Elizabeth Guider Reports: SVOD a Hot Topic at the L.A. Screenings

LOS ANGELES: A single four-letter word has been on the lips of international buyers and Hollywood sellers all week during the L.A. Screenings marathon: SVOD.

That window is now shorthand for a dizzying array of new ways to slice and dice TV rights—and a lot of people are fearful of getting cut in the process.

On the Fox lot Wednesday, as at several other studios previously visited by World Screen Newsflash, buyers at lunch were heard discussing issues of windowing with the same animation they used to, in a simpler, less connected world, talk about the relative merits of this or that show.

Disruption of established business practices tends to do that.

"The stakes are high and there's a lot to lose—or gain," Marion Edwards, the president of international television at Twentieth Century Fox Television Distribution, told World Screen Newsflash. She added that these new rights challenges have indeed come to dominate discussions with overseas clients.

With so many windows, platforms and fast-moving crosscurrents, she went on, the business is not for "the faint of heart."

Similarly, Belinda Menendez, the president of NBCUniversal International Television Distribution and Universal Networks International, said Wednesday that content suppliers needed to be "tactical and strategic" in their thinking about how to structure these new deals.

"The good news is, I believe there's a home out there for every show, but we need, increasingly, to dialogue with both new and established partners—and be mindful of the ecosystem."

Certainly, it's no "walk in the park," Menendez added.

The first salvo in this new era of digital hand-to-hand came arguably last year, when Warner Bros. inked away worldwide subscription video-on-demand rights for its series Gotham (which airs "linearly" on FOX Stateside) to Netflix.

Smart and innovative as the upstart streaming video player is, this is the company that got booed at the Cannes Film Festival last week, arguably becoming the new embodiment of American cultural imperialism in the minds of some Europeans.  

"Disruptive in the extreme" is how at least three European program buyers described the deal for Gotham, though World Screen Newsflash has of today lost count of how many buyers, especially established broadcast executives, are hot and bothered by these digital developments.

Let's say "lots."

“Viewer behavior has changed,” said Cathrine Wiernik, the programming director for general TV at Sweden’s TV4 Group. “We ourselves have abandoned output deals with the American majors in favor of responding more adroitly to what our viewers want.”

“Certainly, in order to compete, we need to rethink our deals to create a win-win,” she added. “From our [U.S.] partners, we need faster access to shows we buy—we need stacking of episodes, for example—so we can stand up against SVOD services from others, and from blatant piracy.”

The Swedish buyer is not alone in her thinking. Several other buyers confirmed that their negotiations with Hollywood studio suppliers are starting "to hinge on" how those rights are divvied up.

Many international outlets have their own SVOD platforms, à la ProSiebenSat.1’s maxdome in Germany, and they'd like their deals with the Hollywood studios to include an array of digital rights in their contracts.

Still, immediate cash on the table is hard to pass up. Netflix has stated that it wants to take worldwide SVOD rights on the U.S. shows it's interested in. (Added twist: Netflix is not yet established everywhere; plus, other streaming services may follow in its wake….)

Studio suppliers have to weigh—for each show they license, and in each territory—the pros and cons of granting digital rights globally to one big player or splitting rights piecemeal with their long-time "linear" broadcast partners in any given territory.

And SVOD is not the only disruptive force that's affecting deal-making in the TV biz.

Dermot Horan, the director of production and acquisitions at Ireland's pubcaster RTÉ, argues that time shifting with DVRs has also rattled international broadcasters. Some 50 percent of viewing in Ireland for fiction, for example, is now catch-up or delayed, which means that those consumers are zipping over the adverts, which helps underpin the pubcaster (as well as purely commercial stations).

“Technology is challenging the entire rights ecosystem,” Horan added.

Beyond SVOD, for example, there are other modes of consumption that need to be scrutinized, and possibly monetized.

One of those is virtual storage, whereby consumers can file away content that they've downloaded in the cloud, indefinitely. How that impacts rights owners, and what they do to retain control over the long-term exploitation of their assets, will be crucial as consumption becomes increasingly digital.

And then there's stacking of so-called box sets.

Sarah Wright, the head of acquisitions at Sky, said these too are important for full exploitation of a series' potential. "Our customers love our on-demand catalogue so they can view at their leisure—and the rights are always subject to much discussion [with our supplier partners]."

She added: "We are really starting to see that the scheduling of box sets of preceding seasons on our service really benefit the returning new season of the linear show. And that is ultimately really good for the series' longevity."

"The big question we ask ourselves [at Fox] is how does a particular show move through its opportunities," Edwards said.

Getting to that answer, given pressures to boost revenues each quarter, avoid piracy, and satisfy profit participants, is what another studio supplier called "an unprecedented obstacle course."

Check out World Screen's guide to the network fall season here.