Game Change

Mansha Daswani hears from leading distributors about how early-stage investments, smart windowing strategies and a keen focus on market intel are crucial to succeeding in the factual distribution business today.  

From the sector’s biggest players to boutique independents, changes are afoot in the business of selling factual content. Whether restructuring business models, altering rollout plans, launching FAST channels or pioneering new narrative techniques, companies are aware that the landscape is changing quickly—and evolution can’t stop, pandemic or not.

Of note, smack in the middle of Covid-19, longtime factual content executive Paul Heaney decided to embark on a brand-new startup. Having built TCB Media Rights into a thriving outfit that could feed the needs of numerous outlets—from straight library acquisitions to co-pros, development partnerships and more—Heaney knew all too well the demanding and rapidly evolving nature of the business. Following the downfall of Kew Media Group and TCB’s subsequent sale to Beyond International, Heaney opted to build his new venture, BossaNova—which recently received an investment from Herbert L. Kloiber’s Night Train Media—as one that was “leaner and meaner” than his last one.

“You learned during parts of Covid that you can make these businesses work with fewer people,” Heaney observes. “We had a lot of people at TCB. It was lean, but now you have to look at it again and say, this can be leaner still. It focuses you on what partners to choose. Eight years ago, I was obsessed with picking up hours and hours of content because I felt that was the right thing to do. Now, I’ve turned away so much because I’m not interested in that strategy as much. What’s the point if it slows you down? I want to bring content in that is going to do a job and has an appeal.”

Heaney is not the only executive course-correcting amid a rapidly transforming world. Bo Stehmeier, who returned to Off the Fence at the start of this year to become CEO, put it like this when discussing the new strategy he has implemented at the company: “The macro system has changed massively. It’s unprecedented times. As we navigate new waters, we have to prepare for something—and we don’t know what it looks like or what it will be like.”

Among the most significant shifts has been in simply securing access to a steady supply of quality content. Driven by vertical integration and streamers retaining global rights, just getting ahold of shows to sell can be a considerable challenge. “The old days of meeting a Canadian producer with hundreds of hours of completed shows in the catalog are gone,” Stehmeier told TV Real recently. And that means coming on board projects as early as possible.

“We sometimes even encourage producers to come up with ideas and then we can discuss them,” reports Ralf Rückauer, VP ZDFE.unscripted at ZDF Enterprises. “Sometimes we do development funding so we can help the producer create a sizzle to present to potential partners. We do that two or three times a year. In addition, we do self-commissioning. We have Great Inventions, for example, a 35-part series we completely financed on our own, without any partners attached. We really do early-stage commitments.”

ZDF Enterprises has another preeminent factual distributor in its family, Off the Fence, which it took control of in 2019. “Most people say merger and think 50 percent of the staff will get fired,” Rückauer quips. “We had plans to merge the teams, specifically in distribution, but then Ellen Windemuth [the founder of Off the Fence] and I sat down and said, ‘Maybe we should keep them separate. It’s a different culture, different personnel, different structures, different partners.’ So we chose not to. ZDF Enterprises owns the company, and we have a lot of exchanges about the market. Sometimes we get approached by a production company and they offer us a program, and I’ll say it’s not for my catalog, but it might be something for Off the Fence. And vice versa. Sometimes we do deals together. Off the Fence has strengths in certain territories. We’re not competing. It’s very comfortable.”

Like ZDF Enterprises, Off the Fence takes a flexible approach to securing content to license. “We can come on board at any stage, from early development to finished programs,” says Stefanie Fischer, the company’s managing director of sales. “What sets us apart is that we are a distributor with our own production arm, which means we can bring in our expertise at any point. We are acquiring a lot more content than we produce, and our production knowledge is always an advantage when working with third-party producers, as we can share feedback. While we don’t fund whole productions, we do offer advances, and we can help bring in partners at an early stage to raise the financing for a production.”

ARTE Distribution, similarly, looks to engage with producers early on in the process, “sometimes the project is not even sold to the French broadcaster” ARTE yet, says Florence Sala, head of international distribution. “We discuss the angle with them and sometimes advise them on the international version.”

Albatross World Sales has established a network of producers it partners with frequently, according to Anne Olzmann, the company’s managing director. “Our philosophy is to always establish long-term relationships with our producing partners and give honest feedback. Until recently, we took on almost only fully financed projects. Now we are expanding our activities to projects in the earlier stages of production. We want to use our experience and market insights to get exciting productions off the ground and get them ready for the international market.”

