Time to Share

Mansha Daswani checks in with several distributors about how best to craft a distribution strategy today.

Sharing is caring when it comes to the message content creators want to send to the youngest audiences. But in the behind-the-scenes deal-making to get that content made, however, many platforms and broadcasters today are still much more likely to say, “it’s all mine!”

Morgann Favennec, the executive VP of distribution at Xilam Animation, reports, “We’re finding that the buyers, whether at broadcasters or platforms, are not in a position to compromise to the extent they previously would. Given the competitive landscape, they want exclusivity and the premiere. This can be a little complicated as they don’t necessarily put the money in front of the offer that would compensate for the other sales you wouldn’t be able to make under those terms.”

“Everyone still wants more and more exclusivity,” agrees Raphaëlle Mathieu, the executive VP of Cyber Group Studios. “Free-to-air channels are less open to short holdbacks, and all deals are subject to strong negotiations.”

“We’re finding it’s becoming increasingly challenging to have several different partners around the same table, particularly when there’s a mix of pay-TV, free-TV and SVOD players,” Favennec adds. “Given there are so many possible windowing setups, it can be tricky to find a balance and, in some situations, we even get to a point where for renewals, channels are now looking for exclusivity and VOD rights, too. When it involves a brand that has been in the market for a long time, this can get a little tricky.”

For Monica Candiani, the executive VP of content sales at eOne Family Brands, the key is to be agile and follow broadcasters and platforms as they shift their strategies—and many are realizing the crucial role of YouTube and other ad-supported services, she says. “We seek to place our content on as many platforms as possible and so try to advocate for shorter exclusivity periods wherever we can and when it makes sense.”

“We have found that broadcasters and platforms are slowly becoming more receptive to non-exclusivity in the AVOD space,” reports Bianca Rodriguez, the head of sales at CAKE. “This might change as some major players grow bigger, and we will need to see how that plays out.”

The increased presence of AVOD and FAST channel operators in the kids’ space is ushering in the most significant shifts in windowing structures—and providing additional revenue opportunities.

“Windowing strategies have continued to change in the last year as kids move to VOD platforms, whether stand-alone or part of a suite of channels,” says Kate Sanagan, head of sales and distribution at Sinking Ship Entertainment. “This has meant we have seen AVOD/FAST take a bigger position alongside our traditional TV rights.”

“We’ve seen an evolution even over the past year among studios and broadcasters to partner to maximize a show’s exposure on as many platforms as possible, but especially on YouTube,” says Corey Caplan, senior director of international sales at Guru Studio. “With licensees and retailers asking for YouTube performance metrics, YouTube has become an essential window after—or even sometimes before—the first linear window starts.”

“Non-exclusive windows are growing, especially for AVOD and, to some extent, local SVOD,” adds Cyber Group’s Mathieu. “AVOD can be YouTube, OTT or FAST channels. Or a mix of all of this. But most of the time, if a series is fully available on a broadcaster or a streamer, only very few elements will be available on AVOD.”

Caplan says, “Linear broadcasters understand the power of YouTube and child-safe streaming platforms to build awareness and bring eyeballs back to their channels. These days, non-exclusive AVOD rights are critical to most broadcast agreements. As some broadcasters and streaming partners are invested in the merchandising performance as well, it adds an even stronger incentive to allow for content discoverability on free, ad-supported platforms like YouTube.”

Candiani says that eOne Family Brands has stepped up its activities with FAST services, referencing a pact with Pluto TV, Paramount’s ad-supported platform, for Transformers TV. “It features Transformers content 24 hours a day, seven days a week. In the first month, we had 10.5 million minutes streamed and have seen 16 percent growth in viewership month on month since. We’re so pleased to be able to further engage fans of this iconic brand, which has such an impressive library of content.”

It is indeed the bigger brands that are translating well to the ad-supported space, CAKE’s Rodriguez says. “We have found that good platform-agnostic content leads to greater windowing possibilities with broadcasters more open to sharing rights with VOD platforms. This is particularly the case for big brands such as Angry Birds, which we have successfully placed across pay TV, free TV, SVOD and AVOD worldwide, with platforms sharing windows on a non-exclusive basis.”

Xilam spotted the AVOD opportunity early, building a YouTube presence back in 2013, Favennec says, with a slate of channels built around its library of animation “that travels very well with no dubbing needed as they’re non-dialogue driven.”

With around 50 channels on YouTube, “it’s a very big business for us,” Favennec says. “However, since January 2020, when YouTube made changes to advertising, we’ve had to work harder to meet the same revenues. It will remain a key part of our distribution strategy, but we’ve since opened the door to more collaborations and partnerships with other AVOD platforms. Today we work with all the key AVOD players, including Rakuten, Tubi and Pluto, to name a few.”

The AVOD opportunity, while increasing, is still heavily concentrated in English-language markets, Mathieu adds. “The revenues generated are growing but are still very far from those generated by broadcasters or streamer sales.”

But that opportunity is significant with the right brands. “With our hit preschool series True and the Rainbow Kingdom, we are simultaneously on ad-supported OTT platforms and continuing to grow the show’s multi-language presence on YouTube—which this summer hit a billion views and is growing!” Caplan says. “In tandem with the advertising revenues from our OTT partners, our show’s YouTube presence is generating a consistent stream of monthly advertising revenue, and with the in-depth metrics from YouTube and Guru’s AVOD partners, we can bring on more licensing partners to bring True products to market.”

