TV Kids Summer Festival Spotlights Boutique Distributor Strategies

Day three of the TV Kids Summer Festival kicked off with a superpanel on boutique providers of kids’ and family fare, delivering insights from Dandelooo’s Emmanuèle Pétry, Serious Kids’ Genevieve Dexter, MIAM! animation’s Hanna Mouchez and Tulipop Studios’ Helga Árnadóttir.

The wide-ranging conversation, which can be viewed in its entirety here, explored how the panelists are navigating their companies through the sector’s challenges and highlighted the benefits of being boutique and independent in the current climate.

Increased co-pro activity has been one successful strategy at MIAM!, said Mouchez, the company’s founder and CEO. When she launched the company, her first project was Edmond and Lucy, made at a time when “it was quite feasible to gather the 20 to 25 percent missing in a financing plan. You would get that on presales. It was challenging, but it was completely doable. Now, five years later, I’m financing season two, [and] it’s much more challenging to get that missing 20 to 25 percent. So, we’re doing a co-production. Maybe it seems more challenging, but I’m finding that it’s quite nourishing. We did our first co-production on The Tinies, and I realized that welcoming Belgian and Flemish writers and storyboarders helped us achieve a show that is not completely French-centered. So, starting from something that could appear like a challenge, at the end of the journey, I’m happy to do those co-productions because it’s good for the IP. It’s good for international sales because our shows are less French-centered.”

Dexter, founder and CEO of Serious Kids, addressed the challenges of putting up minimum guarantees against distribution rights today. “It’s very difficult to predict what’s going to work and when. We’re trying to do more hybrid deals in terms of distribution where we’re working with producers to jointly raise co-production funding. When [you] know where [you] are—the people that you can presell to you can count on two hands—then you can regroup and say, Let’s convert that presale into a part-MG and part-contribution to the budget and see where we can assume risk and where we would rather that money go directly to the production, and then we are taking an EP fee, as it were. Rather than having a straight distribution deal or a co-production deal, we try to go out together to investigate the market before we decide how to split those revenues and how they can be used best for the production.”

The industry needs producer creativity said Árnadóttir, CEO and co-founder of Tulipop Studios, which was founded to scale the Tulipop IP. The Tulipop team has been working on “finding investors that believe in our long-term strategy and are willing to invest in the company and in the IP, both angel investors and VC funds. Then it’s setting up productions in other countries as well. We are in Iceland, where we have a tax rebate system. We’ve also established a production company in the U.K.; we’re doing part of our productions in Scotland, benefiting from the U.K. environment and tax rebates as well. It’s a challenging puzzle.”

“We have to consider things on a longer term,” added Pétry, producer and partner at Dandelooo. “Some distributors think it’s a hit and run, grabbing over one year all the big fees and going to the next IP and making another big hit. We’ve never done that, but even more now, it’s looking under each stone and getting some revenue. Usually broadcasters have spent for this year and the next year and even the next year, so it’s being patient and persevering. It’s being careful about how you make things in a beautiful way and believing in your property for the generations to come.”

Engaging audiences between seasons is also crucial, Mouchez said, referencing MIAM!’s own work in real-time 3D animation. “We’re using real time to reuse our premium assets that we’ve produced and budgeted in one season and trying to produce additional content,” including podcasts and video games. “You’re reducing the global carbon footprint of your IP, and at the same time, you’re boosting it. All this additional content, we are also able to sell internationally to make the link between season one and season two.”

Dexter agreed with Mouchez’s point about the importance of content between seasons, highlighting Serious Kids’ experience on The Unreal, part of a growing live-action slate at the company, given the saturation of the animation market. “Season one is just finished but a second season is going to be commissioned, so we’re going to wait and sell season one and season two at the same time. With live action, it’s much faster, so that’s much easier to achieve.”

Árnadóttir pointed to the benefits of “being boutique—we can be more agile in this rapidly changing, challenging industry. Being independent and being able to adapt to what’s going on can help. Being small makes it possible for you to be a bit more patient. You don’t have a huge army of animators that you need to keep working. That’s a benefit to the boutique model in the industry as it stands.”

I asked the panelists about how they are staying ahead of all the rapid changes in the business.

Dexter said Serious Kids is investing in dubs, “because increasingly the barrier to getting sales is not having enough language dubs and the broadcasters are increasingly unwilling to pay for that. In some cases, we’ve been working with the dubbing companies to assist us in cash flowing those dubs, because otherwise, if you don’t have something ready, it’s not going to sell to quite a lot of the platforms. It’s only the public broadcasters who are prepared to fund the dubs and then give you access for 50 percent. And I think that model is changing, and that’s going to be key.”

