Int'l Producers Seize Digital Opportunities

Sites like Hulu and Netflix have stoked up competition for premium content

CANNES — After the April 8-11 MipTV event wrapped and pavilions were packed away, it was clear that the contours of the international television program market have shifted.

In fact many people have stopped talking about “television programs” and merely refer to “content.”

The traditional broadcasters, already fighting for air because of the fragmentation of the TV market, now have to fend off the streaming platforms and other digital players when pursuing premium content.

With platforms like Netflix and Hulu ramping up content acquisition the market has tilted to the benefit of the distributors and producers.

New digital entrants — all hungry for content — were much in evidence at MipTV, a development that the market’s organizer Reed Midem is keen to encourage.

“The broadcasters and distributors are core, but it’s also important for Mip to build the bridges allowing new players to access the global TV ecosystem,” said Laurine Garaude, head of Reed Midem’s TV division.

She described this edition as forward-looking and inspiring. “When we look at the number of deals that have been made in terms of VOD deals, partnerships and negotiations, and the presence of digital buyers and platforms like Amazon and Yahoo, it reflects the digital sector’s growth.”

Jens Richter, chief of Red Arrow Intl., which co-produces genre series “Lilyhammer” with Netflix, sees the development as good news for the international sector.

“The revenues we make outside of the traditional broadcasters went up quite drastically in the last two years,” Richter said. “Two years ago the vast majority of the revenue was from traditional broadcasters, and if you did something online it was more or less a marketing tool. Last year we made more than 20% of our revenue in the digital area. 2012 was our digital year.”

Beta Film has also had success in placing its drama series with digital players, selling Tom Fontana’s “Borgia” to Netflix, and Spanish costume drama “Grand Hotel” and Italo crime skein “Romanzo Criminale” to Hulu.

“This has been a good development because for a certain type of content there are more outlets,” said Eric Welbers, managing director at Germany’s Beta Film, which is co-producing historical series “Alexander” with showrunner Michael Hirst (“The Tudors”) attached, and is also distributing Agnieszka Holland’s “Burning Bush” for HBO.

Linear outlets are chasing these signature shows because they allow them to stand out in the schedules. Beta has had great success on German free TV channels with limited series like WWII drama “Generation War” and lavish costumer “Hotel Adlon” (pictured).

“The event is back in television,” Welbers said. “That’s how they can define themselves through these events where we bring people together.”

In such a hyper-competitive market everyone wants the high-profile shows that will generate a buzz, and that has given a new lease of life to international series, but they have to stand out.

“We noticed many high-end European costume drama series being launched at the market, but high-end is not enough. We’re looking for shows that are different, edgy,” said Aline Marrache-Tesseraud, head of foreign drama acquisitions at Gaul’s Canal Plus, which picked up “Vikings” and “Banshee” at MipTV.

This makes companies start the conversations early, and lock in talent that will help them move forward with a killer proposition.

“The competition between (Amazon’s) Lovefilm, Netflix and Hulu is very high. Hulu for instance wants to keep track of every potentially interesting project as early as possible in order to be first,” said Alexandre Piel, head of drama at Zodiak Rights, which sells crimer “Braquo,” supernatural thriller “Rebound,” and the comedy-laced supernatural drama “Being Human.”

The honey to attract buyers can either be the acting talent, such as with Red Arrow’s detective series “Jo,” which stars Jean Reno, and “Lilyhammer,” which stars Steven Van Zandt (“The Sopranos”), or the writing talent, such as Tandem Communications’ crime series “Crossing Lines,” which has Ed Bernero (“Criminal Minds”) as showrunner, and has been picked up by NBC. In the case of some, like “Jo,” it’s both – the series is showrun by Rene Balcer, who worked on “Law & Order” and created “Criminal Intent.”

It was significant that six of Hollywood’s top showrunners were in Cannes attached to shows that had been financed in large part with international coin, such as corrupt cop drama “Low Winter Sun,” which is being showrun by Chris Mundy (“Criminal Minds”) and produced by Endemol for AMC.

Many of these projects are co-productions, which is nothing new in TV drama, but what has changed is that the partners have become far better at working together.

