Kate Bulkley, Media Analyst.

Content Creators Take the Direct-to-Consumer Approach

By Kate Bulkley

Hollywood Reporter

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For MIPTV April 03, 2012

All eyes are on All3Media as it sees if it is successful in offering its shows on a pay per view basis on its own portal.

It wasn’t so long ago that program makers were hostage to broadcasters. After all, with no alternatives to the small screen, how else would their shows be seen? The Internet and sites like YouTube an Netflix have changed all that.

Walk into any of the hundreds of booths selling TV shows to broadcasters from around the world this week at the MIPTV programming market and you’ll see them: they are the digital guys from Netflix and Hulu, Amazon, YouTube and Apple. But despite their presence, there is also something else happening: Call it a counter movement, or at least an attempt by some content owners to take more direct control over their digital future by launching their own app or portal and building relationships directly with consumers.

Working with the established digital players like Netflix looks to be an attractive way to go, especially in markets like the UK where there is a growing online rights battle between Netflix, Amazon’s rival on-demand service Lovefilm and pay-TV operators like Sky TV.

Tucked away in a small booth in a less trafficked wing at the market, a company called Easel TV is running the demo of the app it helped make for UK independent producer All3Media. Called A3M Unmissable it is a direct-to-consumer digital app that launches in the next few weeks on Samsung TVs and, a bit later, on LG sets as well. Some 250 hours of content will be available on a pay-per-view basis from All3Media’s catalogue, which includes the Bafta-winning teen drama Skins and the reality show The Only Way is Essex.

The move by All3Media into a direct-to-consumer model is only part of the company’s strategy in digital – it is licensing its programs to Hulu and others as well. But All3Media is eager to try the direct route and it is trying to get other independents to join it to help build a bigger programming proposition with a wider variety of programs. However, not all the big independents agree that launching a direct-to-consumer proposition makes sense.

Both FremantleMedia and Endemol are skeptical about going direct. Both are taking a “watching brief” on All3’s app, preferring to stay in the business of wholesaling their programming to digital players much as they have done for years to TV broadcasters. “We won’t do deals for the sake of a few extra dollars,” said Grant Ross, global head of formats at Endemol. “It has to make sense for the brand.”

Meanwhile, at Zodiak Media, makers of The Inbetweeners and Being Human, there is a recent memory of a failed direct-to-consumer portal called Comedy Demon, which launched in 2008 and eventually closed down because it didn’t work. “We aggregated some great comedy content that was quite high end but the problem was no one came to it,” said Matthew Frank, CEO of Zodiak Rights. “These things are all about the marketing and you have to put significant money behind it. We’ll leave that to the Netflix’s and Hulu’s who know how to do that and we’ll happily take a revenue share, thank you very much.”

Industry VOD expert Ashley Mackenzie, CEO of Base79, a UK company that helps content providers monetize their programming on digital platforms and particularly on YouTube, says for most content, the digital game is all about scale. “The most pertinent thing to remember about how to get into digital distribution is not which platform to use because there are many out there to choose from. Nor is the big question what monetization strategy you should use because, again, there are a lot available, from advertising to pay per view to subscription.”

He added: “The key is to figure out how to build an audience because in digital, scale is everything.”

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