TBI Tech & Analysis: Will Coronavirus crisis kick-start online distribution?

Imagen’s online portal

With the traditional events calendar thrown into disarray as the impact of Coronavirus hits, we ask whether digital platforms might provide an answer to distributors concerns. Andy Fry reports.

Digital technology has transformed the worlds of entertainment and commerce. So it’s no surprise to see a slew of new platforms aiming to reinvent the world of content distribution. Over the past few years, the likes of TRX, Vuulr, RightsTrade, Imagen, ProgramBuyer, and Rawnet’s ONE have all staked their claim for a share of this emerging market.

While each of the above offers distinct business models and functionality, viewed as a cohort they are seeking to deliver two primary benefits to buyers and sellers: firstly, a cheaper way to buy and sell content than attending physical markets; and secondly, a means to extract more value from content, by removing some of the real world restraints to generating revenues.

TRX invites buyers to use its platform for free. Initially, it used a transaction fee on each deal, but that proved inflexible. So it moved to subscriptions and saw distributors numbers increase. Latest figures suggest the site has 1500 registered buyers and 70,000 hours of content on the site. Among 110+ distributors clients are BBC Studios, All3Media, TCB, Lionsgate, StudioCanal, Televisa and BetaFilm

Launched in 2017 by industry veterans David Frank and Matthew Frank, TRX entered the fray with financial support from the likes of Channel 4 and Sky. Configured as a transactional marketplace, TRX charges sellers a subscription fee to put content on the platform. Buyers (who are highly prized and get to access all platforms for free) can browse what’s available and check availability (eg by platform, geography or time period). At this point, they can make an offer. If accepted, the two can complete their deal on the site if they want to.

Matthew Frank, CEO of TRX until late 2019, has always taken the view that TRX is complementary to the kind of selling that takes place at real world markets. Scenarios where the platform comes into its own, he says, include where the amount of revenue involved doesn’t justify face to face deal-making. This could be the sale of a headline show to a low priority buyer who can’t afford to travel to annual markets. Or it could be a buyer who wants to stock up with long tail or archive programming.

For the first two years, this proposition seemed to be building a lot of momentum. In late 2019, however, it was revealed that the Frank brothers would be stepping back from the running of the platform, creating uncertainty about TRX’s ability to keep functioning without them.

A quartet of challenges

Frank was unavailable for comment regarding the future of the platform, but it seems likely that there have been four key challenges getting TRX to a point where revenues are rising faster than cash is being burned (some of which also apply to other players in this sector). One is TRX’s use of a subscription model which, while valid, could disincentivise some distributors from joining the platform.

Another is the fear that TRX might disrupt existing business models – for example making it easy for buyers to cherry-pick shows rather than sign up to content packages. Thirdly, there is the complexity of content/rights integration. While Sky Vision and BBC Studios integrated their rights management systems with TRX, the fact remains that it is a challenging job to upload content in a way that accurately reflects all the relevant rights information.

Vuulr is a transactional marketplace that is free for buyers. Distributors can list content for free but pay 10% commission to Vuulr upon completion of a successful sale. In addition, the platform allows VOD platforms to make offers for content using a performance pricing models. This is based on factors including estimated viewer count, stream length, share of advertising or subscriber revenue.

Finally, there is the issue of buyer inertia. Just because buyers are registered doesn’t mean they feel comfortable switching from traditional ways of doing business.

Similar in ambition to TRX is Singapore-based Vuulr, a transactional platform that launched at the Asian TV Forum in 2018, promising to handle everything from “discovery to the deal”. CEO Ian McKee says the platform currently hosts 35,000 hours of content. “From a point where we had an empty site, we’ve attracted 6,500 separate titles,” he says.

McKee agrees with Frank that platforms like Vuulr are complementary to markets – though his assessment that 35-40% of value is lost to the friction of traditional transactions obviously implies some kind of fallout. Notwithstanding potential disruption, he says Vuulr is a “natural development given that buyers are looking everywhere for great content these days. Couple that with the fragmentation we have seen in buying and selling, and the ability to source content from a single destination makes sense.” In addition, he says Vuulr helps speed up transactions – with deal times dropping from months to weeks.

Unlocking value

McKee says a lot of the benefit lies in unlocking value that wouldn’t be possible in the legacy model. “We’ve had Spanish animation sell to Mongolia and Bollywood LGBT content picked up in Taiwan,” he says.

