Night Train Media’s Herbert L. Kloiber

With the backing of private-equity firm Serafin, Herbert L. Kloiber established Night Train Media (NTM) in 2020 with a focus on co-funding and co-financing content for the global market. He quickly invested in Paul Heaney’s BossaNova Media to secure a foothold in the factual space, in Eccho Rights to bolster the company’s drama distribution capabilities and in respected U.K.-based non-scripted producer Curve Media. Kloiber talks to World Screen about the benefits of being present across all elements of the value chain in drama and docs and navigating the challenging economic climate today.

***Image***WS: What was the goal when you set up Night Train Media?
KLOIBER: I was previously running Tele München Group. The focus there was buying films and distributing them in German-speaking Europe. With the new company, my focus is almost exclusively international. The vast majority of what we do is English-language. I wanted to be independent of the German-speaking market; I’ve worked in it for so long, and I felt it had its limitations. I wanted to be in a broader, bigger market with Night Train and utilize the vast network of partners in the industry in a different way.

I launched NTM on February 20, 2020, during Berlinale. I had this whole plan of co-financing and developing English-language drama series and was in conversation with a few investors. Three weeks later, the pandemic hit, and all of these conversations were out the window. Nobody had the priority of launching a startup in Germany. It was terrible timing. But a few months later, I was fortunate to find a financial investor not in the entertainment space. Serafin Group is a long-term investor that mainly buys in the industrial space. I explained what I was trying to do, and they agreed it was an opportunistic move to get into entertainment—when it was in a difficult spot due to the pandemic. At the same time, you had all of these streamers expanding massively. I partnered up with Serafin and started building up Night Train in September 2020—I hired my head of development and ramped up the team and projects. The focus was on series that either producers would bring to us or that we would find through distributors that needed help with gap financing. During the pandemic, many players were a little budget constrained and hampered. We were able to come onto the marketplace with a well-capitalized company to be a flexible and reliable partner to everyone. We were saying, with our commitment, let’s greenlight this show anyway and go ahead and go into production. I think that, ultimately, the pandemic helped us more than it hurt us, as we were able to board projects more quickly that way.

WS: You launched mid-pandemic, and we’re back in a challenging time due to the economic climate. How are you navigating this landscape, given the uncertainty ahead?
KLOIBER: Our business model is well-suited to this change. We are financing shows, films or documentaries that, if commissioned by a big streamer, would cost them a lot of money, and they’re all rolling back budgets. We can get these things into production with smarter budgets using local subsidies and tax credits out of Europe mainly and then offer them to the marketplace as a co-pro or acquisition, probably at a more affordable rate and a faster path to production than through the commissioning route. Not everybody still needs to own rights for the world forever. In that sense, I think our model is well suited for the shift that’s going on.

WS: Given the shift, how important is private-equity backing right now?
KLOIBER: If you’re an independent boutique company, it is very important that you have reliable financing or capitalization available to you to be able to weather uncertain situations for a few years. It’s also the relationships and reputation you have with your banks. How well have you performed in the eyes of the banks with the projects you’ve embarked on? Were they profitable on average? How quickly is the investment monetized? It is helpful for us to have a partner like Serafin to allow us to continue investing and maybe take six months longer to recoup money from the marketplace because we don’t want to be forced to take a poor deal today. The good thing is that our private-equity investors aren’t the typical, “We need to build this and, in five years, sell it.” If you have that type of private-equity backing, I think this marketplace is challenging because you must constantly show growth every quarter. That can create adverse pressure and might push you into poor investments. Luckily, our investors are long-term oriented. They have never sold a single one of the companies that they own. They are in it for the long haul and have supported our expansion with three company acquisitions to date.

