Sony Pictures Television’s Andy Kaplan and CBS Studios International’s Armando Nuñez discussed trends in the global media marketplace in conversation with World Screen’s Anna Carugati at the Board and Members Meeting of the International Academy of Television Arts & Sciences in New York.
Kaplan is the president of worldwide networks at SPT, overseeing a portfolio of 160 channel feeds reaching nearly 2 billion subscribers in over 175 countries, including flagship brands AXN, Sony Channel, Animax and Crackle.
Nuñez is the president and CEO of CBS Studios International, which has 13 offices around the world tasked with monetizing CBS, The CW, CBS All Access and Showtime shows. He also oversees the company’s global channels business, which now includes Network Ten in Australia, as well as formats and co-pros.
On the state of the global pay-TV business and linear channels, Kaplan said, “The ecosystem is very healthy.” When it comes to the pay-TV or linear channels portion of that media ecosystem, meanwhile, it depends on the market, Kaplan said. There’s pressure on operators in the U.S. “to rationalize and reduce their costs, which puts pressure on all of the programmers.” Whereas at one time “the channel providers were playing a real-estate game where they wanted as many channels” as possible, the model is shifting now to fewer, better-quality propositions, “highlighting the quality of brands.” That trend is also playing out in some international markets. In many emerging markets, “there is still a lot of growth in these pay-TV infrastructures,” but OTT is having an impact.
In the international-distribution business, Nuñez said one of the biggest shifts in the last five years has been the way viewers consume content. “It hasn’t been evolutionary; it’s been revolutionary. At the end of the day, the good news for broadcasters all over the world is that there is still so much engagement in content. The challenge is how you monetize it. There are still massive audiences engaging with our content. They’re not engaging the same way they used to on a linear basis. The challenge we have as an industry is how to shift the monetization to that digital viewing.”
Carugati asked Kaplan about the importance of channel brands. “Brand really matters in the world today, more than ever, as a differentiator. If you have a well-known brand, it’s just another way for the consumer to find what it is they are looking for. At the same time, shows are brands themselves if they break out.”
“It’s vitally important” for a show to reach that status, Nuñez said. “It cuts through the clutter. We’ve been fortunate at CBS to have many shows that in themselves have become brands,” among them the Star Trek franchise, with Star Trek: Discovery serving as a key piece in the launch of CBS All Access.
CBS Studios International is also distributing the Showtime brand. “We have 15, 16 different partners around the world that utilize the brand and the portfolio of content.”
On the impact of OTT globally, Nuñez noted, “SVOD is not going to kill broadcast television, it’s just an evolution in the way people are going to consume content.”
Kaplan added, “A lot of these players are either your competitor or your partner. As channel providers, we’re competing with the Netflixs and the Amazons of the world in terms of acquiring content. They are two more buyers in what was already a marketplace filled with buyers. At the same time, we are also creating content. Absentia was initially commissioned for our international networks so we would have content that would work for our viewers, that we had ownership and control of and a lot of flexibility with. We then expanded that positioning by distributing it outside of our channel footprint. Eventually, we ended up licensing the show to Amazon, not only internationally but also in the U.S. We found a way to have our cake and eat it too in that the initial reason for doing it was to create content for our channels, which is what we did, but then through a windowing strategy also found a larger footprint and revenue stream for it. So our competitor was also our partner.”
Kaplan went on to say that sports will be a key area to watch as OTT platforms look to offer up significant sums for the digital rights to major tournaments.
Carugati asked Nuñez about the windowing approach for each show. “There are a lot of different components that go into that thought process. Our job is to maximize the monetization of our content. There are times we look at the potential of doing a [global] deal with a Netflix or Amazon, versus carving up the world in our more traditional way and licensing it that way. There’s no hard and fast rule we follow. It depends on what the opportunity is, what the show is. We’ve done a bit of everything. We made a strategic decision with the Star Trek franchise to license [Star Trek: Discovery] outside North America to Netflix for a lot of different reasons. Bell is our partner in Canada. We would have had the opportunity to license the Showtime content to a Netflix or Amazon, [but] we went around with these partnerships we have with Bell, Sky, Canal+, Telefónica, Stan, Wowow. It depends on the specific scenario we’re looking at.”
Both Kaplan and Nuñez emphasized the importance of high-quality, distinctive programming in this cluttered environment, making it a good time for both creators and distributors.
“There are more buyers looking for content,” Kaplan said. “That creates more competition for buyers, so we then go create our own shows for our channels. The result of that is more and more really terrific content out there.”
Nuñez added that American content is being widely distributed around the world, but not monetized in the same way—“there’s a big difference if you’re in France in prime time on TF1 or M6 than if you’re on a DTT channel. It goes that way around the world. The content will get distributed. The question is, at what monetization level?”
Local content will rate better, Kaplan noted, but will cost more.
Carugati then asked Nuñez about CBS Corporation’s decision to acquire Ten in Australia. “It was a unique set of circumstance,” he said. “We had been long-time content partners with Network Ten going back two decades. Six years ago when DTT expanded, we were partners with Ten on one of their DTT channels, ELEVEN. The company was put into administration earlier this year, which created the opportunity for us to acquire the asset. At the end of the day, CBS is a broadcaster and while Australia and the United States are very different markets, we also have a lot of similarities. We saw a lot of synergies. It was an opportunity to expand our global footprint and also utilize those assets to go down the road of what our subscription ambitions are in that market.”
Both executives said that while remaining focused on quality content is key, accessing talent in such a competitive environment is a challenge.
Kaplan—who is the Gala Chair for the 45th International Emmy Awards, which were presented in New York City last night—added, “There’s a whole world of amazing creators and producers, all of whom are now going to have more and more opportunity to have their shows made and tell their stories, because there are so many places to partner with.”