A key distinction from TRX is the strong Asian profile to Vuulr’s content – with clients including Mediacorp, Astro, ABS-CBN, and Hooq. The long-term ambition, however, is to be global. To this end, Vuulr has signed up the likes of Banijay Rights, Warner Media, CNN, Viacom International Media Networks, and Super RTL. Also different to TRX is that there is no subscription for sellers (McKee doesn’t want to any barriers to match-making). “It’s free to list as much as you want – from producers with a single title to large scale distributors. The business model involves a 10% commission fee when deals are completed.”

RightsTrade uses a subscription model, with distribution companies paying $3000 to $100,000 per year depending on the volume of content. Buyers can access for free, though the platform is exploring introducing a premium service for buyers. The platform says deals to date range anything from three figures to six figures.

RightsTrade, an LA-based transactional platform, was launched in 2016 by rights specialist Jaime Otero. “Initially we focused on film, but now there is a 50/50 split with TV,” he says. “We have 30,000 registered users and clients include Lionsgate, Legendary, Miramax, Gaumont, Sonar and RTVE.” At launch, the platform was US-centric, says Otero, but efforts have been made to expand the footprint “so now we have content from Europe, India, Asia-Pacific and so on.”

Like TRX, RightsTrade has a subscription model. Aside from the revenue this brings in, Otero says: “Subscriptions ensure we maintain a high quality threshold. The risk with a free model is that sellers won’t necessarily take care to update their content – and that can lead to frustration among buyers when they are trying to source shows.”

In common with all the platforms, RightsTrade generates a lot of data. “We use this to create an anonymised aggregated analysis of sales trends that is part of the seller subscription. So if buyers in one country are over-indexing on a certain genre, we can alert our clients to that.” RightsTrade Market Insights include the fact that there is strong demand for horror in emerging markets such as China, India, and Mexico. One of the more surprising discoveries RightsTrade has made, says Otero, is that 75% of sales are more content five years old or less. One possible explanation for this is quality. Another is that older content is likely to have less data on underlying rights (eg music).

With three transactional platforms, an obvious question is whether this is an easy business to set up. Otero says no – stressing that it is not easy to build critical mass. “There are challenges around securing the content and making the user experience function properly. But probably the biggest challenge is making sure titles have as much rights data and metadata as possible listed on the site. We’ve integrated a leading rights tracking platform called FilmTrack, which means any FilmTrack clients can quickly sync to our marketplace.”

Added value offerings are also key to maintaining a competitive edge, says Otero. “For example, we offer a kind of concierge service to buyers that are too busy to search for content. They tell us what they are looking for with as much specific detail as possible, and then we manage navigation for them.” Echoing this point about added value services, Vuulr’s McKee says his platform has introduced a “bulk load service where we take on the job of adding the content for buyer”. TRX, meanwhile, has an option called TRX Campaigner, which allows sellers to target high priority buyers with specific shows.

Match-makers

ProgramBuyer is a non-transactional platform that offers new distributors a free trial period, with no commitment thereafter. After the trial, pricing then reverts to a monthly listing fee per hour marketed on the site. Pricing is based upon the number of hours listed, decreasing with volume. Pricing can be as little as 20p per hour, per month. Sellers can sign up for a minimum of three months at a time.

In addition to the above, there are also platforms that facilitate buyer/seller match-making – but stop short of transactions. One fast-growing example is ProgramBuyer, co-founded by Edwina Thring and Roz Parker, two alumni from National Geographic Television International. Supporting them are new head of sales, Nina Bareta, and a team of metadata, analytics, technical and security experts.

Parker explains that ProgramBuyer is “a non-transactional portal, aggregating distributor catalogues to give buyers the convenience of searching and screening content on a single site, using very detailed search parameters. When buyers find content in which they are interested, they go to the seller to negotiate and close the deal.”

Launched in Q1 2019, ProgramBuyer does not take any commission and charges sellers a listing fee. It is free for buyers. Parker says ProgramBuyer “is not trying to disrupt existing relationships or interfere with market attendance, but to create a digital resource that supports the industry 365 days a year. It supplements their existing activities and helps sellers reach buyers from new platforms.”

ProgramBuyer currently has 800 registered buyers, 120 distributors and 75,000+ hours of content across genres. Sellers using the platform include A&E, Kanal D Turkey, Keshet Israel, Passion Distribution UK, Red Arrow Germany, Seven Australia, Lagardere France, CTC Russia, Ying Group Singapore and Televisa Mexico.

Explaining why the platform is non-transactional, Parker says “overwhelming feedback indicated that the preference was for buyers and sellers to continue doing business face to face. It is supporting them and not trying to replace existing websites or relationships.”
Regarding data, Parker says: “We are gathering crucial data which is giving us an insight into buyer habits, geographic trends, most popular genres etc. This will be analysed and made available soon. Each seller also has instant access to the analytics on their own content.”

