Exclusive Interview: eOne’s Darren Throop

October 22, 2012 World Screen
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PREMIUM: Darren Throop, the president and CEO of Entertainment One (eOne), shares with World Screen his views on the film industry and the rapidly changing digital landscape.

WS: A few years ago, eOne made several acquisitions. Are you still looking to make those opportunistically or has the company reached an adequate size for a mini-major?
THROOP: We are always looking for strategic acquisition opportunities. We’ve been pretty consistent from a strategic standpoint for a number of years. We do like our multi-territory distribution infrastructure, and that means having our own people on the ground in different territories. Last year, we acquired the Hopscotch business in Australia, which has turned out very, very well. We’re always working to build and broaden partnerships in both developing and established markets. So you will see us continue to be active on the acquisitions front as well as in organic growth.

 
WS: Entertainment One has posted some very good financial results, despite the difficult economy in many territories. What has been fueling this good performance?
THROOP: A number of things. Our various divisions have been performing very well. We had an excellent year last year with our television programming. We had a number of season two, season three and even season four [commissions] for Rookie Blue and Call Me Fitz that are driving our TV numbers.
 
On the film side we released 152 films theatrically last year, some very small, some very big, but overall we increased our performance in the film business and doubled our digital revenue. And, finally, there is our family division, led by Peppa Pig and other key brands that are doing quite well internationally. We’ve put Peppa on top networks around the globe, and it’s remarkable how quickly it becomes a favorite among children in those markets. That sets us up to launch successful licensing and merchandising campaigns. If you look at each one of our core pillars of business, we’ve seen good continued momentum in each of them. On top of that, of course, we invest heavily in content, so we do expect growth.
 
WS: The company has made some significant inroads into the U.S. market. Why were they important and what further expansion do you see in the American market?
THROOP: In August of 2011 we announced that we were expanding in North America and increasing our focus and commitment to the theatrical business in the U.S. We think that if we are a little more active in the theatrical business we can acquire genre-type films, independent films and feature documentaries that will give our ancillary revenues, the other windows past theatrical, a little more exposure. We’re aiming to do 12 to 15 theatrical films a year in the U.S., but again, we’re really focused on upscale art house, independent genre films and documentaries, etcetera.
 
We continue to build on our worldwide strategy to attract and secure great titles for all of our territories, including the U.S. We’ve got the infrastructure and we certainly have the management expertise to do so.
 
It’s all about finding and exploiting premium content, and that would come with new partnerships with producers, filmmakers and distributors in the U.S., the U.K., in Europe and worldwide. We also announced in November 2011 that we expanded our international film business in Europe and in the U.K. Both initiatives provide us the opportunity to partner with talented producers at a little higher level and offer them our sales services and our infrastructure. We will acquire rights for territories where we have our own businesses and then we will use our international sales group to sell off those rights to local distributors where we don’t have infrastructure.
 
WS: What are the main issues impacting the independent film industry?
THROOP: It’s a highly competitive field both for funding and for viewers. There are so many entertainment options available to consumers; the competition for viewers’ eyeballs is getting fiercer as technology continues to offer new delivery platforms. There is also so much competition for people’s disposable time—from games to music to film to television. It’s driven by access; the access is getting so fluid and their choices are so many that there are just limited amounts of time consumers have to find the independent movie. From a funding standpoint, the equity investors are not as prolific as they have been in the past. There is not as much disposable income or investment and it’s still a very expensive medium. To produce a feature film is not like recording a music album. Films are multi-million-dollar productions, for the most part, and you can get them done for less than that, but you risk commercial viability. That is another big issue that independent producers continue to face.
 
WS: In general, the cost of marketing feature films can be huge. Has eOne found some cost-effective ways of marketing its films?
THROOP: We have found creative ways to market films, including social media and developing sponsorships and partnerships with local, global and national brands to drive awareness of the film itself. Certainly one of the strategic benefits of the multi-territory platform that we have is sharing resources—partnering with our own divisions. So we get efficiencies in the creation of trailers, in TV campaign art, etcetera. From a publicity standpoint, exclusive previews and content have certainly been helpful in different territories and building their awareness before the film actually hits the market.
 
WS: And is social media also helping to get the word out in a different way?
THROOP: Absolutely. Social media is where our customers, the fans of the film, are the ones who are driving the awareness of the films. Our U.S. team recently [collaborated] with a web platform that enables moviegoers to choose the films that play in their local theaters. I think we’ll see more and more of this.
 
WS: Social media didn’t even exist a few years ago and now it has added a whole new dimension to the business.
THROOP: It really has. It truly allows us to get closer to the consumer and inform our audiences. You sit on any bus, train or airplane and it’s now easy to be in touch with what is going on in the world. These are very, very good things for content.
 
WS: From your perspective, it seems the Hollywood majors have been more reluctant to embrace digital platforms than independents.
THROOP: I think you are right. I think there are specific economic reasons for that. Monetizing our new commercial film and TV titles online has been quite successful. But clearing rights, investing in coding and delivering older titles can make it cost-prohibitive for companies that have big libraries. So if you have a very deep, old library of titles that may not get watched or acquired that many times, you have to make a commercial decision on whether or not you are going to invest in coding and uploading for digital delivery, because the rationale has to be that enough people will watch to at least offset the cost. That is a reality that the major studios that have the deepest libraries are faced with. We had 152 new theatrical releases last year, and we are very proactive and active [in insuring that] those releases all go to digital platforms.
 
WS: For content in general, there is so much discussion about over-the-top services, like Netflix and LOVEFiLM, and whether or not they are a friend or a foe to broadcast and cable channels. But from a distribution point of view, I imagine they open up a new world to you.
THROOP: As a distributor, even as a content producer, we welcome new entrants to the marketplace: new platforms and windows. So for us it’s about, How do we get our content and our producing partners’ content into the hands of consumers? Competition among buyers of that content is good for the producers, it’s good for the distributors and, quite frankly, it’s good for consumers. We are quite happy with new distribution platforms.
 
WS: Do you have teenage children? Have you seen how they multitask with multiple screens?
THROOP: I have two daughters, 15 and 16, and they are armed and dangerous with every kind of tablet and electronic device you can think of!
 
WS: We have to keep an eye on our teenage kids! They are the focus group we need to watch carefully to see where the business is headed.
THROOP: It’s really absolutely true. You can learn so much from what they are doing. They’re watching Rookie Blue on the TV screen, they have a handheld in one hand and a tablet in the other. They are texting and talking and watching; it’s multitasking on a whole new level!