Dramatic changes

By Ed Waller 15-11-2017

The international distribution business is changing fast, and that change is being felt nowhere more than in the drama industry, where new platforms, finance options, business models and consumer behaviour are combining into something of a perfect storm.

Plenty of ink has already been spilled about the impact new platforms are having on the industry, in particular binge-viewing and episode-stacking and how that’s changing everything from writing to distribution.

But one less-reported consequence is how these global platforms are changing the traditional rights situation for new TV dramas. Production deals for high-profile shows are now being done that sew up global rights from the get-go, leaving scant rights to be traded in the after-market, which is where distributors are usually called upon.

Then throw in the fact that traditional broadcasters are less inclined to buy off-OTT content just as a linear play, despite some notable successes with such a strategy, like Ripper Street on Amazon and BBC2. Just like SVoD supply chain for licensed programmes, the walls of vertical integration are also being erected in the after-market for original SVoD content.

This issue will become more pronounced as the likes of Netflix and Amazon move deeper into original programming as their supply of licensed content increasingly gets redirected to its owners’ VoD platforms, as exemplified by Disney pulling its shows off Netflix recently. Get used to the word ‘disaggregation’ dropping into conversations at industry events.

The Night Manager’s success raised questions about the role of distributors

C21 is also hearing of a post-Night Manager sea change in the attitudes of producers of high-profile drama content when it comes to the traditional distribution model. Who needs distributors when you have packaged the best actors, writers and showrunners into a must-have project, they’re asking, vocally begrudging the 30% commission fees they’re expected to pay distributors for what they see as “just taking the calls” from buyers unable to resist the power of their package.

Just as broadcasters have had to do, programme distributors must now redefine their roles in this new globalised landscape where the emphasis seems to be more on the initial coproduction deal than flying around the world with loads of cardboard shifting licences on a territory-by-territory basis. Factor in technological changes that allow buyers and sellers to do their deals directly via transactional websites and some in the distribution game must be feeling more than a little disrupted.

Another potentially seismic movement is the arrival of loads of new money in the market, such as drama funds backed by VCs or high-net-worth individuals – hello, Len Blavatnik – looking to change the game further.

Business models among the new funds vary but the underlying theme is to get high-end projects off the ground without having to give away rights or creative control, which is what shallow-pocketed producers have hitherto had to do. Under this model, the creator’s vision is unsullied by notes from stakeholders with different agendas and the product is then owned outright and licensed out to suitable platforms or broadcasters.

US streamer Amazon stepped in to revive Ripper Street after it was cancelled by BBC1 and then returned to the BBC

Bringing the studio movie model to TV sounds great but it overlooks two things. First, while broadcasters might get in the way of direct relationships with viewers, they do tend to know their audiences better than most producers. Cutting them out of the creative process might not be such a good idea, particularly if you need the show to work in certain key markets to stimulate demand in others.

Second, broadcasters and platforms treat licensed product very differently to that which they own or have a stake in. With skin in the game, a US network will promote the show more, for example, give it a better slot, tolerate its ups and downs more readily, and generally love it more than some rented schedule filler that nobody will lose their job over if it tanks. These new funds need to avoid throwing the incentivised broadcast partner out with the bathwater.

The business is indeed changing fast and it’s incumbent on the old guard to at least have a response to the numerous disruptive elements impacting it. After all, there’s good disruption and bad.