Rawnet ONE has three levels of subscription; Lite, Pro and Enterprise. Lite starts at £1000 per month, Pro at £3000 per month and Enterprise: at £5000 per month. The more expensive tiers are more suitable for bigger distributors and included additional features (eg CRM integration, market support, bespoke app etc). The above costs are in addition to a set up fee which varies company to company.

Another non-transactional service gaining traction is the ONE platform, created by UK-based digital agency Rawnet. ONE director David Rhodes says the platform grew out of work that the agency did for UK studio ITV – helping the company create a bespoke platform for showcasing its content. “From there, we created a white label version and then launched an aggregated platform, where buyers can search and view content from different companies – accessible both via an app and a website. On the ONE platform, buyers can view content, see details about shows and communicate with the seller.”

Moving from mass

To date, ONE has mainly been targeting large distributors, but Rhodes says a new “lite” version is launching for producers and boutique distributors. A key USP, he adds, is that the various sellers on the ONE platform retain the distinctive character of their brands – rather than having content presented in a uniform or commoditised way. “Our work starts with bespoke products for clients, which means they then have a tailored presence on the platform. This explains why we have eight of the UK’s top distributors as well as the likes of A&E and AMC.”

The ultimate goal, says Rhodes, is for ONE to be a transactional platform, but the company is cautious about this step. “We’re talking about clients with vast catalogues and really complex rights scenarios. That side of things can get really messy – especially when you start digging back into archive programming and all the underlying rights (eg music and archive) attached to shows. Aside from the rights issue, it is also still challenging for transactional sites to generate decent revenues when many of the individual deals are low value.”

Another operator is Imagen, which describes its mission as being “to nurture innovation and find new ways to revolutionise media management.” The company aims to enable the central management of media so that content can be used more quickly and more often, with the ambition to enable businesses better address their markets with their content.

Imagen uses a customisable platform to enable IP owners to offer fast, easy, secure and controlled access to content, with customers including the UK’s Premier League, Women’s Tennis Association, BP, Reuters, BBC and Endeavour’s IMG. The British Film Institute (BFI) also uses the service for its archives, and the company is currently expanding its global operations in the US and Europe after raising a £6.5m ($8.5m) funding round led by Downing Ventures.

“The broad range of media management tools that the Imagen software offers means that our customers have one fully (customer) branded place to store, display (via controlled access), inform and distribute their valuable assets,” says Will Pitt, who heads up Imagen’s sports division. “The software is 100% created and owned by us, which means that there are no third-party dependencies,” he continues, adding that “the ability to integrate with other systems and processes easily also sets us apart, as every customer has a unique set of workflows.”

Imagen is not purely sports focused, but it gained a number of new customers last year from that sector, ranging from Major League Baseball, the International Tennis Federation and the Badminton World Federation. The aim is to “help these organisations unlock the value of their ever-growing video libraries,” explains Pitt.

The growing demand for online video content is seen as a major opportunity for Pitt, particularly when combined with tech. “New tools, particularly machine led or Artificial Intelligence (AI) tools, will increase in their sophistication making it quicker and easier than ever before to process, inform, find and use content, making that demand easier to meet. There will also be an increase in User Generated Content (UGC) platforms and we will likely see many established brands incorporating UGC content along with professionally generated output,” he adds.

Mena.tv is an online content market for the Middle East and North Africa, suggesting there may be room for regional players. CEO Nick Grande wants to “accelerate the billion-dollar MENA b2b market in premium TV content, by helping buyers and sellers find each other, bridge language barriers and create trust and transparency.” More than 630 content buyers have so far registered while Discovery and Viacom Comedy Central are amongst the 40 or so clients showcasing content. Mena.tv aims to grow the latter to 1000 over five years.

Budgetary requirements

As with real world markets, all these new platforms will live or die by their ability to attract buyers with budgets. There are also regional offerings in the market, such as Mena.TV – but regardless, there still remains a central question around the speed at which large sales outfits will migrate content to transactional platforms.

If the end result is fewer sales executives, lower commissions, scaled back market presence and a presumption against package deals, then there are disincentives either at an organisational level or, just as importantly, on the frontline.

Vuulr’s McKee acknowledges that he encounters reluctance among some sellers, but he expects a tipping point to be reached.

“The risk of not being on a platform like this is that buyers find alternative content that is just as good but cheaper. It echoes the travel sector – with hotels ultimately unable to resist platforms like Expedia.” And at a time when markets are facing almost unprecedented pressures, the potential propositions of these online alternatives have arguably never been greater.