Thursday, May 24, 2018
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Special Report: Hot from Hollywood

Elizabeth Guider talks to buyers and distributors about the demand for U.S. series abroad.

In a time of great disruption in the media business, the calculus is only getting more complex—both for the sellers of American series abroad and the international programmers who buy them.

First, scripted series are more bountiful than ever, bolder in execution and greater in ambition. Add to that the money required—to get a show off the ground, to snag ever bigger stars, showrunners and writers, to map out a sustainable and convincing story arc, and to promote and market the resulting asset to the world—only keeps rising. Meanwhile, not only are Netflix, Amazon and other SVODs rattling the traditional practices and relationships that have bound overseas buyers and U.S. sellers together for decades, but an entire realignment among major Hollywood suppliers is taking place in the background.

Two mega-mergers (AT&T and Time Warner and Disney and Fox) are currently making their way through the regulatory gauntlet; Sony Pictures Television is being streamlined and refocused under new top management; CBS and Viacom are making noise yet again about amalgamating; and Lionsgate has absorbed many of the competencies of its acquired Starz subsidiary, including several current high-end drama series for its international pipeline. At the same time, retail behemoth Amazon is rethinking its TV production strategy under new high-profile managers like Jennifer Salke, who previously ran NBC Entertainment, and Fox Networks Group veteran Sharon Tal Yguado; Netflix is on a tear and leading the creative charge with a purported $8 billion commitment to programming in 2018; and Apple, Google and Facebook all have their own content operations as well.

Moreover, the tastes of audiences abroad are shifting (and inevitably fragmenting,) just as they have at different rates and in somewhat different directions in the U.S.

Procedurals, especially those that are lighter in tone like NCIS, Blue Bloods and The Good Doctor, play well on free-to-air stations abroad, but even those broadcasters are experimenting now with somewhat riskier fare. Rüdiger Böss, the executive VP of group content acquisitions and sales at Germany’s ProSiebenSat.1 Media, quips, “U.S. series are becoming, in essence, a niche business overseas.”

Against these head-spinning developments, an ever-heftier contingent of overseas programmers will flock to Los Angeles mid-May to sift through and lock up product for their own stations or platforms back home. Yes, at the L.A. Screenings they will keep their heads down during their daytime sessions in darkened rooms watching pilots and assorted other material on offer, but, like the sellers they’ve come to contract with, they will not be oblivious to the media swirl around them.

The financial stakes—both for those who are enlisted to license these assets and those vying to buy them—have also never been higher, and transactions are more complicated as a result. How will these larger media issues affect buyers’ decisions?

“We do take into account all these developments in the States,” says Dermot Horan, the director of co-productions and acquisitions at Irish broadcaster RTÉ. “A big merger Stateside means one less avenue for us to go down for product. More U.S. suppliers mean more deals that can get done.”

Expanding on that theme, ProSiebenSat.1’s Böss ticks off a few concerns that pending developments in the U.S. have raised. For one thing—and it’s a crucial point—there’s always the fear that “creativity” will be affected by ever greater conglomeration. “We get that these mergers are money-driven, but without respect and freedom for creative talent, there can be no lasting success.”

Böss’s station group is currently fielding ongoing volume deals with Disney, Warner Bros., Fox, CBS and Paramount—all of which are going through corporate gyrations. As a seasoned veteran of the international TV business, Böss considers the distribution executives of these companies “partners,” and hence, that joint evaluation of what goes into each shopping bag is “constant” throughout the year.

Two unrelated outside analyst sources suggest that these so-called volume deals between Hollywood sellers and overseas buyers are really just “glorified cherry-picking” by the acquirers, with the contractual obligation reduced to three or four series per year from any single supplier.

The reduction in the number of obligatory series for free-to-air exposure abroad, Böss and other buyers say, has happened because the abundance of shows coming out of America is becoming overwhelming at a time when every foreign broadcaster worth its salt has goosed its own local production output.

