With COVID-19 halting productions and sports having disappeared from schedules, European buyers are looking for smart, cost-effective ways to fill their grids.
The rapid global spread of COVID-19 over the last two months has left channel programmers with a new, unprecedented set of problems. Stay-at-home measures shut productions down across Europe and North America. Bans on large gatherings led to the postponement of the Summer Olympics and the EURO 2020, two crucial events on broadcaster schedules. All other team sports are also on hold for the foreseeable future, although some leagues are plotting spectator-free returns. Meanwhile, ad revenues have taken a hit, resulting in some broadcasters cutting programming spend, or at least finding ways to be far more efficient—a tactic they’ve been deploying for a while now as the number of direct-to-consumer services proliferates. TV buyers across Europe are more aware than ever of the need to adapt to survive. Namely, they have to devise smart buying strategies to counter the deep-pocketed global players. With Apple and Disney having finally launched their new on-demand services in key territories and Netflix still leading SVOD growth in Europe, competition remains intense.
This survey of program buyers was conducted pre-pandemic, as we sought to hear from acquisitions executives about what they’d be looking for at MIPTV. Following the cancellation of MIPTV and a host of other events this spring and summer, we went back to these programmers to hear about how COVID-19 had impacted their strategies.
“Of course, like any other broadcaster, we have been greatly affected by the current situation,” says Sofie Schütt, the head of acquisitions at TV4 Media. “Productions are affected, some paused, some canceled, but some are going ahead with necessary amendments (according to strict regulations but a lack of a lockdown policy in Sweden). On the acquisition side of things, we are putting great effort into tracking already acquired and planned titles. There are still so many question marks regarding many productions and we are doing our very best to balance this with looking for new, additional titles. I think people are especially looking for escapism titles at the moment, which tallies very well with our content strategy anyway, hence no big changes with regards to our approach to content and genres.”
“I am not sure that [our buying strategies] have shifted as such,” concurs Sarah Wright, who leads Sky’s buying team and was recently promoted to run Sky Cinema in addition to being head of acquisitions. “We are always on the lookout for great content—whether it is series or movies—and that continues throughout this pandemic. We have never bought to fill slots on our channels—[we’ve] always taken into account whether a show or movie will be right for our customers, so that’s not changed. We are pretty fortunate that we have a thriving slate of commissioned and acquired series and movies, many of which were already in the can, as well as a great library of fabulous film titles—over 1,000 movies on our Sky Cinema on-demand service, so we have lots of great telly for people to enjoy across the whole Sky portfolio.”
Wright adds, “We are very conscious that our customers are watching more TV in these difficult times, so we are keen to make sure that we curate the content we do have even more brilliantly than ever so they can find all of the great titles we have to offer. For example, our Sky Cinema editorial team has been working hard to showcase lots of different seasons and pop-up channels, and you will see more of those in the coming weeks. On the plus side, Four Kids and It, our original movie which debuted on the service at the beginning of [April], has really resonated with our customers—so we would love more of those!”
JUST THE FACTS
Also in the U.K., Sasha Breslau, ITV’s head of acquired series, is “predominantly focused on acquiring repeat runs of some of our classic commissions, both drama and factual entertainment,” for the main channel. “Across the digital channels, we are buying some new male-skewed factual-entertainment programs for ITV4, and further seasons of some of our popular franchises on ITVBe, such as Bachelor in Paradise.”
In Germany, which was slowly beginning to reopen at the start of this month, Thomas Lasarzik, executive VP of group content acquisitions and sales at ProSiebenSat.1 TV Deutschland, reports, “In terms of licensed shows, apart from the necessary rescheduling due to delays in production and dubbing, we are in the fortunate situation that we did not have to look for any new shows to fill the gaps, yet. As of now, we are doing fine with what we already have. Nevertheless, we keep our eyes open for any new developments during this crisis, to be ready to take the necessary steps.”
Silke Regier, executive VP of international acquisitions at Mediengruppe RTL Deutschland, points to the crucial role of local content on her channels. “We have been relying on German productions for the last [few] years and even during these challenging times the demand for local content remains constantly high. Additionally, we acquire international programs that match the needs of our target groups and fit to our lineups in the current situation. Whereas the types of shows and genres have not changed, it requires more flexibility within our deal structures. We intensified our focus on selective acquisitions considering various possibilities of exploitation as adaptable scheduling proves to be even more important.”
Anette Romer, the head of acquisitions and formats at TV 2 in Denmark, says COVID-19 has led to her and her team “rethinking the schedule, so our acquisitions budget is largely unaffected. We are not looking for ‘pandemic’ programming, as the situation has been developing so quickly that our news channel is the primary source of information for the Danish viewers. We have been lucky to have a series like Race Across the World launching [recently], and we can see that the viewers really want the kind of break and getaway they get from this series as it is doing very well both on linear and catch-up.”