Since its inception, Escapade Media made early alliances with producers a priority. “The development side of the business has always sought to take content on even if the idea is just an idea,” says Natalie Lawley, managing director. “If it is the right proj­ect for Escapade, we will offer our executive-producer services to develop, finance and distribute. With the experience of working with buyers, commissioning editors and completed sales for over 20 years, we feel we can ensure that each project is carefully crafted to maximize its appeal to the global audience.”

Of course, that approach to boarding projects early does not come cheap. As Heaney puts it, “You have to have a war chest to spend on content…. Any distributor that has the same setup or size they did in 2013-14 is probably going to be struggling now. You’re not going to be able to get content without putting in a decent deficit. That’s just the way it is. Nine, ten years ago, 90 percent of shows were fully funded. Now it’s probably the opposite. Or it’s fully funded, but there are no rights for those shows coming out of the streamers. Content that is available for distribution, most of it will need a deficit, and that deficit won’t be small.”

That means being far more selective about what to take on—and having the proper market intel to make those informed decisions. For Heaney, that translated into resurrecting “Development Day,” an initiative he had started at TCB connecting producers with broadcasters. This year’s virtual edition hosted 55 buyers perusing 77 projects from 29 producers. “Distributors can work at an even earlier stage if you’ve gathered enough market intelligence and are useful for [the producers],” Heaney explains.

The key is “going where the opportunities are,” Heaney says. “The streamers are still co-producing; they don’t want to fully fund everything. The linear broadcasters don’t want to co-produce everything; they want to fully fund some things. There is room for collaboration, especially if people know you can access money and you’re willing to take a risk, or you have market intelligence and you can bring partners in.”

Mirjam Strasser, head of sales and acquisitions at Autentic Distribution, makes a similar point about being able to work across multiple models, noting, “We are not only including finished projects in our catalog, but also helping to realize projects in early stages through co-financing, presales or other forms of financing. In addition, we have our own production department that delivers high-quality productions every year. This combination puts us in a very good position in the market, where a battle for the best content is in full swing, fueled by the emerging streaming services.”

Indeed, the SVOD and AVOD platforms are upending the doc business in the same manner they changed the game in drama and kids. The opportunities created have been significant, both commercially and creatively.

“AVOD and SVOD services have been an ever-increasing source of revenue stream for us and we expect that to continue,” says Hud Woodle, executive VP of international sales and operations at GRB Studios. “Over the last year, we’ve increased our focus on finding and selling programs to these sectors. GRB is known for providing premium unscripted content, and we are glad to see a trend in streaming services gravitating to factual content.”

The streamers are generally “more flexible in terms of editorial,” notes Fischer at Off the Fence. “They do not have such stringent audience profiles to satisfy and can therefore be far more curious exploring hybrid genres.”

Of course, streamers angling for global rights to shows has caused some windowing headaches, leaving distributors to craft careful and considered rollout strategies to make sure all opportunities are maximized, from linear to SVOD to AVOD.

There are several factors to consider when weighing up deals. “It depends on the status of each project,” observes Olzmann at Albatross. “When a project is still in the financing phase, then the approach could be different from a project that is more or less finished without a finance gap. The chances to get significant funds from a streamer remain limited at that point—though I am confident that this will change in the near future. So when it comes to financing films that are still in development or in production, we’re generally approaching our main—mostly public—broadcasters and a few selected streamers first. We also work closely with our producers to reflect their vision for the project, especially in terms of a possible audience. There is a difference in audience numbers comparing VOD and pay TV versus public broadcasters. Public broadcasters still have the bigger audience share—this may be more important to some producers. In addition, more broadcasters are asking for full exclusivity or a VOD holdback, so we have to be careful in licensing to the right partner at the right time. It has become quite a rights jungle to navigate now, but for me, that is the fun part of being a distributor: finding individual solutions to make all sides smile and get the stories out there in the best possible way.”

Off the Fence’s Fischer agrees, noting, “Streamers are often looking for content that cannot be seen anywhere else—they are looking for that edge and USP that a traditional player wouldn’t include in their prime slot. Therefore, we first and foremost need to ask ourselves where we could see the content fit best. It’s about finding the right match for each project. We want to ensure that we capture the sensitivities around the program’s needs. We look at the return on investment, from profit to impact, eyeballs, campaigning, etc. Sometimes it is worth keeping more control over a title and flexibility to place it with different players in different markets across the different exploitation forms.”

