People/Biz

Summit ’18: Finding an OTT business model that fits

Until OTTs find a business model that works, prodcos looking to work with them have to be ready to go along for the ride. Nutopia’s Jane Root asserted this opinion while moderating ...
January 31, 2018

Until OTTs find a business model that works, prodcos looking to work with them have to be ready to go along for the ride.

Nutopia’s Jane Root asserted this opinion while moderating a panel on Tuesday (Jan. 30) during the Realscreen Summit in Washington, DC.

Root was joined by James Burstall, CEO & chairman, Argonon; Jan Frouman, chairman & CEO, Red Arrow Studios; and the new CEO of ITV America, David George. The group shared their thoughts on how prodcos can navigate the evolving economic models of OTTs.

George said that each company has a different business model, as well as an evolving strategy. How Netflix, for example, strategizes looks different than that of Amazon or Apple, all which are still “getting their sea legs.” This leads to a certain amount of uncertainty when carving out a deal between a platform and producer.

George said Apple is still trying to find its strategy, with people waiting for the company to jump in and “do something.”

He said Google is in content but, wasn’t sure if they want to be real content players or if it’s “just another piece of the pie for them.”

Frouman said Red Arrow does a lot with Google because they have a digital studio and a lot of influence, but he also said he’s not sure about its ultimate end game and where that fits in their overall business. “Nobody knows.”

Argonon’s Burstall noted that Netflix may be dominating the market, but also has significant debt which is not sustainable for the long term. Netflix is currently in competition with Hulu and Facebook, which have greenlit tons of shows as of late. Because Facebook’s content is going to be free, it will be constantly disruptive, said Burstall, which is good for content creators.

George sees Amazon like the premium cable network HBO, while Netflix is like cable. He said companies need to understand their business models when approaching them, and recognize that each one has a different ambition is in the marketplace.

But Frouman disagreed with George’s sentiment. “I think Amazon wants to be everything to everyone,” he countered.

What differs from working with OTTs and networks is that the streamers have targeted, real-time metrics informing them of what content their audiences want. Networks, on the other hand, are fishing for what their audiences want.

Knowing what audience want makes it easier for these platforms to create content. Ironically, George noted they don’t share information about those metrics with their partners.

Frouman said that in the end, these are new partners buying content. In some cases, he said some shows that were being renewed at Amazon and Netflix are no longer being renewed, and OTTs are gradually maturing and changing how they define success.

In the beginning, there was a phase of heavy experimentation, followed by changes in rights and contract goals.

“New players then feel like the old ones. But they are serving viewers in a different way,” said Frouman.

What Burstall said he likes about working with platforms such as Snapchat and Netflix because the execs that work there are free-thinking, have the money and space, and want to break out with premium content.

“What I like so far about working with them is that they are giving us a lot of latitude. We come with an idea, very exacting, they are really demanding in what they are looking for, and we bring the best possible team to the table and then we get on with it,” he said.

 

About The Author
Barry Walsh is editor and content director for realscreen, and has served as editor of the publication since 2009. With a career in entertainment media that spans two decades, prior to realscreen, he held the associate editor post for now defunct sister publication Boards, which focused on the advertising and commercial production industries. Before Boards, he served as editor of Canadian Music Network, a weekly music industry trade, and as music editor for HMV.com. As content director, he also oversees the development of content for the brand's market-leading events, the Realscreen Summit and Realscreen West, as well as new content initiatives.

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