How Are Digital Rights Platforms Disrupting the Indie Biz?

The Marksman
Open Road Films

COVID-19 lockdowns have provided the perfect backdrop for companies seeking to reinvent the world of content distribution. With international travel restricted and physical markets on hold for over a year, digital platforms that help TV and film sellers to connect with buyers around the world have come into focus as never before.

Prior to the pandemic, platforms such as RightsTrade, Vuulr, Allrites, ProgramBuyer and Mena. TV sought to disrupt long-established ways of doing business in the distribution market — promising to dramatically cut the cost, time and complexity of buying and selling content.

Adoption was gradual, to say the least — no platform had managed to significantly disrupt traditional ways of working. Distribution, after all, has long been a highly relationship-driven business centered around regular get togethers at international markets such as Mipcom, L.A. Screenings and NATPE.

Reflecting the challenges facing digital distribution platforms, a number of early entrants had fallen by the wayside amid difficulty in persuading major sellers to sign up and a lower than expected number of deals.

Many within distribution remain skeptical. “They all keep telling us they’re essential … I’m not so sure,” says one veteran distributor.

However, online distribution platforms report that business has picked up significantly as a result of the pandemic.

“The past year has been really busy for us,” says RightsTrade CEO Bill Lischak. “Companies wanting to license content have looked to digital applications to continue their business.”

Vuulr co-founder Ian McKee says his company has grown faster than anticipated since launching in January 2020. Buyers and sellers have been “forced by circumstances” to try digital distribution platforms much sooner than they might have done, he says. “Bigger organizations, which might have been slower to come on board, became ready to talk to us earlier than we expected.”

The market also has a new entrant. Exeest, billed as a 24/7 global entertainment marketplace for film and television content, launched in April with program libraries from distributors such as Caracol, Keshet, Propagate and Telemundo.

Many of the companies operating in this market have different business models. As the market has grown in the past year, all have sought to differentiate themselves through new offerings for clients.

Launched back in 2015, Los Angeles based RightsTrade, for example, charges sellers a fee to list their content on its platform. The subscription fee depends on the amount of content listed. Lischak describes RightsTrade as a platform where buyers can home in on available content for their territory without having to contact multiple distribution companies. Distributors listing their content on RightsTrade include Lionsgate, Legendary, Gaumont, Protagonist, Arclight and Miramax.

It has recently upgraded its screening platform for buyers, and launched a video conferencing tool that allows buyers and sellers to virtually meet and to easily share video content in one place.

RightsTrade has also partnered with key markets as they have launched virtual editions over the past year. RightsTrade was selected to provide the technological backbone for last year’s FilMart in Hong Kong and NATPE Budapest Intl. RightsTrade also partnered with the AFM for its 2020 online-only market.

Lischak thinks digital marketplaces will only play an increased role in distribution. For a start, he reckons that the “new wave of executives” is more prepared to embrace digital platforms.

There is a place for markets-, meetings- and relationship-based business deals, but not everyone can afford to travel to markets, he says. Many of them are likely to become hybrid physical/digital events in the future. Also, many of the new streaming platforms that are looking for niche content don’t have pre-existing industry relationships.

“They might come out of the technology world, and it’s difficult for them to ramp up and find the level of content they need quickly to populate their platforms,” says Lischak.

RightsTrade has more than 31,000 registered users who can finalize agreements for programming on the site. Looking ahead, Lischak says RightsTrade ultimately intends to build out delivery and payment functionality as well. “Once we institute those, we’ll probably implement a small transaction fee,” he says. “We’re thinking in the 1%-2% range, so it’s not too painful for anyone.”

Singapore-based Vuulr’s business model is different. Sellers don’t have to pay a listing fee but are charged 10% of each deal. Vuulr claims 7,500 sellers from 160 countries, and 6,000 buyers from 150 countries. “Vuulr has aggregated into one place one of the largest, most global and diverse catalogs,” McKee says.

Since January 2020 the platform has generated 1,700 licencing deals so far, he says. U.S. sellers lead the way, accounting for over 50% of deals, followed by the U.K., Netherlands, Nigeria, Canada, Singapore, Australia, India and Israel. U.S. buyers are also responsible for most acquisitions, again more than 50%, followed by Singapore, India, Australia, Russia, Nigeria and the U.K.

Vuulr also offers a screening-room function for buyers. It has recently launched a white label service too, powering business-to-business distribution portals for firms such as Bridgestone Media Group, the National Film Board of Canada, Insight TV and the Paris Intl. Film Festival.

One issue for platforms such as Vuulr, which generate revenues from transactions, is that buyers can be happy to browse the site, but will sometimes go directly to the distributor to buy the program.

McKee says he doesn’t see much evidence of “leakage,” the industry term for those who window shop and transact off-platform.

“If you’re a buyer, using our platform is free. You can’t be cheaper than free,” he says. Vuulr is convenient too, McKee argues. “The reality is that if you find a good piece of content from, say, a Turkish, Argentinian or Belgian company, good luck to you to find a website, the telephone number, or the right person to speak to. It turns out it is really hard to buy. Whereas on our platform, when you submit an offer we do everything behind the scenes to get that offer in front of the right person.”