The number of projects coming down the pike in the U.S. is telling. There were 400 scripted series two or three years ago, and that is now set to surpass 500. Several executives note that there is more money available to finance the series than there is top talent to shepherd them successfully.

Not everything from the U.S. works abroad, or works as well as a local contender in any given territory. But the jury is out on whether the oversupply has so outstripped demand that it has led to prices falling. The sellers’ perspective on this excess of creativity is interesting.

Stuart Baxter, the president of international distribution at Entertainment One (eOne), suggests that “the bottom has dropped out of the middle,” meaning nowadays, it pays to go all-in on ambitious projects with top-tier talent and substantial financial backing, or to target a narrow segment of the market with a conservative financial commitment. With so much product for buyers to choose from, shows that are neither high-end nor clearly niche risk being left on the shelf.

“Procedurals? They’re wonderful for the international market, but the ‘Big Four’ U.S. networks have of late moved toward darker, serialized shows,” Peter Iacono, Lionsgate’s president of international television and digital distribution, points out. “And those sometimes have more trouble translating abroad.”

Still, Baxter and Iacono are both bullish about the state of the business globally.

“Overall, there is a huge appetite for U.S. series, with the demand for distinctive, quality originals never greater,” Baxter emphasizes.

Even with such an unprecedented supply, Iacono contends that smart layering of rights through various windows will result in “significantly better profit margins.”

Keith Le Goy, the president of worldwide distribution at Sony Pictures Entertainment, adds, “We live in a world where viewers want what they want when they want. Linear broadcasters, by and large, are embracing this reality, knowing as they do that some viewers still flock to curated, highly promoted and less taxing material. For some assets, scooping up all rights doesn’t really make sense, while for others, streaming actually works to drive viewers back to linear viewing.”

In other words, Le Goy continues, “in such a fragmented world there are multiple ways of exploiting any given asset.” Sometimes that even means producing localized versions to complement or supersede the original; Sony’s Russian adaptation of Everybody Loves Raymond is a highly successful case in point.

Another result of digital dynamos like Netflix entering the market, Lionsgate’s Iacono believes, is that deal-making decisions occasionally come together more quickly. For the Dirty Dancing TV remake, following competitive bidding, the linear platforms prevailed over the SVODs, and Lionsgate licensed first-window rights to key broadcasters in major territories. The company also opened a second window for SVOD following the linear premiere.

While few buyers wished to provide on-the-record criticism of specific American shows, several rattled off a few genres that don’t resonate as well abroad right now as they do back in the States. As one buyer put it, “Americans may be surprised to know that This Is Us is not the megahit it is Stateside, Empire has fallen on deaf ears, several musicals have stumbled and military-minded dramas often lose the ratings battle overseas.”

Still, stresses Cathrine Wiernik, director of programs at Sweden’s Bonnier Broadcasting, there’s an ongoing appetite for U.S. shows in her region, though nowadays it’s primarily for SVOD exploitation.

“Scandinavia was at the digital forefront,” she explains, and as a result, programmers there have developed a strategy for identifying what she terms “the totality of a show’s potential.” TV4 and its offshoots can exercise “leverage” over some of the pure SVOD players by cross-promoting effectively among different windows.

“Another thing we do,” Wiernik continues, is make efforts “to cultivate producers and writers [Stateside] we’d like to be in business with. It’s important to get in at a super early phase,” given all the competition. In addition to Game of Thrones, the shows that have done well for her company include a handful of Starz series and some titles from Britain, a territory with which Scandis arguably have an even greater affinity than they do with the States.

Jakob Mejlhede, the executive VP, group head of programming and content development at MTG, says the big issue for companies like his in Scandinavia is how to maintain sufficiently flexible windows on U.S. product now that global players like Netflix and Amazon are gobbling up global or regional rights.

“There needs to be a balance,” Mejlhede stresses, “so that we can obtain the tentpoles we need and secure catch-up and stacking rights for our own SVOD services.”

