The cost-of-living crisis is wreaking havoc and the global TV industry is not immune.
As hundreds of buyers and sellers descend upon the UK for the annual London TV Screenings, distributors are looking closely at how they can adapt their catalogs and work in tandem with clients in the face of the incoming recession.
However, the task is not an easy one. Numerous distributors tell Deadline they have had contingencies in place for a long time to deal with such a macro fiscal event – contingencies that came to the fore during Covid-19. These are frequently being shaped by the world around them, not just by recession, they say.
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“The ongoing strategy we have and the way we approach the market is constantly evolving,” says Ruth Berry, ITV Studios’ Managing Director of Global Distribution, who was recently promoted to lead the outfit’s combined Distribution and Entertainment arms. “Thinking about these dynamics comprises a large part of our job. There is always a bit of a lag in terms of where you think the world is at and where it’s actually at, and we have to really understand that.”
Simon Cox, EVP Content Acquisitions of Big Brother and Survivor seller Banijay Rights, has spent the past two decades learning how to deal with the “ups and downs” of the global economy and applying them to the cutthroat world of TV sales.
“We are a global business operating and selling globally so this is all about being agile and adapting to local needs,” says Cox. “Being aware of what’s coming is so important. How long will this recession last for? Will it be like 2020 or more like 2008?”
Producers around the world are dealing with declining budgets as broadcasters, pay-TV channels and networks rethink their spend, and this can have both positive and negative impacts on TV distribution.
While Berry urges caution in terms of overplaying the current economic situation’s impact on the market, she says her team has noticed buyers taking “a more considered approach.”
“They are seeking clarity,’ she adds. “I would say things feel ‘business as usual’ but a little bit slower. Buyers are now thinking really hard about recommissions and renewals.”
Berry’s words chime with those of Sky UK Managing Director of Content Zai Bennett, who stressed a “fewer, bigger, better” approach at an event earlier this month.
Sellers adapt
With increased demand for premium docs, Berry’s outfit is debuting natural history content at the Screenings, picked up via its mega $126M acquisition of Tiny World producer Plimsoll Productions.
ITV Studios will be seeking partners for natural history projects, a popular genre that is nonetheless at the pricier end of factual TV and requires co-producers in order to get off the ground. With that in mind, the global industry’s penchant for co-productions will no doubt continue long into 2023 and, on the scripted side, Berry flags the likes of Piv Bernth’s ITV Studios drama Blackwater, which was backed early on by Swedish network SVT and Germany’s ARD Degeto.
Banijay’s Cox also spies opportunities in the premium documentary space, which, while expensive, is ultimately cheaper for buyers than high-end drama. Premium docs were a major talking point at the recent Mipcom Cannes and multiple distributors have been ramping up their catalogs in response, with Banijay pushing the likes of Lara vs. Escobar.
“[Premium docs] are a growing slice of the market,” explains Cox. “Where traditionally you’d go for a drama, they give linear networks and streamers alike that premium feel at a slightly cheaper price point.”
While docs-over-drama may be one solution, Cox counters that escapist scripted tends to be in vogue during times of economic strife. Having a broad range of content is crucial and large distributors like ITV Studios and Banijay Rights extol the virtues of having a rich pipeline of shows from established producers.
Paul Heaney, who runs factual distributor BossaNova, says things get tougher for smaller outfits during recession era. “There may be a squeeze on new shows coming through so our pipeline slows down and it becomes more about the catalog,” he adds. “Buyers are taking less risk.”
Having an established roster of tried and tested formats helps when dealing with risk-averse buyers, Berry and Cox say, and they will be speaking to networks about formats at a variety of price points throughout the week in London.
This strategy will be a guiding light for Keshet International, according to Fleur Wheatley, the Israeli powerhouse’s VP of sales.
In the past few months, Wheatley says networks have been “looking at our formats in a different way” and she predicts those that can be made cheaply will dominate over expensive finished tape offerings.
“Buyers are looking to make high-end shows more economical,” Wheatley says. “Once upon a time they would consider a show’s budget [to be] too big, but now they are saying ‘How can we make this more cheaply?’. These evergreen, cost-effective formats are crucial.”
Wheatley cites several recent examples such as Keshet’s Rising Star and Deal With It, the former of which is being remade in the likes of Brazil, Greece and Indonesia with live components stripped back, enabling them to make the shows for 40% less than the original versions. Rising Star, many will remember, exploded into the market at Mipcom 2013 as a game-changing, high-cost format replete with LED screens and live voting technology. Wheatley says the same is true of scripted and Keshet will also be pushing drama formats that can be picked up and made at cheaper price points.
Lessons from Covid-19
Overseeing a patchwork of territories to forge a cohesive distribution strategy is made harder during recession and Berry notes that certain territories are being impacted earlier and more brutally than others by the shifting economic headwinds.
She likens the situation to the “domino effect” of the early days of the pandemic when different countries were hit by waves of Covid-19 at different times. This, she says, saw distributors become “far better at managing these crises.”
Wheatley says the plethora of new shows that hit screens following the end of lockdown is making it harder to sell older formats. “During the pandemic it was much easier to sell and package older shows and give them new life,” she adds. “Now all this new content has been made and there is just so much out there. It’s great for the viewer but gives the distributor less low-hanging fruit.”
Cox, however, considers how a recession can have a positive impact for TV sellers with audiences spending more time indoors watching the small screen, while cinemas suffer.
“People cut back on cinema spending or going to the pub but continue to consume media at home,” he says. “There’s definitely a shift in lifestyle that is advantageous to those selling home-based entertainment.”
In the U.S., home entertainment has been hit hard. Layoffs at tech giants, streamers and studios have been rife over the last few months, most recently at Disney.
Last October, former Showtime President of Entertainment Jana Winograde declared “belt tightening is coming” and indicated that middle and lower budget shows will be affected the most. (Winograde and fellow Co-President Gary Levine subsequently had their positions eliminated in a Showtime shakeup as it moves to integrate with sister streaming service Paramount+). Bossanova’s Heaney says, “Budgets are being held firm for the big, noisy shows and the squeeze is coming with lower-priced stuff. From our perspective that means we’ve got to make what we have work.”
For Cox, uncertainty regarding the streaming giants is leading sellers to proceed with caution.
“People are very conscious about how factors such as the stock price of the streamers is impacting spending decisions,” he adds. “Streamers’ performance is based on content spend and subscriber numbers and both are under consideration.”
Berry, however, notes that the likes of Netflix and Prime Video are “not necessarily reducing what they are spending, but just increasing spend by slightly less than before.” She also flags the growth of AVoD and FAST (free ad-supported television) channels, which gifts alternative opportunities to sales houses. “As we transition to new business models, there will be more maturation in the streaming space,” she says.
Amidst this challenging economic climate, sellers continue to emanate an air of positivity as they enter one of their busiest weeks of the year. Heaney says there are “definitely green shoots” and points to the boom in production taking place across Europe, with these shows set to make their way into distributor catalogs in the coming months.
“What cost of living crisis?,” jokes one distributor when considering the list of swanky events, expansive networking sessions and cocktail parties that are taking place during the London TV Screenings.
But after the glasses are drained and buyers fly home, sales houses of all shapes and sizes will need to ready themselves for the bumpy ride to come.
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