As the international TV business prepares to head to Cannes for Mipcom, the new mantra for producers and executives appears to be pragmatism. The days of bidding wars for exclusive rights are (mostly) gone. There have been cutbacks and cost-cutting after a cycle of rapid growth fueled by streamers.
Advertising revenue is moving toward digital while pubcasters face tighter government budgets and the streamers themselves are consolidating and retrenching.
The reality of the landscape has shifted a lot since Netflix and other streamers launched internationally a decade or so ago. They aggressively commissioned shows and chased global rights, and producers feared being squeezed out of the equation, while independent distribution companies worried they could become obsolete. But a decade later, as streamers rely increasingly on acquisitions, co-financing and bundling, producers and distributors — far from becoming obsolete — have had to sharpen their dealmaking skills.
“Basically, what we’re seeing is the industry shifting under our feet,” says Ludovic Attal, president of Sipur Studios, a distribution banner whose Mipcom slate includes the Latin American romance series “Mírame Así, El Camino de Noa.” “The cost-plus model, where a platform pays 100% of the budget plus a premium for the producer, is retreating.”
Instead, platforms are offering deficit financing and moving toward shared windows, “where a platform takes the first run and maybe one territory or two territories, and the studio will keep the rights elsewhere,” he says.
Another big change? Streamers and broadcasters who used to compete aggressively for exclusive rights are now combining resources.
Elisabeth d’Arvieu, Mediawan’s group chief content officer and CEO of Mediawan Pictures, says the company works “across all business models and genres,” and predicts that “we’ll certainly see more of these kinds of alliances,” which enable broadcasters “to finance their most ambitious projects, which they couldn’t fund on their own.” She points to “1536,” an upcoming series produced by Mediawan-owned Drama Republic, which the BBC brought on board for the U.K., and HBO taking the U.S. and Canada.
Although Mediawan has financed some recent shows with solely linear partners, like “The Count of Monte Cristo,” d’Arvieu says that streamers have become their main clients and account for the largest portion of their lineup in every country.
Another upside of the upheaval is that while producers must be more innovative to finance their shows, they get to retain the IP.
Gaumont Television president Isabelle Desgorges produced a number of shows for streamers, such as “Lupin” for Netflix and “Becoming Karl Lagerfeld” for Disney, but did not own that IP.
However, tighter purse strings, coupled with French regulations stemming from an E.U. directive that took effect in 2021 and forces streamers to split rights with producers, mean that Gaumont is now able to keep the IP on most shows it makes with streamers — for instance, the French crime series “Pax Massilia” for Netflix.
That also means less money is coming from streamers on those deals.
“Everyone is trying to work things out,” says Desgorges, adding that producers have “become really savvy with all this stuff, because we’re bringing in the money. … It’s the producer’s job to take risks, build a catalog and preserve the value of what they produce.”
Gaumont is currently in post-production on a series adapted from the bestselling novel “Le Roman de Marceau Miller,” which has been commissioned by France Télévisions, and Desgorges says she is “open to securing a first-run slot on a streaming platform.”
She has another show ordered by Amazon, but “Amazon is only taking the first-run rights in France, so they’re not giving me enough to finance the series.” So she went to French channel M6 to sell the second window.
The most dramatic version of this convergence is aggregation. TF1’s landmark deal in which Netflix carries all of TF1’s channels on its service in France recently launched; Amazon has a similar pact with France Télévisions; and Disney struck an agreement with M6 Group for its hit programs.
Local producers are working out what commissions from these linear channels are now worth in this new market.
Desgorges, for instance, sold her series “Edgar and Augustine,” starring Freddie Highmore, to TF1, but Netflix has not yet boarded it, even though it will be available on the streamer through its deal with the French network. While she understands that traditional TV groups need growth drivers, these types of aggregation deals are also causing concern. “We do feel that our series are everywhere and therefore lose value, because they lose their exclusivity and are thus milked for all they’re worth rather quickly,” she says, before adding, “It’s still in our best interest for the networks to succeed. On the other hand, we need to see a return on our investment.”
In this new landscape, scale has become crucial for survival, which explains the wave of consolidation happening internationally, with recent high-profile deals such as Banijay buying All3Media and Mediawan buying North Road.
Mediawan’s d’Arvieu, whose outfit is one of the top two consolidators in France alongside Banijay, says scale is key to having leverage when dealing with global streamers.
“It’s important for us, when facing these very large platforms, to be powerful ourselves and to be able to sit across from them at the negotiating table as equals,” says the Paris-based executive. “Today more than ever, it means being independent — that is, not depending on any platform or client,” she says, while also using our talent, IP and size. “We operate in 15 countries; it’s a major asset.”
Another big asset is the “ability to independently position ourselves around IP, to develop it, and then seek out the best partner for it on the market,” says d’Arvieu.
Jane Turton, Banijay’s deputy CEO and former All3Media chief, says that with scale also comes the value of data, which is a decisive metric to greenlight and sell shows. “The better your distributor, the better-capitalized your distributor, the more sophisticated your distributor, the better the data analytics,” Turton says.
Broadcasters face the same pressure toward consolidation. Over the summer, ITV agreed to sell its media and entertainment business to Sky for up to £1.6 billion ($2.1 billion). Peter Bazalgette, former chair of ITV, says that domestic broadcasters in Europe have got to merge in order to survive.
“We cannot have four or five successful domestic broadcasters in each European country,” he says. A competitive streaming service, he says, needs to commission drama at £4 million to £5 million ($5.3 million to $6.6 million) an hour, “and most domestic broadcasters can’t afford to do that.” Regulators that blocked earlier mergers, he adds, “were looking in the rearview mirror and not on the road ahead.”
France is a case in point. TF1 and M6 abandoned their planned merger in 2022 after running into competition concerns, but TF1 chief Rodolphe Belmer has said the two could revisit a tie-up once it becomes possible again in 2028.
But the biggest disruptor these days is YouTube, whose reach now exceeds Netflix in average daily viewing around the world. Streamers and broadcasters alike, including Netflix co-CEO Ted Sarandos and Belmer, are pressing the E.U. to impose investment obligations on the platform as the E.U. reviews its audiovisual directive.
Yet producers and TV groups are also eager to source talent from YouTube. Desgorges says she talks to creators on the platform, “not so much because they’re on YouTube, but because they’re real creators and they have great ideas.” Fox Entertainment Global has committed to 200 microdramas, including a slate with YouTube star Dhar Mann. And d’Arvieu points out that Mediawan’s biggest hit this year, “Backrooms,” co-financed by Chernin Entertainment and A24, grew out of a YouTube horror web series created by Kane Parsons. Parsons directed the movie, which went on to gross over $400 million worldwide. “YouTube is a partner. YouTube is a way to showcase our content; it’s also a source of IP,” she says.
The lesson, according to d’Arvieu, is that “in our industry, which is undergoing upheaval, we really need to continue being creative, agile and … pragmatic from a business and economic standpoint.”
Cynthia Littleton and K.J. Yossman contributed to this report.