Since Scandinavia experienced linear erosion earlier than most territories, he further notes, his company is reacting by stepping up its own original production efforts. “We’ll have 10 originals for our SVOD platform by 2019, and 20 by 2020,” Mejlhede says. “Don’t misunderstand—we love American programming, but we have to find creative ways to compete against these new digital competitors.”

Not that business at the Screenings will be stymied; a quick count of U.S. projects currently greenlit or jostling for a berth suggests an abundance of new hours on offer as well as half-hours, plus a sizeable array of limited series and assorted nonfiction fare.

Several overseas buyers told World Screen they were already “tracking” one or two projects on their radars. Among those they got a whiff of and were impressed by at MIPTV in April is an upcoming series produced by eOne called The Rookie, which toplines Nathan Fillion as a quirky 40-year-old recruit to the police department, for ABC in the U.S.

Another that was singled out is a crime drama called Murder, which unfolds from several different points of view. It’s a Warner Bros. project. Still another buyer said he was looking forward to (yet another!) procedural from the Dick Wolf fold, this one bound not for NBC but for CBS, and a second, from the Sony stable, called L.A.’s Finest, with Jessica Alba in uniform. It’s vying for a slot on NBC.

However, no buyer wanted to tip his hand about specific acquisition plans for competitive advantage reasons.

“Beyond a few top-tier series, what we are interested in more and more are shorter-run limited minis,” RTÉ’s Horan says. “A few years ago, these shows were add-ons on the big studios’ slates; now they are the key drivers.”

In Ireland, he points out, The Handmaid’s Tale, which he acquired from rights-holder MGM, was “all the talk” this past season. Similarly, the David E. Kelley–penned adaptation of a Stephen King piece called Mr. Mercedes (with Irish native Brendan Gleeson in a key role) pulled in impressive numbers for RTÉ.

There’s always room for a good procedural or two—Blue Bloods, for example, performs smartly in Ireland—but it’s not like every American procedural finds an audience in every territory. And, as previously noted, a critical darling and popular hit like the Fox-produced This Is Us musters a fiercely loyal but decidedly limited fan base, and not just in Ireland.

“There’s a lot more breadth to the international market now than a few years ago and a lot more layers of complexity,” says eOne’s Baxter, who notes that many of the key European broadcasters now boast their own digital platforms (which allow for catch-up or binge-viewing and rely on edgier fare).

Nowhere does this become more palpable than at the L.A. Screenings, the weeklong sales bazaar that unspools across Hollywood in the wake of networks’ pilot selections and their pitches to domestic TV advertisers.

Amid the corporate discombobulation at the major Hollywood studios, an array of independent producers and distributors has started to flex its muscles, suggests MTG’s Mejlhede. “I believe the market is actually very buoyant at the moment, and it’s good to see other potential suppliers so energized.”

He’s not alone in his assessment. “All one has to do is look around town,” another source observes, “to companies as varied as MGM, eOne and Global Road, among others, to appreciate that the market for IP, from whatever source, is expanding.”

Even in Brazil, where telenovelas have traditionally ruled the airwaves, more room is being made for American fare, especially on local SVOD services.

Alex Medeiros, director of content development and acquisitions at Brazil’s Globosat, points out that several U.S. dramas play on one or another of the 30-odd channels that he’s charged with programming.

“Most well-known U.S. series are widely available in Brazil and Latin America in the pay-TV sphere via pan-regional output deals,” he says. “At Globosat, we have in recent years also acquired series from other countries, including Canada’s Murdoch Mysteries, France’s Les Revenants and Israel’s Prisoners of War (the original version of the Showtime series Homeland),” he explains.

“However, with our [new] SVOD services, we expect to acquire more content produced by the U.S. studios,” he adds.

Pictured: Warner Bros.’ Riverdale.

About Elizabeth Guider

Elizabeth Guider is a contributing editor for World Screen.


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