LONDON SCREENINGS: The growth of global streamers might have been headline news last year but lockdown has also seen the rise of local platforms, which are offering distributors and producers new opportunities.

If there has been one type of business that has weathered the storm of the pandemic it’s got to be global SVoD services.

Take Netflix, for example. While subscription figures slowed for the latter part of 2020, the streaming giant attracted more than double its projected number of new subscribers for the first three months of last year, with 15.77 million new users rather than a projected seven million.

But alongside lockdowns that have driven people to stream content on global platforms in the absence of other entertainment, another player is slowly winning audience numbers: the local SVoD service.

In the past few years, local streamers have been cropping up worldwide, including Hotstar in India and Indonesia, and BritBox, which debuted in North America in March 2017 and later rolled out in the UK and Australia, with plans for a South African version in the second half of 2021. Joining these are Joyn and TVNow in Germany, Salto in France, Stan in Australia, Filmin in Spain, Crave in Canada and Viaplay in Sweden,

But what does this mean for distributors that have long been attracted by the big money and exposure that deals with global SVoDs such as Netflix and Amazon provide?

Paul Corney, senior VP of global digital sales and coproductions at All3Media International, says the answer isn’t a matter of local versus global SVoDs, because they are all following the same strategy. He argues that, for all on-demand players, the model has “evolved” and moved away from an aggressive strategy in which global streamers snatched up content and took worldwide rights. Instead, he says, SVoDs now search for more tailored and local content in order to tap into specific markets.

Corney cites tech giant Amazon Prime as an example of an SVoD service that has adopted a more nuanced approach to content. “Amazon had a very similar model to Netflix but that has now changed,” Corney says. “It’s now much more of a first-window, first-run platform. It also now buys on a local level as well to make itself locally relevant and competitive in that market.”

It’s A Sin, Russell T Davies’ drama series set during the 1980s AIDS crisis, was bought by Amazon in Canada from All3Media International. The five-parter was commissioned by Channel 4 in the UK and coproduced with US streamer HBO Max. Corney says Amazon picking up the show for its Candian audiences illustrates how it now buys content on a territory-by-territory basis.

“We work with Amazon on various levels, whether it’s in the UK, Australia or the Nordics,” he says. “But they’re not sweeping up a massive set of content and are instead focusing on specific titles for specific territories.”

Tom Burton, sales manager for global digital, Australia, New Zealand, Canada (English) and Middle East at London-based Passion Distribution, takes that one step further and says local streamers create a new market for local adaptations.

“A global SVoD will take one brand and one version of that brand – for example, the US version of RuPaul’s Drag Race – and air that around the world. So to have a local SVoD on board means you can make programmes like Drag Race Canada, Drag Race Down Under and Drag Race Holland and all these other wonderful versions of the show that wouldn’t have been possible with an international,” he explains.

Further to that, Burton says, a local service will invest in targeted advertising. “A local SVoD will do promotion for a show in that territory, including billboards. They build a fan base and integrate it, making the show almost a part of the landscape. That isn’t something a global SVoD would do in every single one of their territories,” he adds.

Kelly Wright, senior VP of distribution and new business at Israel-based distributor Keshet International, says that if the market previously seemed “buttoned up,” the explosion of local SVoDs has resulted in a swell of opportunity for sellers.

On top of that, the selling of niche and specialised content is becoming a more lucrative trade. “It’s exciting because there seems to be a home for almost every type of content now,” she explains. “Whereas before it might have been in Asia, for example, where content has to be educational or blue-chip nature or local. Now we can sell them foreign-language drama.

“The rise of local SVoDs has broadened not only the number of outlets that you can sell to but also the type of content you can sell into each territory.”

Wright also sees financial benefit in selling content to multiple local SVoDs, as opposed to one global deal. “If you do decide to sell piecemeal, you can ultimately end up making more money. It really depends on the content, but from one region alone you can end up making what you might have made from a global sale and then you’ve still got the rest of the world to sell to,” she explains.

Emmanuèle Pétry-Sirvin, co-founder of French animation production and distribution company Dandelooo, on the other hand, says that if a programme becomes a hit in a local territory, it could attract a previously uninterested global SVoD. “Should the programme become very successful, especially in a home country, then a player like Netflix will look at it again. If they had said no before, they may well revisit the show and potentially try to secure a pan-European licence, for example,” she says.

