VOD – Profit or Peanuts?

Posted on: Thursday 04 July 2013 6:36pm by Jayne Kirkham

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#TCMC

Blogged by – Jayne Kirkham

As licence fees fall and advances against DVDs and M&L shrink, how does a producer make up the deficit in their budget?  Could VOD help them out?

Top Takeaways from this session:

• VOD is useful for back catalogues
• New content is beginning to come through
• The big companies are learning quickly what they want
• Producers shouldn’t expect a pot of gold
• Producers should be prepared to give away VOD rights to generate interest in other revenue streams
• Not new money, just the same money in a different pocket
• Audience increasingly wants to watch anything anywhere
• Possibility of growth in family based content with smart TV
• Better to have a big back catalogue than a single product
• Older kids’ content fares better on VOD than DVD
• SVOD, AVOD… there are as many versions of VOD as letters in the alphabet

The last twelve months has seen a dramatic increase in consumer awareness of VOD.  People are now used to subscription TV and the main objective of distributors is to mine the catalogue of stuff not on linear TV.

2 years ago there was very little VOD but now it is a big part of the business: 25% of a distributor’s catalogue will be in VOD.  Original conent is coming through as well but it is not easy doing business with small single projects.  The likes of Netflix and Amazon have been learning what works for them and are now getting more selective.  The likes of Sky don’t want small individual producers to work with but bigger distributors with a slate to sell.

The old model of TV + DVD sales has fractured into something far more complicated and one needs prudence to figure where and when platforms will pay out.  Producers shouldn’t expect a ‘pot of gold’ with VOD.  Better to see it as exposure for product to generate sales elsewhere.  Therefore don’t be reluctant to give away VOD rights.

Catch up VOD should be standard.  Subscription TV needs 12 months minimum licences to gain traction for a product.  Don’t expect new money to come into the sector with VOD. It is the same money just redistributed.  However, VOD does mean a new revenue stream from content for older kids who didn’t necessarily buy DVDs.

Don’t forget the benefits of VOD – for the consumer it’s safer than YouTube for preschool, and more interactive; for the producer it offers access to data that can shape commercial thinking.  It was cited that iTunes for example are a joy to deal with and easier than trying to arrange shelf space at Tesco, on which you can lose a lot of money.

Currently 92% of 18-34 year olds expect to be able to watch anything anywhere.  As they become parents, so their children will grow up with that expectation being the norm.  However, while smart TVs are coming on to the scene, whether they will drive an increase in family-based content remains to be seen,  what seems more likely is the current love of mobility.

Producer Mike Young has been working in the USA for some time: via video, he explained how most recently he has set up two on demand ad-funded channels, Kabillion and Kabillion Girls Rock using his own catalogue. It reaches 50 million households and has 22% audience share and growing.   Whether this could work in the UK remains to be seen.  With less money available up front, big pockets are needed to fund production before any income is generated.

Introduced by – Tony Collingwood, Writer/Producer, Collingwood & Co

Speakers – Ed Galton, CCO and MD, CAKE; Eileen McCarthy, Broadcast consultant and former Global Programme Director, Kidsco; Russell Pearson, Head of Digital Distribution, HIT; Jon Bourdillon, Consultant;  Mike Young, CEO Moonscoop LLC (Via Video)

Produced by – Siwan Jobbins, Freelance Creative Producer

Sponsored by – pact.