“What you want to do is create an understanding: What’s the purpose? You want to create something that is bigger than you can do yourself,” Richter said. “Once you agree on this one property, and what it should look like, the partners have to share this one common creative vision, and then go for it.”

One of the realizations among co-producers is that they have to let the creative talent get on with their work unhindered, Richter said. In presentations and panel discussions across Cannes, the U.S. showrunners explained that what these international backers gave them was freedom.

Eli Roth, co-creator, director and exec producer of horror series “Hemlock Grove,” which found a home in the U.S. at Netflix, praised the show’s French-owned studio, Gaumont Intl. Television, for its light-touch approach.

“Gaumont is very director friendly and that’s what I really liked about them,” Roth said. “They are not a traditional TV studio, so you can get the financing that you would at Warner Bros. or another major studio, but they really treat you as an auteur.”

The international producer-distributors that have bankrolled such projects have been bulking up in recent years, buying production companies around the world to power their distribution arms. Tandem is now majority-owned by France’s Studiocanal, for example, while Elisabeth Murdoch’s U.K.-based Shine Group owns Rubicon, the producer of “Lilyhammer.” And sometimes they interlink, as with “Lilyhammer,” which Germany’s Red Arrow co-produces and distributes.

Such activity has put international companies at the center of the creative process, helping to package projects, and allowing them to compete better with the U.S. majors, which are also sometimes their best customers.

The leading international producers have broadened the range of content they produce and the U.S. networks have become more likely to buy from them.

“Everyone is buying everything. And that is good for production companies like ours, which produces high-quality programming in all genres,” said Shine America CEO Rich Ross.

A trend among unscripted shows that has been building in recent years has been the use of second screen apps to drive engagement, and sometimes create new revenue streams. Israeli cross-media company Screenz is working with a number of producers and distributors on apps to accompany their shows, and at MipTV ITV Studios added its name to the list.

As for social media, Keith Hindle, CEO of the Digital & Branded Entertainment division at FremantleMedia, whose shows include “Got Talent,” “Idol” and “The X Factor,” said that it was often the advertisers that were driving the adoption of social media strategies.

“The very interesting thing for us in the major markets, particularly the U.S., is the insatiable desire for social media from the advertisers,” he said. “The first discussion the advertiser has before they come on board is: what’s the social media strategy around the show? … Until we give them comfort that we are going to reach into social media well enough, they don’t come on board.”

FremantleMedia is developing three “covert” projects that have social media at their core, said Rob Clark, FremantleMedia’s director of global entertainment development. “It is not social media as in the commentary of social media, but it is more in using that whole space to shape the format,” he said.

FremantleMedia CEO Cecile Frot-Coutaz said that the economic climate for broadcasters in North America and Europe, with the exception of Germany, was tough, although Latin America, Asia and Middle East were growing.

Having said that, Frot-Coutaz added that multi-channel had started to commission a lot more programming, although the content cablers tended to go for was targeted rather than the “big, broad shows for family audiences” that FremantleMedia is best known for.

“In the short term, will it be a little rocky? Yes. In the long term, are we optimistic? Absolutely,” Frot-Coutaz said.

Other distributors cited Russia, Turkey, Brazil and China as markets that were growing particularly quickly.

There are also new countries emerging as sources for smart and creatively distinct content. Beta, for example, has a thriller series from Belgium, “Salamander,” with a smart concept, and Red Arrow has Norwegian fish-out-of-water comedy “Hellfjord,” penned by Tommy Wirkola (“Hansel & Gretel — Witch Hunters”), which is being remade by Showtime.

Producers from these smaller countries have to work within tight budgets, which can be a blessing in disguise.

“They don’t have a lot of money so the production concept has to be smart and creative,” Beta’s Welbers said, who also cited as an example Israeli series “Prisoners of War,” which was remade as “Homeland” in the U.S., and is being remade in several other countries.

“Formats from smaller countries are very interesting because they have to do them for a lower cost,” Welbers said. “That is why the Israeli formats are really great. They are always very smart and don’t require huge budgets.”

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