The new TV content economy

By Ian McKee 05-05-2020. Published on C21 | FutureMedia

The coronavirus crisis marks a watershed for the TV content rights business, spelling the strong decline of big, exclusive deals.

If the coronavirus pandemic has highlighted one thing it’s that the amount of content being watched by audiences globally is both vast and varied.

Of course, we’re all aware of the incredible success of the world’s foremost streaming giants, with Netflix’s subscriber growth doubling its first-quarter prediction and Disney Plus already pulling in 50 million subscribers since its March launch. But all other, more niche, streamers and broadcasters are also seeing a large uptick in eyeballs, as much of the world continues to stay under lockdown and searches for fresh content in new places.

Audience fragmentation was there – and was growing exponentially – long before Covid-19 began, simply the inevitable result of being able to stream video over the internet.

The fragmentation of audiences has meant that, for many traditional broadcasters, diminishing acquisition budgets have been an inevitable and growing factor too.

The sharp pull-back by brands on advertising spending hasn’t improved matters for many ad-funded platforms’ spending pots, with channels such as the UK’s Channel 4 reducing its annual content budget by £150m (US$186m) as part of measures to mitigate the impact of the pandemic.

However, platforms that are on a subscription model have seen strong growth – so, as usual, change is the only constant.

But what does all this mean for the TV content rights-selling landscape?

Metamorphosis is a powerful word, but from my perspective all this has contributed to a seismic transformation in the way content has been bought and sold worldwide over the past couple of years.

With budgets being asked to work harder, more content being watched than ever before and an ever-growing number of platforms to sell to, content buyers and sellers simply have to be savvier about how they do deals.

Welcome to the new digital content economy and the evolution from ‘few big-ticket exclusive’ deals to ‘many non-exclusive.’

In this brave new world, with the explosion in the number of platforms and, correspondingly, content buyers, the number of deal opportunities has increased many-fold for sellers that can achieve reach for their distribution.

Equally, these new buyers are choosing to optimise their budgets by buying on a non-exclusive basis and are moving away from an ‘all eggs in one basket’ approach where they would previously go all-out for exclusive rights for a slate of expensive tent-pole titles each year.

Today, speed and reach turn out to be critical.

Buyers, who need to keep pace with the increased content consumption of their audience under lockdown and to fill gaps from cancelled/postponed productions, need to source, negotiate and acquire finished content faster than they ever have before. For them, ‘reach’ means looking out-of-the-box for fresh, interesting finished content, potentially from new sources, rather than ‘more of the same from the same sources’ they have traditionally dealt with. We are certainly moving into a world where buyers cherry-pick the best content from anywhere.

For sellers to meet revenue targets, this means having to source and manage many more deals than they are used to, finding the new platforms that are hungry for content and getting distribution reach into all four corners of the world.

These dynamics point to the need to have a new kind of channel strategy. Clearly the most experienced content sales teams will deliver the best return when focused on selling their most valuable content to a hit list of accessible customers/prospects with big budgets.

But surely now is the time for a shift to digital solutions to monetise everything else – the small to medium-sized opportunities globally but also for selling key catalogue content into those parts of the world too far away to reach traditionally.

But if this is the new secret formula, why isn’t everyone doing it?

While channel strategies are well established in other industries – e.g. enterprise software sales (another IP industry) – it is new to the TV business. So it’s about a mindset shift, and inevitably this will take time.

But now, with large volumes of content needed suddenly to fill schedules and with VoD platforms around the world hungry for content, an online content marketplace is a credible solution for making the overall process far more efficient and cost-effective. There’s no better time to try.