NATPE Budapest Shines a Spotlight on Windowing Strategies in CEE

At a business session this afternoon at NATPE Budapest, executives from STUDIOCANAL, AXN, Antenna Group and 3Vision shared insights on the evolving strategies for exploiting existing and new windows across Central and Eastern Europe.

Jack Davison, managing consultant at the content consultancy firm 3Vision, said that over the last couple of years, CEE has become “much more of a first- and second-window market. Those are the two critical windows for the distributors that we work with. Where it’s getting more complicated is utilization in those windows. There are always deal elements that sales people have to struggle over—whether it be runs or terms, etc.—but now there are so many more. If you’re a content owner, there is an opportunity cost down the line” that could impact deals both in terms of an opportunity to do an SVOD sale or to sell into a particular region. He added, “Simply speaking, you have to be more specific about the windows if you’re selling, and if you’re buying, you have a lot more to think about.”

Katrina Neylon, the executive VP of sales and marketing at STUDIOCANAL, said that it comes down to getting “the best exposure in the first window. In terms of linear and the relationships that we have, it’s about finding the right home.”

Looking at holdbacks, “the premiere is really important,” Neylon said. She gave as an example The Last Panthers. “It was really important for us to have the premiere with RTS in Serbia. But then we managed to get a second window with Fox Networks Group in the Balkans, who were able to maximize on the marketing that RTS had done. We were able to do an event piece by airing it over the weekend, then having a festival [to market and promote the show] in the region, then having it on Fox in the Balkans.

“The premiere is where the value is,” she continued. “If you can have that on linear and maximize that marketing, you can then look at cable and pay TV and how you manage those windows.”

Neylon acknowledged that sometimes there is pushback about certain windows in the deal-making process. “If you have a show that someone really, really wants, you can find a way to work within that partnership to give them what they need and still have us maximize the exposure and revenues of our titles. You have to manage the number of runs and the number of repeats alongside the fact that there is going to be a further window, which might get a different audience. Is it a debate that we have on a regular basis? Yes, it is. Trying to please everyone is difficult, but we try our best at STUDIOCANAL to do that.”

Pete Smith, the managing director of Antenna Group, which has a footprint across Greece, Serbia and Montenegro, among other markets, said that he has yet to see a dramatic shift from free TV to online or digital. “So at this point in time, windows for us are presenting an opportunity and incremental revenue. There are more opportunities to monetize what we’re making, so we’re excited.”

Smith, too, has seen rights negotiations becoming tougher as digital, catch-up and the like are on the table. “It’s an interesting battleground at the moment,” he said. “It’s an issue when we’re determining if we should go with this [deal] or go with that one. We’ll [weigh out] the deals and where we get broader rights, we’ll tend to migrate in that direction.”

John Rossiter, the general manager for Central Europe at Sony Pictures Television, who launched AXN, chimed in that, “Our best-case scenario is that we can have rights all the way through the whole pipeline. We are trying to exploit many areas and many opportunities. We find that the move toward digital means that there’s a demand from the consumer for convenience, so if you can provide these rights and take away a hassle for that, it’s a huge win for us. When we talk to operators and are working with our own services, that’s vital.”

Smith noted that sports and movies are two areas where all rights are generally not up for grabs. “With the big studio movie deals, you don’t typically secure catch-up rights. Maybe I’m just being too much of a sissy,” he joked. “But those rights tend to be retained as the studio tries to keep its inventory fresh as best they can.”

While global streaming players like Netflix and Amazon have been building up their international businesses, the panelists largely agreed that these services haven’t had much of an impact on CEE—yet.

“The numbers for SVOD are about 10 percent in Western Europe, but in CEE it’s well below 1 percent,” said 3Vision’s Davison. “There’s a significant difference there, and there are a bunch of factors contributing to it. You could say that the younger viewers are turning to BitTorrent and other [file-sharing sites], and that the older ones are happy with linear TV. ShowMax is coming [to the region] and it’s half the price of Netflix, so let’s see whether affordability is a big part of the problem,” he said, adding that “Netflix is obviously priced wrong” since it’s a rather costly proposition for customers in many CEE markets.

Neylon pointed out that STUDIOCANAL’s production companies have done a number of commissions and co-production deals with Netflix already. “But in Central and Eastern Europe, local content is always going to be king,” she said. “And what Netflix offers is quite a different proposition. With the Amazons and Netflixs, we are doing more on the library side. A massive part of that is the loyalty to the linear channels and basic pay operators; you have to sustain those relationships—it’s really important for us.”

She also noted that some of the OTTs, Netflix among them, have been increasingly looking to ramp up their amount of European content. “STUDIOCANAL is high in European content, and on that basis maybe Netflix would like to get their hands on it. But if you take an example like The Last Panthers, we go territory-by-territory, and it has sold into 122 markets. Same for Midnight Sun; it’s in 90 territories—there’s a reason for that. It would have been very easy to just go out and do one deal, but again if you look back to the channels that we’re working with and the results and ratings they achieve, from the European side of things, we take a [territory-by-territory] strategy for each title and it’s worked for us.”

AXN’s Rossiter added that “local programming is something that [OTT] players can benefit from, in terms of getting subscribers to adapt to these services. It’s a combination of marketing, education, time and local programming that will get them and us into a critical-mass situation.”

Smith highlighted that in the region, “the local free-TV offering is superb. You get high-quality, local content, so free versus paying is pretty great. You get what you want on five channels.”

On the issue of piracy, Smith said that getting programming on air shortly after its U.S. premiere is imperative. “Distributors will work with you to get it on as close to the [original] market launch as possible.”

Neylon emphasized the increasing value of day-and-date launches. “A number of our shows have that cliff to come back to and you don’t want to ruin it. You want to be able to watch it in real time.”

She also pointed out how shorter-run series are shaking things up a bit in this regard. “With three- or four-parters, you can afford to [run them early over] two or three nights. In Southern Europe, they might do two episodes back to back. You still have the 22 episodes and 13 episodes, but at STUDIOCANAL we have 4, 6, 8, 10 episodes, depending on what the series is, and that’s made a difference. We will always speak to our producers [about the quickest timing for a release]. It used to take two weeks for an international version because of the music and various other things, but now we have to have the international version literally as soon as it’s gone out.”