Romer notes that production halting on The X Factor in Denmark resulted in openings in some key prime-time entertainment slots. “We acquired popular Danish feature films for that, but international programming is not strong and relevant enough to go into prime time on the main channels, so slots left empty by postponement of some series like The Farm (ready but shelved for the autumn) are filled with other Danish programming. Our biggest challenge has been turning our TV2 TV 2 Sport X channel into a film channel (due to the lack of live sports). We have done this through films we already had in stock and finding flexible ways with runs, so we have not increased our acquisitions budget.”
Meanwhile, once productions resume and sports can be played again, competition with the OTT platforms will be as fierce as ever, especially as SVOD players fight to maintain the customers they secured during the shutdown. Drama remains a crucial battleground.
“It’s no secret that license fees for scripted are getting higher and higher,” says TV4 Media’s Schütt. “They are at astronomical levels. There are more people out there buying content. In-demand shows are becoming harder and harder to buy because of competition from global giants like Netflix.”
Now that the Hollywood studios have their own SVOD services competing against local on-demand platforms, European buyers are waiting nervously to see how much content is going to be held back from the market. Of note, WarnerMedia last summer revealed that it preferred to have Friends on its HBO Max platform in the U.S. than continue licensing the show to Netflix.
“It seems likely that we won’t be able to acquire shows under the Disney banner, although that excludes shows that would have fallen under Fox before the merger,” says ITV’s Breslau. “That’s going to have an impact. When all the new SVOD services are available and we know which rights will be reserved for those services, we’ll have a fuller idea of their effect on the market.”
Breslau adds, “The U.K. is a market where high license fees can be commanded for premium shows. That is not an insignificant amount of business. Will the big suppliers be prepared to take a short- or mid-term hit in order to keep controlling their own IP?”
Over at Sky, Wright says that being owned by Comcast does not give the platform any advantage over other buyers regarding shows owned by NBCUniversal. “We assess and acquire their shows under the same criteria as those from our other suppliers such as ViacomCBS, Warner Bros., Sony, Entertainment One or Disney…. As ever, we have a broad shopping list—from great procedural series for Witness and Sky One through to arts programming and feature films—both original (we will co-produce if necessary) and acquired for Sky Cinema.”
Strong performers have included true-crime content on Sky Crime, such as I Love You, Now Die: The Commonwealth v. Michelle Carter, to old favorites like Hawaii Five-0, NCIS: Los Angeles and MacGyver, and the superhero shows on Sky One. New series such as Lincoln Rhyme: Hunt for the Bone Collector, Watchmen and The Outsider have also scored.
“Acquiring the best of the U.S. along with international content from around the world continues to be a significant pillar of our content strategy, and I can’t see that changing any time soon,” Wright says.
As all broadcasters focus on beefing up their on-demand portfolios, Sky looks to be in a strong position. “We have always acquired a broad spread of rights, so I think we have been ahead of the curve. We have a massively popular on-demand offering—lots of great boxsets for customers to access, as well as the ability to download to watch movies and series on the go and watch later, as well as catch-up and series stacking.”
Lasarzik at ProSiebenSat.1 TV Deutschland is approaching the market with an open mind. “We have to cover lots of bases, as our group’s portfolio of channels and platforms has diversified extensively over the years. Therefore, we do not focus on any specific genre or target audience, be it entertainment shows or factual,” he says. “In terms of scripted shows, we are always looking for good crime procedurals with broad appeal, but also with the right twist. Another thing on our list: high-class limited series with a built-in event-potential. Plus, we hope to get lucky with European productions that fit our needs this year.”
A local version of the South Korean format The Masked Singer has been a hit for ProSieben, but new imported drama has taken longer to establish itself with audiences. NCIS continues to be popular, as does 9-1-1.
Budgets have remained flexible. “We do continue to successfully shift our investments to local content,” Lasarzik says. “This trend is one to stay for the next couple of years. But if we come across the right scripted show, we are flexible enough to shop.”
Negotiating nonlinear rights has become more critical since the streaming platform Joyn (a joint venture with Discovery) debuted last year, adds Lasarzik. The service provides 55 TV channels as free live streams.
For Romer at TV 2, priorities include finding factual formats suitable for prime time, factual entertainment for weekdays and entertainment formats “with a congenial and lighthearted tone of voice for weekdays and weekends.”
She adds, “High-end documentaries are always a priority on our shopping list, as is comedy for Zulu and crime for Charlie. TV 2 also continues to acquire top-class feature films. Building TV 2 Play is now a highly prioritized strategic goal and genres that work well on-demand are a focus point for us.”
Securing on-demand rights is becoming increasingly important to her. “We try to get the best possible nonlinear rights in every deal, and it is very important for us to acquire stacking rights for every sequential title,” she says.
In the U.K., Nick Lee, Channel 4’s head of series acquisitions, is “hoping to find cost-efficient factual content that has a U.K. angle or a new angle on a known period, preferably shows that can work for More4 and Channel 4, feature docs with a human-interest angle.” He is also keeping an eye out for new internationally led English-language drama in development. “We are open to early collaborations and co-productions in this area, as we did with Catch-22.”
