Q&A: Content Media’s John Schmidt

PREMIUM: A deep catalogue and an acquisitions strategy that operates across the film, television and digital arenas have been key factors in the success of the recently rebranded Content Media Corporation, CEO John Schmidt tells World Screen.

WS: The company has been doing quite well. What has been driving its good performance?
SCHMIDT: We’ve had a good year, and it’s based on the incredible hard work of a great sales team. We are a company driven by sales—that’s our core competence—and Greg Phillips in television, Jamie Carmichael in film, and Jonathan Ford in digital all have superb teams. We work very hard with our catalogue, the new properties that we pick up, and the producers, to monetize every nook and cranny of the business and create as much revenue as possible. All three divisions are doing well although the primary profit driver is television. Film is less predictable but it’s very important that we are in that space, and digital is growing nicely with some very exciting future prospects that we are developing. But day in day out it’s those TV revenues and profits that drive our company more than anything else.

WS: Is there any type of content that is particularly in demand?
SCHMIDT: There are no rules, but we’ve always been strong in the television area of one-hour episodic dramas, going back to the early great Content Television [formerly known as Fireworks International] series. That is our lead focus. We are very happy with, for example, Thorne, which is from Sky in the U.K. David Morrissey stars, it’s beautifully scripted, and the execution, ten out of ten. It’s a detective story, a procedural. It adheres to some of the core rules of gaining your audience and keeping it, and having something that is commercial and saleable but with a great deal of style and a great deal of class. So if I wanted to point to something in this particular year, I’d say Thorne.

WS: You have been doing some interesting deals in the digital area, such as the one with Vuguru. There is a demand for that product, isn’t there?
SCHMIDT: There is. Jonathan Ford runs the day-to-day business in that area. He has established a leading position in the industry acquiring digital-based entertainment properties and selling them to multiplatform buyers around the world. We did a first series with Vuguru called The Booth and then expanded that into an output relationship. Now we’re in business with Alloy Entertainment, the producers of Gossip Girl and The Vampire Diaries, and we have a couple of digital series with them. Electric Farm and Generate are two other great companies in L.A. that are building their digital businesses, and we have partnered with them on specific titles.

WS: From your perspective, as CEO of a pure-play content company, is Wall Street more at ease with investing in content and media companies or is there still the fear that technology will decimate an industry the way the Internet impacted the music business?
SCHMIDT: I think the fear is still out there. I think that owning content and IP in a pure play company is something of a hedge against the disruption in delivery and distribution technologies. Good programming is going to find its home, but a weakening of the major network business model or any massive disruption in those kinds of channels trickles down mightily onto the content owners as well. That, coupled with the recession and the capital flight to hard assets commodities over the last couple of years has made the content business much more challenging. But I think one protection is that we do operate in feature films, in one-hour television drama and factual television, and in digital programming, so we’re not a company that focuses on only one particular niche in content.

Television movies over the last three or four years have been hit hard, that whole business has been changed very significantly. It’s not so much a technology change, it’s more a change in programming taste. Having a deep catalogue and an acquisitions strategy that operates across film, television and digital gives us some protection. But in general whether you’re Time Warner or a small company like us, the attitude of the market and the capital allocators is still very much in the air as to what the value of libraries is and how that is going to shake out. 

WS: And the impact of social media and online.
SCHMIDT: That’s just an intriguing, absolutely fascinating side of our business right now—the intersection of social media and programming. The fact that Netflix bought their first series—the 26-hour series House of Cards—they have been very active buying second windows, but moving aggressively into original programming like that is a bellwether moment. Hulu is looking at original programming, and YouTube has announced a new programming strategy with Google’s backing. It’s an intriguing moment, and the war of words and war of strategies between HBO and Netflix, for example, a lot of that is about, ‘We’re going to hold on to our model and we’re going to build it out. You, Netflix, are going to have to scratch and crawl, for every inch you get. We’re not going to be so amenable with our package of movies and TV shows the next time you come back.’

The Netflix deal is a great indicator of the disruption in the changing landscape. We do a lot of business on Hulu, just pure ad-supported business from our deep catalogue, which is fantastic for a company such as ours. It’s a little more disruptive for first-run network programs.

An important part of our digital strategy is a new business we just created, Spirit Digital Media, with Peter Cowley who joined us from Endemol. This is very much about the social network and virtual gaming and augmented reality side of the digital assets that go with a TV show or a film or any piece of original programming. We want to grow that and we believe that will be an increasingly important part of our business.

WS: What are your goals for the company in the next year?
SCHMIDT: Our goal, our bread and butter—is to sell, sell, sell! It’s in our bones. It’s really about continuing to acquire programming that the audience wants to connect with, whether it’s on their television at night, or on their iPad as they get on the bus, or on their mobile phone when they go to school. It’s about battling for great shows and great IP across all areas. A lot of producers we work with, for example the producers of Thorne in the U.K., are delighted that we are also a film company and that’s true on the digital side as well. It’s really pursuing the best properties we can in all three areas and continuing to sell as best we can to our traditional buyers as well as directly to consumers as new digital delivery models emerge.