Árnadóttir said Tulipop Studios is building an L&M plan for the brand. “There’s a lot of risk aversion. An interesting angle is that we are seeing production companies bring their own products to markets. That’s something we have done. It’s an example of how producers can prove the concept of their IPs in some way and even find financing at the same time.”

Mouchez agreed, discussing MIAM!’s production of video games for some of its shows. “It’s a way to seek a new audience and at the same time create a link between audiences and give tools to our broadcasting partners to engage even more with the audience.” It’s been a similar experience with podcasts, she said. “Our broadcasting partners are trying to try to keep the audience. That’s a way to face the situation. Being proactive is super important today and to have that agility in terms of creativity, but also in terms financing.”

As for determining how many of those extensions you can pull off, it’s also a question of resources, Árnadóttir noted. “You can do everything from the beginning, but very few companies have the resources to do that. We have tried to figure out for our IP what is the most important thing at each point in time, where is our audience and where do we want to connect with them, and take it from there.”

Dexter is looking outside of the kids’ industry “in order to fire new ideas and meet new people. We’ve got to be looking for equity finance. When you’re building a budget for a show, you’ve got to have a marketing budget because you can’t rely on the fragmented audience of your commissioning broadcaster to market your show. Then, you’ve got to have the budget for all of these other elements that we’re talking about. Private equity has got to be the way forward to allow you to build a business in an SPV around a property.”

Pétry at Dandelooo highlighted the importance of staying upbeat about the business, despite the onslaught of troubling headlines. “I want to be excited and enthusiastic about life in general and meeting people. Enthusiasm brings enthusiasm. I’m trying to not listen to the sad stories, the catastrophes, companies going under—that’s also contagious, and I don’t want that to happen, so I’m trying to keep the bad news away and just keep this little fire inside.”

As the crisis set in, Mouchez said she was worried MIAM! wouldn’t survive, given the company’s youth and size. “I came to realize it’s a strength. I don’t know everything. I don’t know all the risks. I’m not seeing everything that could happen from a bad point of view. We’re just doing things; nothing is forbidden. Have open eyes and never forbid yourself from something.”

Árnadóttir added, “There’s an increased discussion that it matters that people are creating quality content for kids. We want kids to be watching quality content with positive messages. There’s an opportunity to get more people investing in this industry and in quality kids’ entertainment because people want to invest in things that have a positive impact on the world and future generations. There is an opportunity to create, hopefully, a bigger investment space around kids’ entertainment with equity investment.”

As for making decisions to invest in a property, it is a mix of both gut instinct and hard facts. “You know when you’ve seen a good property when you look at it and think, I can’t believe nobody else has done this before,” Dexter said. “When it’s so simple and so clear; it’s a concept that’s easy to understand and fulfills an emotional need for a child or a family. All of the successful shows fulfill a very key basic emotional need, if they’re not based on a famous book or stage show. That’s what I’m always looking for.”

“Data is always important, but if you want to create something that can stand out, it needs to be authentic,” Árnadóttir added. “Data is helpful and is readily accessible through YouTube and Instagram and all those measurement tools, but that describes the past. In this ever-changing industry, the gut is what really matters.”

Data is key from a sales perspective, Dexter noted. “If I’m selling to Amazon or Netflix, they want the data pack, which they’ll read before they read the creative pack. How many territories is it in? What are the ratings? How many books has it sold? They’re looking for things that are world famous that they can then put on their platform, and they will be recognizable in multiple territories.”

“Everyone wants some proof that IP is performing in one way or another, be it books or be it YouTube or broadcaster sales, it’s especially important to be able to show data like that,” agreed Árnadóttir.

“It’s very difficult to attract private equity if you’re just saying, This is a new preschool show, I believe that it satisfies a deep emotional need in people to be happy. That’s not enough for private equity. You’ve got to say, Well, i’ve made some shorts, which are really knocking [it[ out [of] the park on YouTube, we’ve published a couple of books, we’ve done some research and the kids want hats that look like the characters so we made these two brands and these have sold more than those sold, so we’re going to make more of those. In that case, people either have some money to put in themselves to start off with and then the private equity [holders] say, If you’ve mortgaged your house for £100,000, you must believe in this property. They want shared risk. That’s a different model that I think we’ll have to get into much more.”