Endemol Shine International’s Cathy Payne

Cathy Payne is no stranger to big company mergers. Back in 2009, when Endemol acquired the Southern Star Group, Payne was chief executive of Southern Star International and she was tasked with combining the catalogues and sales teams of the two groups. Late last year, when 21st Century Fox and Apollo Global Management announced they were forming a joint venture to bring together Endemol, Shine Group and CORE Media Group, Payne was called upon to merge the distribution businesses. Today, as CEO of Endemol Shine International, she oversees a catalogue of 38,000 hours of scripted and unscripted programming that ranges from drama to factual, with some huge brands within that mix.

WS: How did you go about combining the catalogues?
PAYNE: The first thing we looked at was the people. While content is king, you need a strong, knowledgeable team to sell it and deliver success. We had to integrate two large businesses that were based in eight different territories and evaluate how we were going to structure the team in a way that would cater to the present while allowing for future growth. It was a detailed process and one where it was important to maintain an open dialogue on the steps that were being taken with everyone who was affected by the integration. One of the important factors is that because integration can take up a huge amount of time, we had wanted to establish a dedicated team to handle integration, so that the rest of the division would not be disturbed from their day-to-day business. As such, we have a dedicated team of rights-management, operational and financial executives who are implementing an integration plan across the next year.

In any integration, you need to ensure that the sales directors have the time to bring themselves up to speed with the content: get to know it, talk to their colleagues from the other side about the pros and cons of content, and make sure they know as much as they possibly can about as many titles as possible. When we knew the merger was happening—especially in London, where both our head offices were based—we gave each other access to our showrooms so that over the Christmas period people could watch a lot of content.

As for putting the two catalogues together, they certainly complemented each other, which was a great advantage: lots of scripted, lots of broad-audience factual entertainment and reality and game shows. And it certainly helps when you’ve got super brands in the middle such as MasterChef, Big Brother, Broadchurch and The Fall, to name a few.

WS: You now have eight sales offices around the world.
PAYNE: The head office is in London, and we have offices in Moscow, Paris, Los Angeles, Miami, Sydney, Singapore and Mumbai. One of the great things about being part of a multi-territory indie is that I can have a distribution office within a production office, so you don’t have salespeople who are off by themselves. They are an integrated part of the business. If you go to Miami, you’ll find the sales director sitting with our U.S. Hispanic and Mexican production teams.

All the sales directors are very linked up with the production businesses within the territories that they sell into. Indeed, when we are selling the finished version of a show, say The Island, which is launching on NBC soon, we won’t sell that as a finished show without first liaising with the production team in the territory to find out what format opportunities exist. Often that will result in the format and finished show being placed together and/or an agreed windowing/ holdback structure. Of paramount importance to us is to protect the franchise so that we do not have our products competing with each other. It is also important to protect a title from becoming overexposed. Consequently, there is the need for ongoing dialogue between distribution and production and they must agree on the best strategy for a particular title. Depending on the territory, sometimes the finished sale will go first, sometimes the format will go first and sometimes they will go together when a broadcaster is taking a format for the main channel, but will buy another version of the show for their digital channel. We decide on a strategy for each title as it comes along for a given territory. And the strategy for one market can be completely different from another—it depends on the market and the tastes, and what is common practice.

WS: Besides finding new titles to sell, is it equally important to look through the shows in the back catalogue and make sure that they don’t get lost?
PAYNE: Of course. In any distribution business you have the big titles that everyone goes to, but for us it’s, how do we leverage those titles to also make sure that we are focusing on our catalogue? Whenever we look at our new releases for a market, we also have a look at the catalogue and see what shows could naturally fit with the new shows. We had an example of this recently. We were selling broad-audience one-hour specials that are under a strand in the U.K. called Extraordinary Lives. We then looked back into our catalogue and we had quite a few programs that could fit into a strand such as that and then offered them up not just as three programs but also as a possible availability of ten.

Both [Endemol and Shine] had actively built up a library of non-English-language assets, which positions the library well for new broadcast opportunities—for example, a new SVOD service launching in Spain allows us to leverage those language assets to achieve sales.