WS: What appealed to you about partnering with Paul Heaney and BossaNova?
KLOIBER: We felt it was a good way of de-risking the scripted business we’re in. The scripted business is the riskiest, the most volatile and ties up cash for the longest time. A factual distribution company like Paul’s is a faster-turning machine that brings some diversification to our scripted business. That was one reason. The other is that Paul has such an amazing reputation in the marketplace, which is well-deserved, and he’s built distribution companies successfully two or three times before. We felt that if there were anyone we would do this with, it was Paul. Everyone I’ve ever talked to has said, Oh my God, I love Paul; he’s the greatest. I’ve never experienced that about another person in this business before. We speak every week, but he knows what he’s doing and does his thing.

WS: And what about the investment in Eccho Rights?
KLOIBER: Eccho Rights is a much more strategic investment. We partnered with external distributors initially because we wanted to be a lean team and didn’t want to build up our own distribution business with big overheads. We didn’t have the product flow to sustain that. Eccho has built a huge business on the Turkish drama side over the last ten years. It’s very different from the markets we usually deal with selling English-language shows; it’s complementary. At the same time, they’ve started building their own English-language and Western drama development and co-pro slate with a similar approach to how we see that market opportunity. We felt it was a great fit to have a successful distributor that is a well-oiled and profitable machine but, at the same time, is looking in the same direction for growth in that Western space. That was the perfect fit and allowed us to vertically integrate into distribution. We will continue working with different distributors going forward on a project basis. If third parties continue bringing us great projects, we are happy to partner and split our risk with them, which makes everyone’s investment budget stretch a little further. But let’s say we develop something in-house—it is more likely that this will run through our distribution arm going forward.

WS: Are you looking at other M&A or partnership opportunities?
KLOIBER: We’ve now bought a factual distribution company, a scripted distribution company and a factual production company with Curve Media. We are looking more into the scripted production space. But it doesn’t mean we necessarily have to buy a company. It might mean we’re just going to work with great writers and producers, whether it’s on a project basis or as an overall strategic alliance. It’s always a case-by-case decision. We also like the talent management side of things in some European markets. Currently, we’re looking not only at English-language but also the Scandinavian market—Eccho Rights is based there—and we’re looking at the Turkish market. Ultimately, we need to secure great product for the bespoke avenue to market we have built.

WS: The global streamers seem to be scaling back their content spend. Given this landscape, are you seeing more flexibility on their part to do different kinds of deals? How are you positioning yourself as a content supplier to these services when they’re still trying to figure out their evolving strategies?
KLOIBER: They are becoming more flexible and pragmatic. We try to be nimble partners to all and always have bespoke relationships where we say, How can we help you with a particular project and the budget you can make available? What markets do you need that product in? Can we find ways of working with you in co-financing or co-producing that allow us to exploit some of that content elsewhere, where it might not be key for you in the first window? We are co-producing more and having more discussions between partners in various markets to bring them together for a specific project. It’s an easier conversation. It is a way for streamers, networks and platforms to freshen up their content while allowing their restricted budgets to extend across more new shows.

WS: So if you do a series of smaller deals, you can potentially make more money than if it was a global commission where you lose the rights to sell multiple windows?
KLOIBER: Exactly. The productions we’re doing always have broad commercial appeal and can travel. Our idea was never to develop something for the big streamers in mind and then submit it to them for commission, as many producers do. We always have distribution in mind, which is why we acquired BossaNova and Eccho Rights. We believe in the distribution and co-production model, bringing buyers and creatives together with a high probability of greenlighting a show this way.

WS: What are your priorities as you plot the company’s direction in the next year to two, given the uncertainty of the economic headwinds?
KLOIBER: We will continue to integrate the companies we have, specifically Eccho Rights. We’ll also see what synergies we can create between the companies naturally. We will grow our investments in great shows and films. This year we’re planning to co-produce two or three films. We are in production with several series. We will grow that content portfolio. I don’t think a major priority will be to find the next acquisition target in the next 6 to 12 months. We have a lot of work cut out for ourselves with what we have. Having said that, if there’s a fantastic opportunity, we will always look at it. So, it’s a little bit of consolidation, synergies and more productions.