Philip Barnsdall-Thompson, SVP of acquisitions, UK, America & EMEA, at Flame Distribution, shares his thoughts on new approaches to financing models in an evolving industry.
Distribution has seen many changes in the last 10 years. The days when producers presented titles fully-funded, where distribution advances were purely profit and full production fees were taken, are a distant memory.
Now we see channel budgets stretched to the limit, with major channels offering a small percentage whilst the producer finds the rest. This has prompted more creative approaches to production financing – piece-meal financing, reaching budgets through multiple international partners largely via pre-sales and working less to a single primary commissioning editor.
Producers now engage with distributors at a much earlier stage of the production process, to understand what is achievable financially, may be required editorially and tapering strategies in consideration of genre, budget, filming locations, etc – all of which influencing where and how financing can be secured.
With the popularity of the piece-meal financing model rising, producers have broader opportunities to bring their developments to screen, but this comes with its challenges. To appeal to a multi-territory audience and broadcasters willing to offer financing at development stage, the production needs to have a broad reach, and certain types of programming with too much of a parochial focus would not be able to work to this model.
For the developments that do work, there are multiple partners to please; the brand requirements of each channel need to be met along with their editorial specifications in terms of duration and other technical requirements, which adds to the budget.
Whilst such a model provides more opportunities for productions, increasingly the remits come with the same creative concerns a local commission would expect. “What’s the angle? How is this relatable? What access do you have?” will chime in your ears before a broadcaster is willing to part with pre-sale financing.
For the distributor this model has provided opportunities to access internationally focused programming without entering bidding wars. Whilst the financial risk of large competitive advances may not be so prominent, the distributor is sitting alongside the producer in terms of time commitment and experiencing the same frustrations met by producers over the development process, with no guarantees of a financed production.
For Flame, this model has become one of our primary functions. The approach would be as if we were a commissioner looking for developments which offer interesting angles, unique access etc, creating an idea that international channels will want to invest in.
The process is highly collaborative, working with the producer to taper the idea to meet the editorial creative requirements of likely investors, and ensuring the project can withstand the different creative nuances that arise during the financing discussions, in addition to meeting the scheduling and technical requirements at the point the deal is struck.
Evolving financial models
There are also commercial considerations – is this a saleable title? When raising production financing, work for hire or a one off global deal – rights and territory limiting contracts which prevent any further international acquisition are to be avoided. The balance between financing the show and not using too many investors at the front end of the process is utmost in order to achieve that sought after back-end. Utilising the distributor at the earliest stages is often paramount to achieving that balance, helping producers ensure their negotiations are not creating too many limitations on rights and territories, whilst providing the best opportunity to maximise sales on completion.
For example, with the Channel 5/Discovery title Yellowstone: Supervolcano, territories taken by each co-commissioner were kept to the minimum, so its commercial potential could be kept to its maximum. Involved at the earliest stages we could manage scheduling opportunities creating a 90-minute, 2 x 60-minute and 60-minute cut-down version – meeting investing channel requirements whilst creating broader acquisition opportunities with buyers who work to different scheduling remits.
As financing models evolve, the challenge created by the need for unique angles and interesting entry points is that titles which attract early financing from a handful of buyers are no longer always the same titles which carry mass international sales appeal, similarly developments are often presented that without question would sell but ironically due to their obvious popularity would not attract early investment.
Increasingly rather than working to piece-meal financing models, which may help producers get into production but not uncommonly leave them and the distributor with little commercial benefit, more producers are seeking straightforward commissions outside of the UK, often favouring work-for-hire models. Ultimately to protect the rights business the onus is on the broadcaster. If channel budgets increase, without multiple territories taken in the process, then the task of raising shortfalls becomes manageable and the rewards of exploitable rights can be reaped by everyone.