ZDF Studios’ Ralf Rückauer

VOD and FAST channels are providing new opportunities ZDF Studios, VP Unscripted Ralf Rückauer tells TV Real.

With an extensive slate across science, wildlife and history, ZDF Studios boasts an enviable catalog of nonscripted content that it has been successfully licensing to pubcasters, commercial networks and SVOD services.

TV REAL: What opportunities are you seeing for licensing your content to AVOD services?
RÜCKAUER: Over the last couple of years, the VOD landscape has changed in a massive way. Why? There are many reasons: First, cord-cutters wanted to watch whatever they wanted and when. In addition, they realized streamers are much cheaper than traditional linear pay TV. But then the cutters realized that they needed to subscribe not only to one but to two, three or even more platforms. And then, after a while, they realized that it is less “lean back” to decide what to watch. But still, the cocooning effect of the pandemic made them watch and subscribe even more. With Covid slowly disappearing, a war in Europe, an energy crisis and inflation of around 7 to 9 percent, people are looking closer at their subscription fees. Ad-funded business models are getting more into play. So specifically, FAST channels are gaining much momentum, while SVOD is losing a bit. For us as a distributor, both models are attractive in the mix with the more classical free linear and pay linear.

TV REAL: How lucrative is this space becoming in terms of tangible revenues?
RÜCKAUER: While SVOD licenses are primarily based on flat-fee agreements, the AVOD models are mainly based on share deals. On the one hand, this means that the revenue stream gets into your books a bit later, and you can only guess about the amount of money coming in. On the other hand, you usually upload far more content, which provides a larger basis for your revenues. We are always interested in revenues to get our program investment refinanced.

TV REAL: I understand managing deliverables with the AVOD services can be time-consuming. Are you finding that to be the case?
RÜCKAUER: We are noticing that we are delivering more programs to more customers. This applies to the more traditional linear channels and SVOD, AVOD or FAST channel services. At the same time, the number of customers and the volume they receive are increasing significantly. So yes, it’s challenging to handle the volume, but that’s not because of the AVOD exploitation per se. We are constantly optimizing our delivery processes, automating the workflows and preparing ourselves for the ever-increasing volume to futureproof ourselves.

TV REAL: What has the emergence of factual AVOD services meant for you as you craft windowing strategies?
RÜCKAUER: Endless discussions within the team! While the “VOD team” wants to market as quickly and widely as possible, the “linear channels team” often hopes that we will be able to negotiate a presale or a sale at much better conditions. So the “VOD team” tends to say that the “linear channel” hopes last way too long. The truth lies in the middle. You have to balance this internal dispute very carefully. Almost all “traditional” broadcasters want more and more holdbacks and securities, while VOD and FAST channels offer more attractive long-tail effects. Gut feelings and some market experience help a lot.