CAKE’s Ed Galton

Ed Galton, CAKE’s managing director and chief commercial officer, tells TV Kids about how a show’s financing structure will largely dictate its distribution rollout plan and weighs in on how CAKE is navigating the shifting windowing landscape.

From the Angry Birds series to global megahits like Total Dramarama, CAKE has established itself as a leading indie in the kids’ and family entertainment space. The outfit operates under various models, including taking on finished product and boarding titles early to assist producers in crafting financing plans.

TV KIDS: How have your windowing strategies evolved over the last year?
GALTON: The majority of platforms launching in the AVOD space are much more open to window sharing and non-exclusive deals than the traditional platforms we work with. They don’t care as much about exclusivity, and to be honest, in the kids’ space, exclusivity matters less. But those deals are not where we’re getting the lion’s share of our revenues. We’re still making most of our money from SVOD platforms and traditional linear channels. While we will always push for non-exclusivity and a collapsing of as many windows as possible, the truth is that the traditional platforms have become more reticent about sharing than in the past. They don’t want to give any window of opportunity to work with the SVOD players, and preserving AVOD rights has become a priority given that linear channels will ultimately migrate into that space.

TV KIDS: What factors do you consider when developing a distribution strategy on any particular show?
GALTON: First of all, what kind of show it is will obviously dictate who you’re going to be talking to. With a serialized show and a story arc that you have to follow, you are limited in who you can approach. The linear broadcasters are looking for snackable series that can be aired one episode at a time in any order, while VOD platforms look at viewing patterns differently. Secondly, the level of ambition and size of the show is where the economics come into play. The traditional method of how we finance shows has evolved. Some of the series we’re working on are more ambitious with higher budgets. Certain platforms can afford to commit to that additional amount of money and have those shows made.

With an established brand, you need to consider your licensing and merchandising strategy and the level of exposure available on platforms versus linear channels. Does it make more sense to be on the free-TV channels of the world, or is it more beneficial to have as many non-exclusive deals as you can so you can be visible on every platform? In addition, one needs to consider that if you are being held to exclusivity by a platform that you cannot extract data from, it becomes very challenging when selling in your licensing program.

On the Angry Birds shorts, our strategy from the very beginning was non-exclusive deals with all of our partners, and we found that the bigger the brand, the less exclusivity was an issue. In contrast, with a new show airing for the first time, partners demand exclusivity as they want the show to be associated with their platform. There is a bit of an irony there; as long as it gets eyeballs and ratings, that’s what matters.

TV KIDS: So you have to have your windowing strategy mapped out at the financing stage to ensure you’re getting that ongoing return on investment?
GALTON: For sure, it comes into play from the very beginning. You have to understand, if I do this deal with this channel, how is that going to impact the rest of the sales moving forward? You have to make a choice and you have to be aware of the path you’ve laid or the roadblocks you’ve put in front of you by choosing those partners.

TV KIDS: How has your distribution business fared this year, amid COVID-19 lockdowns?
GALTON: Money was allocated, people had budgets and there was still a need to spend. At the very beginning of lockdown, we saw an urgent demand for content that was already versioned and immediately available, and broadcasters were asking for educational content, given that kids were going to be off school for the next six months.

We are more concerned about what next year will bring. At this point, we’re still doing deals, and while we’ve had some clients say they’re waiting or they’re on hold, we’re in a consumption-based business and the need for content on platforms is not going to stop because of COVID-19. The advertising market is going to be negatively impacted and this will have an adverse effect on future programming budgets, but viewing patterns across all platforms have gone up. That’s only good for us, and whether that will end is still to be determined.

TV KIDS: Anything else going on at CAKE you’d like to mention?
GALTON: The good news for the animation business is that we’ve been less affected by COVID-19 than most, and fortunately, production has continued. At CAKE, we are finishing work on Mush-Mush & the Mushables and production is underway on the first new Angry Birds long-form series Angry Birds: Summer Madness for Netflix and the Netflix original Mama K’s Team 4. So far, the kids’ sector has come out looking pretty good for producers and distributors of animated content and that’s a relief in every sense.