McKee also makes the point that distribution marketplaces including Vuulr can effectively sell a wide variety of content to buyers around the world. Drama is its biggest-selling genre, with a 16% share, followed by comedy (8%), shorts (7%), documentary and thriller/suspense (6%) through to crime, children’s, horror, historical and lifestyle. As such, Vuulr breaks the 80/20 rule of selling that dictates 80% of sales comes from 20% of content.

“That’s a function of low bandwidth, manual face-to-face selling,” he says. SVOD and AVOD, he argues, can super serve niche viewing habits at scale. “We’re able to match great niche content, whether it’s horror, science fiction or travel shows, with the buyers that are looking for it.”

By contrast, U.K.-based ProgramBuyer bills itself as a non-transactional marketing site, promoting content from worldwide distributors to its database of more than 4,500 buyers.

Launched by co-founders Roz Parker and Edwina Thring, former colleagues at National Geographic Television Intl., ProgramBuyer hosts more than 120,000 hours of content from more than 160 global distributors.

Sellers pay a monthly listing fee according to the number of hours marketed on the site. This gives a distributor tits own page on the ProgramBuyer site, ensures placements in its daily mail shots, home page banners and social-media campaigns. Parker bills ProgramBuyer as a department store for buyers to be able to search and screen full-length screeners on a single site.

“When they find programming they are interested in, they go back to the distributor to negotiate and conclude the deal face to face.”

Parker says the site has a detailed genre tree that buyers can use to search using specific criteria. Exclusive to ProgramBuyer is the PB Alerts function, which allows buyers to receive notifications for specific types of programming as soon as that content is added to a distributor’s own website. Recently launched is a dedicated page for producers, enabling them to promote co-production opportunities to its audience of registered commissioning editors.

Meanwhile, Exeest is also a non-transactional service. The new company is co-founded by former CFO global IT at NBCUniversal Shabbir Aqeel Danish, filmmaker and tech entrepreneur Matteo Petrelli and Wall Street executive Anthony Costanzo. Exeest’s advisory board includes former Condé Nast president and CEO Bob Sauerberg and former HBO tech exec VP and chief digital officer Diane Tryneski and ex-Turner exec Lauren Hurvitz.

Exeest chief commercial officer John Pollack is quick to stress that distribution is a relationship-based business. As such, he says Exeest is not a platform that aims replace industry connections or that wants to consign trade markets to the scrapheap.

Instead, Pollack bills Exeest as a “sales tool to create connections to enhance the sales process, to help sales executives to do their jobs a little bit better by creating opportunities that hadn’t been there before.”

Sellers are charged a fee to list content on Exeest. Then buyers can browse the site; if they find a title they like, they can follow up directly with the seller off platform to agree the deal.

For buyers, the advantage is that they can quickly look for and screen content from multiple distributors in one place without having to navigate multiple sites or remember a raft of different access passwords. Buyers can search by genre, windows, rights, territories, while Exeest’s A.I.-powered recommendation engine learns buyers’ preferences to provide insights and title recommendations specific.

Pollack says Exeest has sought to differentiate itself through technology, noting that the site is intuitive to use and echoes the look and feel of a streaming service such as Netflix. As the company has only just launched, Exeest has sought to offer a curated list of premium content rather than promising to feature the largest number of titles in the market.

“We’ve not gone out and said we want everybody’s content, and we want 100,000 titles on the platform. For me, logging into a platform and seeing that much content doesn’t work — it makes the buying, and the selling process, very difficult.”

Singapore-based Allrites says its mission is to “democratize content and maximize the revenue potential for content beyond what is possible by traditional content distribution methods.”

Founder and CEO Riaz Mehta says Allrites’ initial focus was the Asian market, but it has become more global with clients ranging from new Bangladeshi OTT platforms to sellers such as Australia’s Flame Distribution, Columbia’s Caracol Television,Sony and NBC.

Sellers often use Allrites to sell programming to buyers outside the main Western markets that they have well covered, says Mehta, whether in Asia, Africa and the Middle East.

Sellers can list content for free, with Allrites taking a transaction fee of around 10%. To differentiate itself from rivals, Mehta says Allrites assists with content curation and also offers sports content.

Coming up, Mehta says the platform is soon to launch an initiative to differentiate Allrites still further. Without going into specifics, Mehta says: “We are introducing disruptive layers that are very data driven, based on audience behaviors and that also provide very flexible licencing terms to our partners as well, which none of the other marketplaces is doing today.”

The timing is “absolutely right” for online marketplaces to disrupt the distribution business, given COVID-19 and fewer people travelling to physical markets, he says.

“However, I believe that the marketplaces that survive and thrive will be the ones that actually create real disruption beyond just taking a traditional licensing model and placing it on to any ecommerce platform, and that truly understand the challenges faced by buyers and sellers.”