CANNES – Netflix and Amazon have firmly carved out a large section in the factual space since their arrival.
Though the digital streaming giants provide format producers with new avenues for partnership opportunities, a visible threat has also been unleashed with their seemingly endless acquisition budgets.
The question surrounding whether distributors and format producers across the globe should be concerned about these shiny new SVOD players making a splash in the unscripted genre was discussed during MIPDoc’s “Who’s Driving the New Format Economy” on Sunday (April 2).
With the recent announcement both Amazon and Netflix will be acquiring more local programming, Ed Louwerse (pictured), co-founder of Amsterdam-based boutique distributor Lineup Industries, sees the move as a great opportunity.
“It’s going to be interesting how companies like Endemol Shine Group and FremantleMedia deal with the exclusivity – that’s where we have the advantage, because we have the IP, we can play around with it,” he said.
Though depending on the content, Louwerse explained that he would “never sell to a Netflix or Amazon because I see the possibilities in many other territories, and if you just do the math it makes more sense to go elsewhere with a more traditional approach.”
But China’s Youku, with an estimated 730 million Internet users generating an average of one billion video views per day, has taken a different approach to the opportunities it can offer both its proven and unproven formats. By mining its troves of data, the SVOD player is able to uncover its user behavior down to the second, thereby enabling Youku to tailor its content and provide for a better viewing experience in the future.
With access to an abundance of analytics data, session moderator Harry Gamsu, VP of non-scripted at Red Arrow International, wondered whether SVOD players and factual producers working within the creative field have would have the capability to predict the next big hit.
“With this data we can provide a very good test with either paper format or a pilot, and put it on the service to collect the data,” explained Qiang Li, director of media acquisition and cooperation at Youku Tudou. “Based on data you can improve your format and make it into a commission.”
But using Netflix’s Beast Master format as an example, is there a world in which a localized French version of the competition series lives successfully on traditional linear via France 5, while the supersized global edition sits concurrently on Netflix?
“It will take time and we’ll have to work out new ways of contracting the windowing model, but I can see a world where we’re layering it up. People who pay $10 a month, they get the first look at it but what happens in six or 12 month’s time?” said Mike Beale, EVP of global development and formats at ITV.
“[Netflix's] Beast Master was not a brand. They created the brand. That’s where I see a great opportunity for IP creators and that’s where you come back to the merchandising,” Louwerse added.
That “Buy It When You See It” technology allows content producers to monetize even further on its IP, further separating the company from traditional linear.
For instance, Li explained, an overlay button will appear on screen attached to clothing and other products showcased throughout the series, offering users the option to quickly and efficiently purchase the coveted materials, and delivered to your door the next day.
“At the Alibaba Group, we’re not only VOD players, but one of the largest ecommerce platforms and it gives producers more opportunity,” he added. “You can generate money from the content, but you can also have a share from the merchandise.
“It transforms the audience into customers,” he said.
“Editorial should come first but if there’s an opportunity, you should look for it,” Beale concluded.