Mass exposure is key, Cyber Group’s Mathieu notes. “Kids will see it more and more, and it will support the brand, making it stronger and supporting its licensing potential. If you have strong multi-exposed content, you are more likely to go for additional seasons and to make it work.”

Essentially, factoring multiple platforms into your windowing strategy is key. And you do, in fact, need a plan to ensure you’re, as Mathieu puts it, “maximizing revenues and optimizing exposure.”

Candiani at eOne Family Brands puts it like this: “Our priority, always, is to find the right home for each of our shows—and not necessarily to maximize short-term revenues. And our approach is never one-size-fits-all; we pride ourselves on being nimble and able to design different partnerships with platforms that best suit each brand. We want to meet fans where they are. We want to be on the go-to platforms for kids. But we’re also highly selective and choose platforms that align with our values; where our characters and stories can be consumed in a safe and enlightening way.”

“It needs to be approached on a case-by-case basis and depending on several factors,” agrees Favennec at Xilam. “The definition of rights is changing all the time, but it’s all about adjusting and trying to get the best out of the situation—not necessarily in the short term, but in the medium and long term, whenever possible. It’s important to stay flexible and know when to make some compromises.”

It’s also about assessing the DNA of a brand, Favennec adds. “A rollout strategy depends on the history of the show. For example, a jewel of our catalog with an impressive legacy, such as Oggy and the Cockroaches, will have a particular treatment. We’ve produced a new series called Oggy and the Cockroaches Next Generation, a reboot of the iconic brand. When it comes to the distribution strategy for this new series, alongside France and Italy, where Oggy and the Cockroaches is loved and well-known, the next key territory we paid close attention to was India because the brand is also hugely popular there. Netflix came on board the series with a global proposal that we accepted. Still, we wanted to ensure that in these key territories—France, Flemish Belgium, Italy and India—we could secure the best visibility on terrestrial channels before or at the same time as Netflix’s launch (excluding India, where the series debuts this fall and a few months after Netflix). These are the kinds of things we’re very careful about. Overall, our rollout strategy depends on how the series sits within the wider DNA of our company, the potential of the licensing and then the overall potential territory by territory. Those are the three elements we first take into account.”

Rodriguez at CAKE is of a similar view when it comes to devising distribution plans for key shows. “Firstly, you need to consider the nature and aim of the show,” she notes. “The strategy will be different if it is a commercial show aimed at capturing eyeballs, an educational show perhaps more appealing to public channels or a niche show aimed at a particular audience or platform. Secondly, you need to take into account excluded territories and rights. If some key territories are no longer available, the show may have less appeal for certain global channels, so we might look at creating territory- or region-specific strategies. With regard to rights, if the show is a YouTube or Netflix original, the strategy would be different from a show that has not aired previously. And lastly, it is important to consider whether the show is fully financed. If part of the financing is still required, we will first approach partners who can fill this gap and plan our strategy accordingly.”

Sanagan at Sinking Ship relies on similar criteria. “The factors to be considered are age demo, animation or live action, and specific content factors,” she says. “The financing determines the distribution strategy to a large extent given that now we often work with worldwide streamers for large footprints or globally.”

Caplan says that Guru Studio operates on a “content-first mindset” as it determines the best route to market on an IP. “Before we take on any new project, it must first have the right ingredients to capture the hearts and minds of young viewers. We always try to maximize the awareness of every show we produce and represent by ensuring our distribution strategy includes a detailed YouTube content release schedule, AVOD windowing strategy and, of course, partnering with the right local broadcaster who will get behind and support the show.”

As for how the ever-shifting platforms landscape is altering funding models, CAKE’s Rodriguez observes, “Historically, we relied on global pay-TV and free-TV channels and lately, big SVOD and AVOD platforms to help complete the financing of a show. Today, there are increasingly more options, and if you can secure financing from several platforms that can either commission or prebuy, their individual investment tends to be lower. The risk is spread across several partners, which can be a winning scenario.”

Guru’s Caplan notes, “We are seeing an industry that is growing increasingly risk-averse when it comes to funding, especially as traditional linear broadcasters continue to compete for viewers and exclusive rights, and as SVODs fight just as hard against high churn rates. Companies are starting to fund original IP using innovative and sometimes even unorthodox forms of financing, like enlisting independent equity investors to fill sizable gaps. It’s critical for these models to work that IP holders exploit as many rights, in as many regions as possible, to allow investors to recoup their investment.”

Distributors are also keeping a close eye on AVOD investments in originals as that sector matures beyond the largely library, non-exclusive space it operates in now.

“With the ever-evolving world of AVODs and now FAST aggregators like major connected-TV manufacturers Samsung and Sony, we will begin to see more competition in the ad-supported space,” Caplan says. “Hopefully, this will lead to increased funding for original AVOD-first content and an increasingly high bar for IP owners to place their series on ad-supported platforms.”

CAKE arrived at MIPCOM with a YouTube original, Super Sema, executive produced by Oscar-winning actress Lupita Nyong’o. “While the series is performing well on YouTube, we feel it will also appeal to broadcasters and SVOD platforms,” Rodriguez says. “The content is original—the world’s first-to-launch African animated kids’ superhero franchise—and has a strong creative team behind it.”

With the emergence of more AVOD-backed shows, Rodriguez expects that content will soon make its way to other services, noting, “For platform-agnostic content, windowing strategies will certainly become varied and more complex.”