TBI Distributor’s Survey 2020 – Part 5: Conclusion
Few areas of the content business have adapted as quickly over recent years to the vast changes in the business as the distribution sector, with companies large and small adeptly planning and executing savvy strategies to ensure they remain relevant. The effect of the Covid-19 pandemic has again tested this sector’s resolve and it is clear from this year’s findings that the past six months have had a considerable toll on sales. Yet there are positives and an overwhelming optimism that the industry can rebound.
Conclusion: Factoring in
Covid-19 has had a huge impact on the distribution business, but the effects have been disparate and wide-ranging, with more challenges yet to come
Distributors have always been at the sharp end of the fast-changing content business and have been keenly affected by any disruption across their pipelines.
The findings in TBI’s Distributor’s Survey 2020 underline this across all sectors, with most of the respondents – whether working predominantly in formats, unscripted or scripted – finding that their revenues are likely to be hit by Covid-19 despite the demand for finished product from content-hungry buyers in all territories.
The pandemic has, of course, come at an already turbulent time for the international business, with the launch of US studio-backed streamers such as Disney+ HBO Max amd Peacock squeezing the content pipeline as they seek to go DTC.
The effects of this can be positive for distributors, with the vast majority of non-affiliated broadcasters and streamers requiring content from a smaller pool of suppliers.
Certainly for those with finished product, the current climate – aided and abetted by Covid-19 – means there are huge opportunities for those with the right IP, as Cineflix Rights’ CEO Chris Bonney pointed out earlier, explaining that his company had seen some “significant sales”, not least that stand-out deal earlier this year that saw Apple TV+ snag Tehran.
Elsewhere on the scripted front, crime drama remains a best-seller from a genre point of view, but the future looks uncertain for the business with almost 90% of respondents admitting that greenlights on deals had been delayed. With drama so fuelled by multiple finance partners, those delays will continue to be felt for the next 12 months at least.
Unscripted-focused sales firms have also been buffeted by the pandemic, although some have been able to adeptly sidestep the worst by producing quickly in innovative ways to ensure revenues continue to flow, albeit at a reduced rate on previous years.
Those in the formats business have also worked hard to adapt, mainly by focusing on existing clients and delivering ideas that are proven and that can be produced within the current restrictions. Those in the kids business, perhaps because of its animation focus, have fared better than most, but reflecting the distribution industry as a whole, there remain major concerns over the next 12 months.
Many have turned to online distribution as one way to drive new sales, and despite numerous quotes of enthusiasm around the return of physical markets, the 2021 events calendar will likely be anything but typical.
For distributors of all genres, that looks likely to mean more risk averse buyers and a necessity to deliver more agile thinking to survive whatever lies in store in the next 12 months.
Analysis: Tim Westcott, Omdia
For a business that exists to a large extent on contacts and relationships, TV distribution has faced a challenging year adjusting to the new normal. The year 2020 increasingly feels like one where time has slowed down. Most would have thought that by this time of year we would be heading down to MIPCOM to catch some autumnal rays of Mediterranean sun and reminisce about the bleak spring days of lockdown.
However, the remote working era is still with us for some time to come. That in itself is likely to be a problem for some businesses whose resilience has already been stretched to the limit over the last months. Some countries are keeping furlough and financial support schemes going while others have already started winding them down, which will exacerbate the differences between distributors who are experiencing good or bad pandemics.
It might be no surprise that half the respondents in TBI’s survey reported a decline in revenues from scripted, but it’s also no surprise that 12% saw revenues increase up to 25%.
Demand for entertainment content is strong. Linear and online channels are still buying, and thanks to production shutdowns (and the suspension of live sports), buying more (even the acquisition-averse US networks are dabbling in overseas content this year). Consumers are also hungry for news and information.
With limited visibility about when the health crisis will end, distributors are going to need not just good content and good contacts, but a lot of stamina.