Buying TV Programs Is Hard … Or Maybe Not?

Not too long ago, The Wall Street Journal ran a story titled “Buying a Vehicle Has Gotten a Whole Lot Harder.” The changed business model for purchasing cars was attributed to the pandemic. The question now is: Has buying film and TV content become just as hard? And if so, why? Due to pandemic aftershocks? Due to the advent of streaming? VideoAge contacted 13 acquisition executives from 11 countries to find out.

The Journal article offered five ways that buying a car has changed, and four of them could apply to content buying: 1) Slim pickings, 2) Higher prices, 3) Fewer lease deals (or, in this case, fewer creative deals), and 4) More expensive used cars, which, for our purposes, could be changed to “More expensive non-exclusive deals.”

“I actually don’t think licensing movies or series is harder than in previous years,” said Horan, director of Broadcast and Acquisition for Ireland’s RTE. “What is harder at present is finding new U.S. programming because of the writers’ and actors’ strikes. This means we buyers are looking across other territories to source English-speaking drama and comedy.” He continued: “After a couple of years of keeping programming to themselves for their own On Demand services, the [major U.S.] studios are making this material available to us again. And they are offering (in the main) the digital VoD rights we now need to accompany our linear rights.” However, he admitted, “It is true to say that much of what we are now being offered is non-exclusive. In that case we study what other platforms it would be on, and make a judgement call.”

According to Peter Andrews, head of Programming for SBS Australia, “Audiences have never had so much content to choose from, but securing great content for your audience as a network has never been tougher.” He also explained, “In the competitive market, fuelled by the rise and proliferation of streaming platforms, and content deals often tied up with studios, it’s about working smarter.” He concluded with a message: “It’s important that producers and partners understand what we’re trying to achieve, are aligned with that, and ultimately want to be a part of it.”

Mike Sneesby, CEO of Australia’s Nine Net-work, on the other hand, provided the reasons for the return of a more traditional business model: “[Because of] the evolving landscape of content creation and distribution, content creators and studios looked toward direct-to-consumer distribution over licensing to retain greater control over the commercialization of their content. This created a period where content supply became more limited for networks that relied on licensed content and with this came upward pressure on pricing.”

He then explained: “Building scaled distribution through direct-to-consumer streaming has proven to be challenging and very costly and in many cases content creators and studios have realized lower returns than the traditional models of licensing to third parties. Today we are seeing a shift back to more traditional distribution and licensing as well as hybrid distribution models and business partnerships.”

To Maria Carola Arze Torres, an independent acquisition consultant who has held previous posts at Bolivia’s Red Uno, ATB, and Cadena A, “Streaming affects acquisitions due to the fact that the audiences have been more selective, and now they decide where and when.” But she indicated other problems, as well: “Content acquisition has become a more complicated task since there are many variables to consider [including] the economic situation in our country, and the fact that investment in the few timeslots devoted to canned content is subject to obtaining low prices, which restricts the options to acquire more successful content and new releases.”

Similar problems were experienced by Pedro Lascurain, Content Acquisition director at Mexico’s TV Azteca, “Prices are much higher than before. This is due to the fact that platforms are not doing well (at least in Latin America) and the studios are raising the product prices to compensate for their losses. For us it is becoming very difficult to close new deals with them. Plus, there is very little good new product, so we are acquiring many reruns and still they are more expensive than three years ago. We are looking for new distributors around the world to see if we can get good product for better prices.”

Even territories that have traditionally had to be creative in their buying strategies are experiencing more challenges. Dianne Bissoon, founder of Cable & Wireless’ LimeTV, which covers 16 Caribbean islands, had this to say: “It’s expensive and very difficult to find new, unique content. Even older library titles and series have become super expensive post pandemic. In addition, the market seems to be saturated with documentaries and docu-series. During the pandemic this genre would have been inexpensive to produce and yet it is still expensive — even for non-exclusive rights. I have found that post-pandemic audiences are looking for more entertainment, action, fantasy, and comedy titles. However, with a shortage it’s become very difficult to become creative in doing such deals. The rise of streaming and FAST channels also makes it very challenging in the linear space. The increasing costs of live sports content have also driven up the demand and cost for sports documentaries.”

