Are Distribs Getting More for Less?

Compared to the results of last year's Price Guide, distributors have been pumping up their catalogues (more than doubling the average hours added annually), but investing less money to do so (a drop in average investment of almost one-third). The question...
March 1, 2000

Compared to the results of last year’s Price Guide, distributors have been pumping up their catalogues (more than doubling the average hours added annually), but investing less money to do so (a drop in average investment of almost one-third). The question is, does this indicate an anomaly or a trend?

Simon Willock, general manager of Sydney, Australia-based Southern Star Wild & Real, says that in his opinion the results reflect a combination of lower production costs and increased demand for lower-end programs. ‘Technology is allowing smaller crews to obtain footage much more easily, keeping production budgets lower. Consequently, the cost of acquiring programs becomes lower. Blue-chip is harder and harder to finance. It needs terrestrial coproduction partners, and the deficits often make it marginal business for distributors. Lower budget, high margin business is the way forward.’

Matthew Frank, director of program sales for London factual producer/distributor RDF, agrees that low-end programming is in greater demand, particularly format shows. RDF even has a low-cost production unit devoted to making programs aimed at the cable and terrestrial market for under £30,000 (US$48,000) per episode. Wine World, a 13 x 30-minute wine and travel series, and Style World, a 13 x 30-minute interior design series, are products of this unit, with budgets of around £15,000 (us$24,000) per program.

But while distribs may be getting more product for less money, that doesn’t necessarily translate into increased profits, Frank notes. ‘Demand has gone up, but overall your average license fee has gone down, which is not very good if you’re the distributor. We’ve been distributing now for six years, and over that time license fees have consistently fallen.’ He attributes the drop in fees partly to the proliferation of cable and satellite channels, and partly to the frozen budgets of terrestrial broadcasters.

On the issue of technology, Frank disagrees with Willock that advancements have brought down overall production costs. ‘Generally production budgets have maintained, actually. We’re still getting £150,000 to £170,000 (US$240,500-$274,000) an hour for a pure doc in the U.K., whether it’s shot on DigiBeta or even DVC.’

For Sandra Green, managing director of factual distributor Great North International in Edmonton, Canada, the survey results are not consistent with her company’s experience. She says Great North has been pursuing an aggressive strategy to build its catalogue, but spending has gone up rather than down. Green explains: ‘We’ve been around since 1991, but most of our growth has happened in the last three years. We don’t have deep pockets, and because we’re getting very aggressive about wanting to increase our relationships with producers and bringing in more and better product, we’re finding ourselves being more generous in terms of guarantees, which are paid regardless of what revenues are coming in the door.’

Great North carries a variety of non-fiction genres in its catalogue, including lifestyle, biography, and science and technology, but very little low-end product. Green says they rarely pick up anything with a budget under US$200,000 (for a one-hour one-off).

Stephan Riguet, a Lussas, France-based factual distributor with Ardeche Images, says the survey’s findings do not reflect reality for a small company such as his because he only contracts to distribute finished products. ‘We don’t buy docs, we don’t pre-buy anything. We don’t have the economy to do that. We get a distribution contract which allows us to distribute the film, then we give the money back to the producer. But we don’t give money beforehand.’ Ardeche focuses on 52 or 90-minute social issue-themed one-offs, and adds 10 to 15 docs to its catalogue each year, including those that are in-house produced.

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