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PERSPECTIVE

Defending distribution

By Jane Millichip 11-10-2017

Producer A: “Hi Jane, just spoken to Buyer X. They love the series and will definitely pre-buy it.”

Me: “Fantastic, I’ll get right on it.”

Me to Buyer X: “I hear you love the series. Can we discuss terms?”

Buyer X: “Yes, well… urmm… It is a great idea… just not for us.”

Me: “Oh. [adopts hangdog expression and sad face] So why did you tell Producer A that you want the show?”

Buyer X: “I really like them and I didn’t want to hurt their feelings.”

Me: “What about my feelings?”

Buyer X: “You don’t have any. You’re a distributor.”

Admittedly, there’s a soupçon of artistic licence here, but if you happen to be a producer who has handed a slam-dunk sale to a distributor recently, the above exchange is not entirely a work of fiction.

For this article, I was asked to address the challenges of big coproduction funding, the increasing role of producers in this process and, in particular, the apparently growing resentment among producers who are loathe to pay distributors’ commission fees for ‘simply taking the calls.’

In short, is the distributor becoming redundant?

Sky Vision is launching Britannia at Mipcom

Let’s set the scene. TV drama is having a heyday. Viewers have never had it so good. From The Crown to The Handmaid’s Tale, and Game of Thrones to Sherlock, we are producing some of the best TV drama ever. What is more, we have learned from our woeful Eurocop Europudding mistakes.

Producers and distributors are no longer making desperate editorial compromises in order to secure a broadcast partner (“Yes, of course we can make the cop French and robber German, if we set the series in the Scottish Highlands”). In the UK, we are finally producing in volume and with a pace that is attuned to the international market. Equally, broadcasters are more accepting of other worlds (even foreign worlds), if the story demands it.

In our short history at Sky Vision, we have unleashed an incredible array of worlds on our international buyers: Nordic Noir (Fortitude), Roman Britain (Britannia), Cote D’Azur super-rich (Riviera), visceral Central European crime syndicates (The Last Panthers) and corporate corruption in the Canadian Rockies (Tin Star). All of these are Sky Atlantic dramas with international coproduction partners; dramas with very specific settings or precincts that serve global broadcasters by drawing on universal themes.

This is all good. So back to the question.

In a world in which drama producers can package great scripts, the best showrunners and top talent directly with a US agent, does the distributor become redundant? Or at the very least, should they forego commission?

In short, a big fat no. I haven’t encountered too many producers refusing to acknowledge distributors’ commission. Nor do I see distributors coining it at the expense of the budget just for answering the phone. The world we inhabit sits between these two points – an ever-more complex and nuanced funding landscape in which producers often lead a US coproduction pitch, working hand-in-glove with distributors.

Sky ventured into Nordic Noir with Fortitude

Meanwhile, distributors are called upon to underwrite the full production budget until a coproducer is secured. It is a relationship of co-dependence that requires both a coherent editorial strategy and skilful management of risk.

With great ideas and big ambition comes the need for scale, and scale can be costly. And while our ambition has increased, broadcast licence fees have not. Gone are the days when a distributor’s advance could be called ‘top-up funding,’ when an advance was exactly that – an advance against distribution rights, giving rights holders an immediate upside: the unmitigated joy of back-end revenues.

Today, a distributor’s advance is required for core production funding, underwriting up to 60% of a budget. For this reason alone, the distributor will not become redundant any time soon.

The level of risk currently on the books of major distributors around the world is no small matter. Last year, I voiced my concern that the business of drama coproduction funding could be approaching sub-prime – the point beyond which the market cannot sustain the debt and we are unable to recoup those eye-watering deficits.

Thankfully, my miserabilist prophesy has yet to materialise. But I still believe the spectre of sub-prime will continue to haunt us if we do not act strategically, and in collaboration.

For me, this requires a flexible approach to financing. The emergence of global OTT commissioning agreements has not killed traditional international distribution, as some would have you believe.

Global work-for-hire deals from the likes of Netflix are an addition to, not a replacement for, traditionally deficit-funded content. In fact, I am keen to adopt other new forms of funding, especially from partners who do not need to recoup from international sales and derive their commercial benefit from elsewhere in the value chain.

But this is about much more than money. A good distributor will eke out every sale from every window, have great working relationships with buyers you’ve never heard of, in countries you barely knew existed and handle an infinite number of international deliverables and tech specs. They will sweat your asset tirelessly and deal with the kind of conversation I opened with, the “up-at-dawn, pride-swallowing siege” of rejection (thank you Jerry Maguire), when one’s pitching technique descends into begging and the prospect of six noughts after US$1 spirals into one fat nothing.

We do it because, like you, we love TV and we love great storytelling. Admittedly, we would like to make some money in the process. But this is not the time to cut each other out of a deal. We need each other more than ever.

today's correspondent

Jane Millichip Managing Director Sky Vision

Since taking over at Sky Vision in 2013, Jane has steered the business to tenfold growth, acquiring stakes in seven production businesses in the UK and the US and overseeing the expansion of the distribution business into high-end dramas and entertainment.

Prior to Sky Vision, Jane was MD at Zodiak Rights and COO of RDF Rights. Jane has performed senior roles across all sectors of the television business; including senior commissioning editor at Living TV and MD of New Zealand’s largest production business, South Pacific Pictures, where she also executive produced the entertainment and factual slate.