WS: Scripted programming is quite sought after these days, isn’t it?
PAYNE: It is sought after. We’ve noticed a renaissance of British scripted and certainly that’s had a huge amount of success in recent years. Looking at the British titles produced and/or distributed by Endemol Shine into the U.S. in the past two years, one can only be impressed with the list that includes Broadchurch, The Fall, Grantchester, Peaky Blinders, Black Mirror and Fortitude. Humans and River will be launching later this year. Scripted from the U.S. cable networks has also done well, while in the last few years U.S. broadcast network scripted shows have struggled. Shows from the L.A. Screenings last season were a lot more successful than the two prior years, led by strong franchises such as Gotham and Scorpion. There has been a lot of talk about the phenomenal success of Empire in the U.S.; however, success in the home market does not necessarily [translate] overseas, and certainly Empire has not repeated its domestic success to date in Canada, the U.K. or Australia, which are three of the largest markets for U.S. scripted.

The U.S. cable or SVOD scripted product has come into its own; the limited number of episodes allow the producers to attract a high level of on-screen talent and off-screen creative, who are not tied into multi-season commitments that the broadcast networks would demand. Just look at the rollout of such titles as House of Cards, The Walking Dead, American Horror Story, True Detective and Fargo, to name a few. On top of that comes the non-English-language scripted whose audience internationally is growing—titles such as Bron, The Returned, The Killing, etc. The benchmark for scripted programming has never been higher.

WS: What are some highlights from your factual and factual-entertainment slates?
PAYNE: We’ve got finished episodes of MasterChef, and I do have to say I love MasterChef because it is in its essence about real people and real food. It’s not about whether you like the contestants or not, it’s about what they cook and their passion for the food and it is an individual journey. And as for MasterChef Junior, what is not to love about that? What talent and passion for food that younger audience has. Another very strong food franchise is My Kitchen Rules/My Restaurant Rules, which combines the passion for food with the best in reality television.

Other factual titles include One Born Every Minute, 24 Hours in A&E, and The Island with Bear Grylls. The U.K.’s factual-entertainment finished programming is the most successful in the world. A market where there are so many varied slots available for factual entertainment in prime time, on broadcast networks or the specialty channels, has delivered a developed sector where risk-taking is truly embraced.

WS: Which other shows have been well received?
PAYNE: We have Humans for Channel 4 and AMC, which is inspired by the Swedish drama Real Humans. We received a lot of positive interest from buyers saying it offered something fresh and different. We also have the period drama The Frankenstein Chronicles, starring Sean Bean. The story will appeal to a broad audience, and Sean Bean is a true transatlantic name. We are very blessed to have returning seasons of Peaky Blinders, Broadchurch, Grantchester, The Fall, The Tunnel and of course, the evergreen Home and Away.

WS: I imagine you are doing many deals with SVOD platforms.
PAYNE: Oh, yes, all the time. These platforms provide opportunities to exploit programs in another way, but one platform does feed off the other, so you have to look at what the cumulative benefit is. Certainly SVOD has taken away from home entertainment in a lot of markets, so you have to weigh that in. Likewise as the SVOD platforms have matured and they want exclusive windows. The days of doing concurrent SVOD and linear pay-TV deals are all but gone.

However, whatever type of broadcaster you are, linear or nonlinear, there is one word that is a common theme for all, and that is “exclusivity.” All broadcasters are seeking some form of exclusivity that delivers a unique opportunity to their audience.

WS: Would you say that windowing is what takes up the most time when you are trying to place a property in a market?
PAYNE: Yes, I’d say that most of the negotiation comes around to which rights they are taking and whether they are taking rights to actually utilize them, to hold them back or to protect themselves. I think the rights they take and the exclusivity around those rights are a constant point of discussion!

WS: And I imagine everybody wants all rights.
PAYNE: Yes, and I always say all rights are available; you can have all rights, as long as you are prepared to pay for all rights.

WS: Besides rights, what else strikes you as really different from how the business was 10 or 15 years ago?
PAYNE: I would say that if there is one thing that defines the business, it’s that word, “exclusivity.” Broadcasters want something exclusive that they can promote and own and really get behind. That has become more and more common, while the willingness to share rights for the big programs is not there as it once was. This is combined with a broadcaster’s need to give their viewers the opportunity to watch a program via various devices either live or on a catch-up basis.