eOne’s Stuart Baxter on Plans for Growth

NEW YORK: Stuart Baxter, the president of Entertainment One Television International, talks about the programming that has emerged from deals with AMC Networks and El Rey Network in the U.S. and his plans for growth in this ever-changing business.

WS: Tell us about eOne’s relationships with AMC and El Rey networks.
BAXTER: eOne is the co-producing, co-financing and distribution partner for AMC Networks and El Rey in which we provide a significant part of the financial muscle and distribution to the shows they develop. AMC is a progressive, growing network that has turned into a drama powerhouse built on hit series like Breaking Bad and Mad Men. The idea of partnering with them to create more compelling, critically acclaimed shows, and to give eOne that edginess AMC has, is a huge advantage. El Rey was a new network starting up, owned by Robert Rodriguez in partnership with Univision. Robert’s vision for El Rey is to target the growing middle-class emerging markets in the U.S., with programming that is very much in the vein of his films and work he has done before, i.e. male-skewing, edgy, dramatic, high-quality, high-budget productions. In order to realize this vision, Robert was looking for a financial and distribution partner who could help cover the expense of producing those shows and bring them to market—we bring both to the table.

WS: What are some of the scripted shows you are offering the international market?
BAXTER: Halt and Catch Fire is a depiction of the American dream in the 1980s encapsulating the rise of the PC era during which a renegade trio risk it all to build a computer that could change the future. It isn’t a techy geeky show about the evolution of the technology space, but rather a serialized drama about quirky characters that chose to disrupt the technology industry. The homage to the period it represents is fabulous. The real drama of the relationships and the back-stories of these eccentric individuals make for great viewing. 
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From executive producer Robert Rodriguez and Roberto Orci (Sleepy Hollow, Fringe, Star Trek and Transformers franchises), we have an exciting action-adventure series called Matador. The series follows Tony “Matador” Bravo, a DEA agent from East Los Angeles who has been recruited by the CIA to investigate the LA Riot soccer team by going undercover as one of their players. It's James Bond in a soccer world featuring a young and beautiful cast with bright colors and tones.

We're also launching an epic six-part miniseries called The Book of Negroes, which has been selected as MIPCOM’s Opening Night Gala Screening. Featuring an amazing award-winning cast including Cuba Gooding Jr., Lou Gossett Jr. and Aunjanue Ellis, The Book of Negroes is a true story which follows the journey of a young girl who gets kidnapped in West Africa, taken as a slave to the plantations in South Carolina, and her struggle of growing up in that environment and suppression that went with it. It’s absolutely stunning; with a filmic tone and quality to it. The miniseries will be available for buyers around the same time that many broadcasters will have 12 Years A Slave, so it will be a great companion piece. â€¨

WS: eOne has focused on four strands of factual programming—Eat, Crime, Entertain and Discover—how have they been received by buyers in the U.S. and elsewhere?
BAXTER: If you just have a broad catalogue, it’s very difficult to market yourself as having everything for everybody. The classifications really help in clarifying what we specialize in selling internationally, which in turn attracts potential producing partners and buyers. We can say to buyers and to producers who we co-produce with or want to be in business with that if you have a show in that particular strand, then we are specifically prepared to partner, co-produce, fund and distribute shows in those genres. â€¨

WS: Tell us about the deal with Viewster.
BAXTER: It’s very, very early days. The deal with Viewster is a content partnership where eOne is providing programming to the VOD service. We see this more as a relationship-building and learning exercise about the online community and how it consumes content: when and how much are they viewing at a time, how regularly do they come back, how do they search and navigate? Learning and understanding that type of viewing in today's world is extremely valuable. â€¨

WS: What percentage of your revenues are coming from digital platforms and what percentage is from “traditional” broadcast, cable and satellite?
BAXTER: I’ve been in this industry for 20-plus years and I can remember when free TV was 70 percent of a company's budget, pay TV was 25 percent and digital was 1 and 2 percent. Today, if you put the over-the-top operators, the SVOD operators, HBO GO and Sky Now all in the digital pie, frankly, digital in many markets is 20-plus percent. It has grown many multiples, and by the way, every year it continues that growth. The truth is, some of that is substitutional because if you look at various genres of content, in movies, for example, the free-TV guys are scheduling fewer and fewer films. Those movies now either appear in the pay-TV premium services like Sky Movies, or they appear on Netflix or Amazon. The good news is, so far, all of these supposedly disruptive evolutions have actually grown the cake. Is the cake different? Yes, very different. 
 

WS: In what areas do you see the greatest potential for growth?

BAXTER: Our industry is cyclical. Five or ten years ago, light-entertainment shows like Who Wants to Be a Millionaire?, Big Brother, Idols, The X Factor, ruled the airwaves. Today, the money and the audiences are following the big dramas. At eOne, we are very conscious that we need to have a breadth of content and specifically what we are focusing on is higher quality. That’s what really moves the needle; that’s what attracts projects, talent and producers so that we have some of the best content available. Our areas of growth are first, a move into more quality content; then a move into international. We will have an enhanced focus on the international market, where we will spend a lot more money over the next two or three years building production relationships, producer deals and first-look deals in Europe. We are going to bring into the fold more in-house people with real production credibility and experience. We are also going to move into Europe establishing distribution and production partnerships around the major countries because when you suddenly see shows like The Killing coming out of Scandinavia, formats coming out of Holland, or The Farm coming out of Sweden, no one country has all the best ideas. The best way to find those opportunities is by having an aggressive reach within all the major television markets. â€¨

WS: What are the major issues impacting the distribution business right now? 

BAXTER: Piracy is an issue; it’s always been an issue, however, it is increasing online, becoming much more prevalent in some countries than others. For example, if you go to Spain, or Central Europe, or Latin America or parts of Asia, it’s very prevalent. Piracy has to be treated, frankly, in the same way as smoking or drinking and driving—until it is socially taboo, people will continue to do it. I was in Spain recently and was amazed when a buyer turned to me and said he had seen all ten episodes of Halt and Catch Fire and had loved it. I asked, “Well, how did you see it?” “Oh, I got it online. I pirated it.” I thought, you shouldn’t be willing to tell me that! It’s socially acceptable in that environment and we’ve got quite a challenge to persuade people that IP is valuable and our whole existence in the industry depends on protecting that IP.

Another challenge is that production budgets are going up. There is a chase for the best talent. Companies are being bought, whether TV or film production companies, and the costs are accelerating through the roof. Is that a good thing? I think it’s a function that there is more money coming into the industry and there are fewer people who have amazing track records, so their prices are going up.

We all have to find a balance. When you look at some of the production companies that were bought by Endemol ten years ago, or by Shine, all3media, FremantleMedia or by the studios in the last few years, many were bought at very high multiples. Prices have been high for a while and companies have done well to sell at the levels achieved but in hindsight there are some questions as to the real value going forwards. So that is something the industry is going to have to come to grips with—is buying what’s been produced in the past the best way, or is it better paying for what they will produce?