Distribs without output deals suffer

Digital battle for Britain

The launch of SVOD services by Netflix and Lovefilm has created a divide between the haves and the have-nots among the U.K.’s indie distributors.

The haves — eOne, Studiocanal, Momentum, Lionsgate and Dogwoof — are enjoying inflated prices for pay TV rights that were previously next to worthless, because Sky refused to buy them. That’s having a major impact on their bottom line, and on acquisitions. EOne, for example, has doubled its U.K. release slate since signing its Lovefilm deal.

But the have-nots — smaller indies without SVOD output deals — complain that the overall value of their ancillary rights has actually shrunk since Lovefilm and Netflix started competing so aggressively with each other.

“We used to moan about Sky, but they come across as incredibly generous next to Lovefilm or Netflix,” says one topper at a small U.K. distrib. “They aren’t interested in talking to us about long-term deals, though we have a strong DVD slate. They come in and look at our catalog titles, and make offers that can be as low as £1,000 ($1,624) for a 12-month buyout.”

Meanwhile, distribs say that the arrival of Netflix and Lovefilm has gutted the already declining direct-to-video market, which had been their bread and butter.

On the other hand, these smaller indies are getting better access to Sky via the output deals of the Hollywood studios. Now that the bigger indies have signed exclusive pay-deals with Netflix or Lovefilm, the studios are turning to the smaller players to fill the spare slots in their Sky output deals.

Traditionally, the studios have more pay-TV slots than they can fill with their own movies, so they sell the spare capacity off to indies, and split the revenues. However, Sky may take a dim view if the majors start padding out their pay-TV packages with too many obscure indie pics, and might impose tougher terms when the output deals come up for renegotiation.

Filed Under:

Follow @Variety on Twitter for breaking news, reviews and more
Post A Comment 0