But it is not only the distribution market that has opened up due to the rise of local SVoDs. According to Wright, they have also created new opportunities for coproductions, which global players may have turned their noses up at in the absence of exclusive territory rights.

“Many territories are now coproducing together and let’s say that a German-language show takes off in German-speaking Europe. A global player isn’t necessarily going to want a show that’s in German and set in Berlin when they can’t have the German-speaking Europe rights,” she explains.

“But the rise of local SVoDs allows for more of this coproduction to continue. Previously, the partners would have to finance the show from two or three sales in two or three territories, but they wouldn’t necessarily make a profit on it. Now we’re seeing we can make a profit on these shows as well.”

Wright also says that selling into a global player doesn’t mean a local SVoD deal is off-limits. Keshet International handles the global distribution rights to Croatian crime drama The Paper (Novine), which was first commissioned for local pubcaster HTV in 2016 and then bought by Netflix two years later.

“Global players, like Netflix, are fine with holdbacks and you’ll be able to have a second window on shows that stream with them. It’s a question of whether the local players will then want to pick them up afterwards. But we’re finding with shows like The Paper, local players are still willing to have them after they’ve been available on Netflix because the content is in the local language and the actors are famous in those territories. That means you can still make money off the tail after that bigger global sale,” she says.

But Wright adds that generating large revenues in the first instance depends on competition and timing. “If global players are bidding against one other, the revenue will drive up. But if it’s one global player versus a couple of local players, you won’t get the same kind of numbers. Ultimately, it’s down to the timing, the content itself and then who is interested,” she explains.

Could this competition between increasing numbers of buyers eventually lead to a reduction in acquisitions and a drive towards more original content? Wright believes there will always be a thirst for original commissions but, meanwhile, fledgling local SVoDs are sweeping up acquisitions.

“Once global players have established their libraries they focus on originals. But then you have smaller players like Mola TV in Indonesia or Now TV in Hong Kong that still need to build their libraries. Once a platform has built a library – stage one – they will move on to original programmes. But there are more platforms still coming up behind them that need to complete stage one.”

Whether local SVoDs will move on to more original commissions, however, is a delicate financial balance, according to Wright.

“In India, for example, there are a ton of regional SVoDs because there are so many states and languages. But often they charge less than a dollar a month for subscriptions because that’s the going rate. Although, on the other hand, they have more people who can pay that,” she says. “It’s interesting when you look at how the economics work and who is backing them and how much the subscriptions are. And then somewhere in the middle is your formula for acquisitions versus originals.”

But for Jimmy George, co-founder of India-based distributor GoQuest Media Ventures, for all SVoD platforms, original commissions are the goal and a trend thwarted only by the coronavirus pandemic. “Everyone wants to make their own legacy through their content right now,” he explains. “If we didn’t have 2020 things would be very different. The way things have been progressing, it looks like original commission will surpass acquisitions in the next few years.”

Another development shaking up the world of distribution is Hollywood studios ringfencing their content for their own streamers, such as Disney+ and HBO Max. But what does this mean for local SVoDs? For Keshet’s Wright, it can mean that there is less opportunity to sell.

“Wherever that studio is not rolling out their streamer, like in Australia, for example, they rush to make a pact with the local player, like Stan. It has created a challenge because then that local player is tied into a US$100m deal with a studio in America for the next two years for their films and television shows. As an independent distributor, we have opportunities, but also buyers can say they’re committed to this huge amount of spend and that they’ve got to take so many hours from the studio,” she says.

Germany is an “interesting” case study when analysing studio deals with local SVoDs, Wright suggests. “For a short period of time, after all those first-look deals with the studios failed or expired, Germany was doing coproduction with US studios and making crime procedurals,” she says.

That’s no longer the case, however, because those shows didn’t gain sufficient traction, which has paved the way for local coproductions, she adds. “They realised those programmes didn’t perform well in the local US market and they weren’t continuing to a second season. It made them think that they needed to produce those shows themselves or with other European partners.

“It has opened up a lot of opportunities on the coproduction side and helped people realise that local productions and coproductions can be just as lucrative and intriguing to viewers.”

“New opportunities” was the one phrase bandied about by all the distributors who contributed to this article. While the boom of local SVoD services may have a different effect on each distributor, one thing was clear: there are now more avenues than ever to sell content and local SVoDs provide another in an increasingly diverse and buoyant market.

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