The adaptation of the Joseph Heller novel, starring George Clooney, was a highlight of 2019 for Channel 4. Lee says that of late, the station’s acquired slate has performed solidly.
A stand-out success was Rick and Morty, popular on youth-friendly E4, and the biggest U.S. animation on any U.K. channel in 2019 for 16 to 34s, and E4’s biggest show of the year for young audiences. On More4, a strong performer was Shocking Emergency Calls, bought from TCB Media Rights at the preproduction stage.
He adds, “We are seeing tremendous growth on All 4, our VOD service. As that grows, we are allocating more resources to acquiring content for that. High volume is key; so that we get the benefit of bringing an audience to a show.”
As for the ability to stack rights, this is standard on all new titles. “If the opportunity and the valuation matches, we will bid on an extended on-demand period,” Lee explains. “We need to deliver our acquired shows to our audiences with maximum convenience, a position that matches our commissioned slate.”
ITV continues to seek non-scripted shows—female-skewed, glossy aspirational reality and lifestyle shows for ITVBe and male-skewed factual entertainment for ITV4. The company is also eyeing up U.S. chat shows for ITV2 and animation for the kids’ channel CITV.
“Family Guy and American Dad! remain strong players for ITV2,” says Breslau. “ITVBe has experienced some success with Love Island USA and Love Island Australia. The Real Housewives franchises New Jersey, Beverly Hills, Orange County and Botched are all consistent, steady performers.”
Breslau continues, “Given that the purpose of acquired content is to find cost-effective solutions to slots that we can’t fill with commissioned programs, and budgets are under pressure because the cost of commissioned shows is increasing, there’s always a squeeze on the amount of money we have to spend. Equally, because we position ourselves as someone who can partner with pay platforms or SVODs in terms of windowing, we can be very competitive on rights.”
At TV4 Media, meanwhile, Schütt requires content for the broadcaster’s AVOD platform in Sweden, TV4 Play, and SVOD service, C More, in the Nordics. “There is a greater need for volume. That is the biggest change for us,” she says. “The challenge is to acquire enough shows so that our services have the necessary depth and breadth.”
BATTLE FOR RIGHTS
Her objective is to buy standalone rights, rather than deals that have catch-up and stacking rights, and for as long as possible. “We aim to have two- or four-year deals, although the latter is rare. Everything has a price. It depends on who you’re buying from. Different studios and distributors have different approaches. Some are quite comfortable selling long windows,” she explains.
“We try to find the best combination between the price and the time period. Sometimes we’ll buy shorter windows because that is all we can agree on, and we’re willing to do it for a lower price tag. A lot of the time, people might not find the show until it’s been there for five or six months. If the license period is short, it is hard to get value from the long tail. The longer, the better, but it is not always easy. Money talks.”
Or, as ProSiebenSat.1’s Lasarzik puts it when asked what factors will impact his acquisitions strategy in the year ahead: “Quality, perfect channel- and platform-fit, price and terms.”
RTL’s Regier thinks that before too long, there will be fewer shows to buy. “Due to the vertical integration and upcoming direct-to-consumer services that are offered by content providers, we expect there will be fewer international programs available,” she says. “To secure strong international brands for our offerings, flexibility is a crucial factor in our acquisition strategy.”
BEFORE IT’S GONE…
Schütt reflects a similar sentiment. “I foresee a greater problem in the future with our content providers going straight to the consumer. You can find a lot of mid-range drama, but the top end is snapped up by Netflix or Amazon for huge fees, or Disney might hang on to their own series. A lot of stars and talent are getting tied up, which means the top-end titles are more difficult for us to get ahold of. But there are plenty of mid-range shows out there.”
What are buyers struggling to find in this hyper-competitive, unpredictable market? “Innovative, high-concept dramas seem to have taken a back seat in recent years—it would be great to find the next Manifest, for example, as our customers love them,” says Wright. “I’d also love to find some brilliant new British movie ideas too. How about a Full Monty for 2020? But then everyone wants that!”
TV 2’s Romer would like to see fewer dark, gritty crime dramas and more soft procedural crime series. “It seems like the market is slowly responding to this,” she says. “As everyone reads the same data, the hunt for titles that perform well on-demand—for example, true-crime or other strong docs—should carry a red alert because they come with a very high price tag.”
“I am not struggling to find anything,” says ITV’s Breslau. “The only thing I’d like to see more of are shows for 16- to 34-year-olds, the kind of things that would be on The CW network. It would be great if there were more variety in that space with the glossy production values and the high standards our audiences expect. That is a very competitive space because Netflix and Amazon are commissioning their own originals that appeal to that demographic, and they are prepared to scoop those shows off the market before they’ve even finished production.”
Kristin Brzoznowski and Mansha Daswani contributed to this report.