Spending squeeze drives ‘value for money’ commissions & copros as ‘Citadel’ franchise raises questions

Streamer spending cuts are fuelling a deeper shift into “value for money” programming and coproductions that can target global audiences, while Amazon is looking to expand its franchise strategy following the launch of big budget drama Citadel.

Production companies have faced a barrage of headwinds over the past six months as global streamers overhauled commissioning budgets and execs here at Banff World Media Festival admitted the effects were being keenly felt across the industry.

“We probably hit a level of volume that was too high,” said Patrick Vien, MD of international at A+E Networks, who added that the “incredible investment” in content over recent years meant viewer expectations had risen around quality and would not drop back down.

“Consumers are demanding that level of production, of directing, of acting, and it is incredible – that will stay but we will see some quantity come down,” said Vien.

Patrick Vien

Antony Fraser, MD at ACF Investment Bank, said there are “funding headwinds… hitting a lot of the bigger media groups and we are seeing people looking for value for money in content,” while the US writers strike is also hitting producers. One client, he said, had been forced to halve its annual revenue projection as a result of the ongoing strike.

The turbulent US and international industry means commissioners are increasingly loking to “de-risk with coproductions and lower cost production,” he said, pointing to the Canadian market as one that could potentially benefit because of its its lower costs and tax credit schemes.

Fraser dismissed any notion that consolidation could be coming to an end, adding that private equity-backed firms in Europe in particular “are looking to scale”. The ACF boss also said there would be deconsolidation, as “a lot of the large traditional media companies look to realign costs and capital structures. We will see a lot more of that going on over the next few years.”

Juan Ponce, SVP & GM for Telemundo Streaming Studios, said risk aversion from commissioners remained his biggest challenge, pointing to struggles across Lat Am, in particular in Argentina, while Vien said the “challening” economy was driving coproduction, citing an unnamed project he has in the works with five partners that highlighted how commissioners are looking to stretch budgets for shows with global appeal.

Viewers storming the Citadel?

For Amazon Prime Video, the focus of its recent global commissioning strategy has centered on Citadel, which is led by a Richard Madden and Priyanka Chopra Jonas US series supported by Italian, Indian and Mexican spin-offs.

While the tentpole drama’s budget reportedly stood at north of $180m, it has failed to ignite in the US but Amazon Studios’ head of drama series Odetta Watkins said its performance elsewhere in the world meant she considered it a “victory”.

Odetta Watkins

She added: “Every show is not going to hit in every place on the same level but as the franchise grows, I feel like the numbers will grow everywhere, including domestically.

“You’ll start to see the audience respond differently as it goes on. In the US, we are very jaded and watch everything with a discerning eye…. I just think it needs time to grow.”

Watkins said that she is now looking for young adult, drama, mysteries and family shows that are “inclusive and authentic”, pointing to Citadel as an example, despite it being a franchise born out of the US. “We want to see how we can make [shows] feel a lot more comfortable for a global audience.”

Fraser added that the current climate has had a “polarising” effect on some content strategies, with docs receiving greater investment, while interest in entertainment is also growing as commissioners increasingly ask “what the content delivers for the network or platform.”

Vien added that while the industry “feels heavy right now” the level of spending globally has not dropped dramatically. Rather, there is “a correction environment but people around the world are saying yes – but there is just more rigour to saying yes.”