initial deals we did were with broadcasters in territories such as Australia and the Nordics. Second window deals have been concluded, covering dozens of territories including key markets like France and Germany, with local platforms sometimes airing day and date with the Amazon launch.
“We find that, in general, many platforms – global, regional and national – are open to a degree of flexibility when it comes to windowing and we expect that to continue as the cost of producing drama remains high and the trend for producing local content continues.”
Bonney also agrees that when it comes to second windows, the US studio streamers and “pandemic-driven delays” will mean stacking preferences could change. But there are other trends too – Netflix’s tendency for three season shows and its reliance on “refreshing its offering with new titles”, for example, means there “are more opportunities” for distributors to sell this content.
“Our experience with shows like Wynonna Earp and Marcella illustrates that there is still a huge appetite for these fantastic series following their initial periods of exclusivity on Netflix,” says the Cineflix exec.
Adding up with AVOD
The growth of ad-supported streaming is also affecting how windows are being used. In late 2019, Gaumont sold its drugs drama Narcos – which debuted on Netflix to huge acclaim – to numerous international networks such as SPI/Filmbox. This was followed a year later by an AVOD deal in the US, which saw ViacomCBS-owned Pluto snagging rights, demonstrating the potential.
“We’re already seeing AVOD quickly growing and evolving, creating more competition in the landscape and allowing us to drive better deals,” says Loewy.
“For the past few years, AVOD had been more focused on library content; however, with the success it’s been having coupled with increased budgets, they are able to license content earlier. AVOD has gone from acquiring mostly library content to striking new release licensing deals and now having discussions about potential co-productions. It’s all very exciting and we anticipate these changes will create more opportunities,” he adds.
For ITVS’s Johnson, the emergence and recent rapid growth of AVOD is another shift in the ecosystem. “It’s an ongoing and changing market dynamic and there is no one ‘right’ way of windowing, you have to look at each show as a unique case. As distributors, our job is to weigh the advantages of getting shows financed, while also considering the long-term value of the IP to ensure successful series make the best returns to producers,” he says.
Gerhartz adds that the growth of AVOD “is also creating additional windowing opportunities for more cost-effective factual content or library material”, with sales of packages of content to AVOD platforms potentially adding another two or three years to a show’s lifespan.
He adds: “We are seeing more opportunities to window factual content, certainly when it comes to high-end factual or topical current affairs content. Framing Britney Spears, one of The Weekly: Special Edition collection of documentaries, produced by The New York Times and Left/Right for FX and Hulu, is a good example of this.
“It’s a show that has captured the current zeitgeist in a really big way, so linear channels want it for their current affairs slots to capitalise on that massive media and social buzz the show has generated. However because of the on-going interest in Britney Spears and the court case, it’s a story that is likely to continue to dominate headlines for a good while yet, so the documentary is also of interest to other platforms as a second window play.”
Katie Benbow, director of sales planning for BBCS global distribution, agrees that factual is offering great potential. She points to “innovative partnerships” with companies such as Discovery+, ZDF in Germany, France TV in France and streamers in China, which allow the UK-based firm to ensure content can “find its home across multiple windows where it can reach new audiences over and over.”
Johnson, meanwhile, points to finished tape sales of Love Island as an example of the myriad opportunities available, despite the fact that managing various local format deals versus global buyout conversations – along with sales of finished tape of shows into those same markets – can create “a creative and financial jigsaw puzzle.”
“But it works,” he says, pointing to Love Island’s US show airing on CBS while the UK and Australian versions “find their own significant audience on Disney-owned Hulu.”
The key to securing valuable long-tail rights lies, of course, at the start of a project. Bonney points to Unabomber: In His Own Words as one show that Cineflix was involved with that was able to be better monetised because of the way it was financed.
“We have had success in retaining network rights to streamer originals when they have been only part-funded by the streamer. We negotiated a co-pro deal with Netflix for the unscripted mini-series Unabomber: In His Own Words. Producers Yap Films had secured additional funding from Discovery Canada and Reelz, which meant we were able to retain certain international rights after an initial holdback by Netflix,” he says.
With growing competition and increasing flexibility from some streamers – plus the surging growth of AVOD – the potential of the second window is only rising in importance. As ITVS’s Johnson suggests, the “foresight and skill to broker deals” that enable the most efficient monetisation of secondary windows is now an increasingly important part in the overall funding of shows at their inception.
The tail isn’t wagging the dog yet, but it’s importance appears only set to grow.