EUROPE’S TV BUSINESS MODEL GETS SHAKEN UP BY STREAMERS

2. 4. 2022
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With U.S. streamers still driving local market growth, TV producers in continental Europe are juggling between the Hollywood studio business model — under which Netflix and the likes get all rights in return for full-financing plus a fee — and the pre-existing European model based on co-productions that leave indie producers with backend and give them more creative control.

But that is starting to change.

Thanks to the E.U.’s Audiovisual Media Services Directive (AVMS) — currently in various stages of implementation across Europe — there are early indications that giant platforms are slowly becoming more open to flexibly structured deals. Or, at least, that’s the hope going forward.

At its core, the directive simply states that streamers must offer a 30% quota of European content to European subscribers. But on top of that, E.U. countries are introducing nationally tailored legislation to make streamers directly re-invest a percentage of their revenues in each European country where they operate. And some countries — such as France and Italy — are in the process of enshrining into law new rules that will also force Netflix, Amazon Prime, Disney Plus and other streaming services to invest locally through independent producers and ensure that producers will retain a portion of the rights.

“First of all we welcome all the investments by the streamers in every country in Europe,” says Martin Moszkowicz, chairman of the executive board of German powerhouse Constantin Film. He notes that platforms such as Netflix, Amazon Prime Video and Disney Plus “are already investing a lot of money all over Europe in local-language [content] and also in international English-language shows.”

A recent report by London-based Enders Analysis says many European producers “have come to prioritize streaming platforms when pitching their best projects.” It also points out that Netflix is considered the biggest commissioner of scripted European content in 2020 — ahead of the E.U.’s major public broadcasters — and that Disney now has 60 European skeins in the pipeline for delivery by 2024.

But while Moszkowicz welcomes the streaming giants as investors, he says their business model is “ludicrous.”

“No rights are retained; there is no upside,” he notes. “There is nothing that we — and also the artists, the creative people that we employ — participate in the billions and billions of dollars of success that the streamers have.”

Moszkowicz says German producers “will use AVMS as much as we can to get a bigger part of the pie” and believes that “ultimately we will succeed.”

Here is a look at where things stand in the standoff between streaming giants and producers in four top continental European territories.

France


France, where the government recently approved AVMS regulation, leads the way.

Under the new rules, two-thirds of the streamers’ investment must go into accords for independent productions on which the rights will revert to French producers after 36 months.

That means that one-third of the streamers’ investments will continue to go into deals for shows with French producers under flat-fee pacts that instead will not allow them to hold on to rights.

But though this represents a landmark regulation, the new rules are raising questions on how these investment obligations will be applied and to whom.

The rules create competition among French producers to be included in the “two-thirds of the investment” corridor, says French producer Alexandra Lebret, who is managing director of lobby group the European Producers Club.

“How will the streamers select who are the producers who will be able to hold on to rights, and those who won’t?” she asks.

In early March, Netflix announced more than €200 million ($220 million) in investments in France as it unveiled its 2022 slate of 25 French originals, 10 of which are TV series.

These include “Standing-Up,” about France’s stand-up comedy scene, directed by “Call My Agent” creator Fanny Herrero.

Lebret points out it’s not yet known how Netflix is going to select projects that will benefit from the new rules and points out that Netflix’s biggest French original, “Lupin,” currently shooting its third season, is still being made under a flat-fee arrangement.

Germany


In Germany, where the Audiovisual Media Services Directive regulation is expected to soon be in place, there has been sporadic flexibility by the streamers when structuring deals for top-tier productions.

“The more interesting the property, the better your chances that you will get through with that [structuring a deal where rights revert],” says Moszkowicz.

One case in point is Constantin’s series “We Children From Bahnhof Zoo,” which went out on Amazon Prime Video in Germany.

It was also mounted as a co-production with several partners, including ITV-owned Cattleya in Italy, with Fremantle handling international sales.

Constantin is now mounting high-end TV series “Smilla’s Sense of Snow,” based on the Peter Hoeg thriller, for which Moszkowicz is confident he will be able to assemble a co-prod combining streaming partners and other types of broadcasters.

Moszkowicz also underlines that when it comes to pitching big-budget projects, Europe’s state broadcasters and pay-TV players still rep a viable alternative to streamers.

Last year, Constantin and veteran German TV exec Herbert Kloiber joined forces to form an outfit called High End Prods. to produce event-driven shows specifically made for Europe’s free- and pay-TV market.

Moszkowicz notes that the combined resources of pubcasters, such a Germany’s ARD and ZDF, France’s TFI, Italy’s RAI and the BBC in the U.K, is way bigger than the budget of any of the streamers.

“It’s virtually billions every year and they don’t get enough product, obviously because a lot of the really interesting stuff gets bought on a worldwide basis from the streamers,” he says.

High End will soon be announcing its first slate.

Spain


In Spain, even though AVMS has not been fully implemented, there is a sense that streamers are relenting on their all-rights diktat.

“I think that at the beginning they tried to divide and conquer,” says producer-director Alvaro Longoria, who runs Spanish indie Morena Films.

But now many other players have come in, including Disney, Apple and Paramount.

“A lot of them realize that they have to be flexible if they want to get the best talent,” he adds.

Longoria, whose Christmas comedy feature “Reyes vs. Santa” has been acquired by Amazon for some territories, adds that he finds it symbolically significant that Netflix boarded “Parallel Mothers,” the latest movie by Pedro Almodóvar — who as Cannes jury president in 2017 slammed the streamer.

Netflix just took exclusive Latin American rights on “Parallel Mothers.”

“The whole business model is changing all the time and streamers are the first ones that are happy to adapt,” he says.

Italy


In Italy, where AVMS implementation is still languishing, there are small but significant signals that streamers are starting to budge.

“Some dynamics with the platforms are changing,” says Rosario Rinaldo, head of production company Cross Prods., which is owned by Germany’s Beta Film.

Cross is producing edgy Amazon Italy Original drama “Prisma,” for which Amazon will have SVOD rights in perpetuity.

Rinaldo could be allowed to sell “Prisma’s” free TV rights locally after the show plays exclusively on Amazon globally, if Amazon decides not to commission a subsequent season.

“There is more attention toward producers’ needs during development,” Rosario says, citing a willingness by Netflix and Disney to co-develop projects with Cross.

The prime example in the Italian market of a big U.S. player being willing to engage with Europe’s co-production model is HBO and pubcaster RAI’s “My Brilliant Friend,” the series based on Elena Ferrante’s novels.

In early February, the third installment of the series, “Those Who Leave and Those Who Stay,” premiered on RAI to stellar ratings before launching stateside on HBO and HBO Max.

“As a producer, the search for forms of collaboration between various types of platforms and other broadcasters, including public broadcasters, is clearly part of what I’m seeking,” says “My Brilliant Friend” producer Lorenzo Mieli.

Recently, Mieli, through his Fremantle-owned the Apartment shingle, has been able to mount a three-way co-prod among RAI, Franco-German network Arte and Netflix.

They are making veteran auteur Marco Bellocchio’s upcoming TV series “Eastern Notte,” about the kidnapping and assassination of former Italian prime minister Aldo Moro by Red Brigades terrorists.

“The possibility of business models evolving — and disrupting monolithic models — is born from our ability as producers to propose projects that make this disruption worth it,” he says.

Source: variety.com