Acknowledging the increasingly complicated nature of rights management, Autentic’s Strasser observes, “We simply have to pay attention to which rights are sold to whom. Strictly speaking, it has always been like that. In addition, productions that may have already completed their life cycle on TV can find new homes with streamers. We see the different offers more as a complementary cycle than as competing rights-exploitation options.”

For the high-end projects and original commissions, the factual streaming business is being driven by the SVOD players, but the AVOD market should not be discounted. “There’s huge interest in AVOD at the moment, specifically in FAST channels, because they are lean-back experiences,” says ZDFE.unscripted’s Rückauer. “It’s an exciting area. You can’t make a lot of money, but you can collect money. We’ve always been very active on all platforms. We were a launch partner for iTunes in Germany 15 years ago. We started collaborating with Google and YouTube. And we have plans to launch FAST channels.”

“AVOD, and in particular FAST channels, are gaining relevance,” agrees Fischer. “A global streamer SVOD deal for a premium title is, of course, a very different business model to AVOD and FAST, although we are seeing SVOD starting to mimic FAST channels in certain parts of the world. As FAST is growing from strength to strength, we are in serious presales negotiations with those channels that have harnessed their core audiences.”

Strasser is upbeat about the YouTube opportunity, with the company having entered a content partnership with Little Dot Studios Germany, “where we exploit content from our distribution catalog on their YouTube channel. We also have similar partnerships with international companies.”

As for narrative trends within factual, the competition for the most compelling personalities, the latest cutting-edge technology and deep insider access is intense.

“Clients are asking for more than the classic blue-chip title, and there is a need for a real USP in access, talent and story, with authentic emotional narrative arcs,” says Fischer. “We also find the growing appetite for content exploring diversity and diverse storytelling very encouraging.”

Albatross’s Olzmann says that natural history and science are both in high demand at the moment. “Many buyers who used to only buy the feel-good, plain nature-portrait shows are now looking for more in-depth, captivating stories to go along with astonishing nature footage,” she notes.

History is also on a lot of buyers’ wish lists, says Strasser at Autentic, “especially ancient and contemporary history. Wildlife is evergreen. However, there is a noticeable shift toward conservation programs and the relationship between humankind and nature.”

“People are thinking about climate change,” agrees ZDFE.unscripted’s Rückauer. “My impression is, what is the next step? What will happen after that wave? You don’t want to just watch a climate change doc; you want something different. People are thinking about Covid and what it says about us and our relationship to nature. We’re trying to bring green thinking to the next level. That’s one of my biggest interests. And many clients are asking us for dinosaurs! It’s been years since you saw the big landmark Walking with Dinosaurs. Now we have better CGI technology. What would happen if you transferred that technology into a really good dinosaur story? I would love to build up a classic co-production model with three or four partners, maybe public broadcaster-led but not necessarily, possibly in combination with a streamer, to tell the dinosaur story from A to Z again.”

True crime remains a top-seller in the factual business, according to GRB’s Woodle. Still, Rückauer reports that while stories of American misdeeds fare well worldwide, local broadcasters are generally more interested in domestic tales. “Everyone wants true crime, but it needs to be very local and specific, which doesn’t sell internationally,” he says.

Both Lawley at Escapade and Sala at ARTE Distribution reference the clear demand for escapism amid pan­demic woes (and travel challenges), while Autentic’s Strasser says that male-driven factual entertainment is “selling like hotcakes.”

At BossaNova, Heaney has set out to craft a curated slate that builds upon the close to 1,000 hours he has from the CJZ and Greenstone catalogs. “That was a big win for us,” he says. “I don’t obsess about hours; I obsess about returning brands and new brands. They have lots of those, which gives a value beyond the number of hours. There are two poles [in the BossaNova slate]: the returnable, repeatable, scalable—it doesn’t matter what genre it’s in—and then the one- to four-part premium. In terms of subjects, it’s true crime, history, adventure, paranormal, hidden-world docs, blue light, ob-doc series, engineering, mysteries, quick turnaround [and more]. We’ll go where we think the demand is. We’re not going to just build up a catalog. We’re not saying, ‘Brilliant, that adds 120 hours,’ because that’s boring and a waste of time. We’re picking up projects we think are going to at least wash their faces—and maybe do a little more.”