Moving north to Puerto Rico, Jimmy Arteaga Grustein, president of Programming, Pro-motion and Production at WAPA-TV, reported: “Unlike the vehicle market, today the situation of our industry is different. The studios have found that the [streaming] platforms were not as efficient as they were projected to be and have slowly begun to restore the sales relationship they had before 2019.” However, Arteaga added, “Acquisitions of movies and TV shows became more difficult before the pandemic when the platform race began. The problem for the studios today is that on our side of the coin, as in the ’90s, free-TV had to increase local production with the effectiveness of ratings and corresponding [ad] sales, and the cable channels started with their own pan-regional productions. The traditional business knew how to survive.”

He continued: “Today the problem no longer is necessarily the lack or excess of available product, but rather survival against streaming. Cable channels are the ones that have been most impacted since free-TV still has the benefit of being local.”

He continued: “However, with the appearance of multi-viewing, the new generation hardly sits down to watch television as before, which has had an impact on free-TV. Finally, the FAST channels is the race of the moment, but we will have to wait to see how this new wave that not everyone understands well, develops. Different from the automobile market, ours has evolved and changed so fast in the last years, sometimes back, and sometimes forward. The next two years are going to be decisive for our industry.”

Going further north to the U.S. mainland, Doris Vogelmann, VP of Programming and Operations for the Doral, Florida-based V-ME Media, gave this analysis: “The acquisition of film and TV content has become harder. I attribute this to the increase in the number of companies that are acquiring rights.”

She continued: “Business has changed. Today, many programs are acquired on a non-exclusive basis. For some players not having any exclusivity or holdback doesn’t help differentiate themselves from the rest. But accessing this exclusivity comes with a price tag that might be too high for a smaller channel or platform to pay.”

She went on: “With the proliferation of FAST channels and many platforms acquiring license fees with revenue share models, distributors and producers find themselves in a situation where they need to figure out how to monetize content. For this reason, distributors try to hit the big players first, looking for the big bucks they can provide for exclusive rights for all media, and in some instances, with worldwide as their territory. The content that doesn’t make it in this first round is available for the medium and smaller players whose budgets are not major, so the negotiation is tougher and sharing the same content on a non-exclusive basis becomes an easier way for distributors/producers to recoup their investment.”

From New York City, Max Einhorn, SVP of Acquisitions for FilmRise, saw things more positively: “Buying film and TV content has indeed faced challenges, but it’s not directly comparable to the difficulties in the vehicle market,” he said, pointing out that “the auto industry has grappled with supply chain disruptions. In contrast, the entertainment industry doesn’t face such supply chain issues. As of now, [even] while there’s an ongoing WGA/SAG strike, the volume of quality content has been growing exponentially thanks to digital production.”

Einhorn continued: “Unlike the rising costs in the auto industry, the real cost of producing content has significantly decreased. This has lowered the barriers to entry for content creation. While the budgets of TV series and blockbusters have grown, the creators’ economy and unscripted television ensure a steady supply of diverse content, at a fraction of those costs — and their audiences are loyal.”

He further explained: “The industry is facing challenges, and many consumers are finding it hard to maintain multiple SVoD subscriptions. This has led to less competition and a potential slowdown in content pricing. The AVoD and FAST market, on the other hand, is maturing. However, while it seemingly promised a gold rush for content owners, the reality is setting in that it’s mainly a revenue-sharing model that has its own vulnerabilities. Only certain kinds of library content thrive, while others face challenges to get merchandising and thus monetization. Unlike the auto industry, where there’s a scarcity and sustained high demand, there’s an abundance of content and less demand, with many studios and streaming services writing off content from their books.”

Einhorn also noticed, “There is a vast reservoir of unscripted content and platforms that are Creator-first, like YouTube, which can attract even more market-share of audience’s content viewing sessions.”

“In conclusion,” he stated, “while both industries face challenges, the nature and reasons for these challenges are distinct. The entertainment industry’s dynamics are shaped more by technological advancements, market consolidation, and consumer preferences than solely from external supply chain issues.”

For Maurizio Colombo, head of Programming and Acquisition Planning for Italy’s Mediaset, “Buying film and TV content for Italian free-to-air television has become harder, and the causes can be traced back to two factors: the pandemic aftershock and the advent of streaming. At the beginning of the pandemic, the stoppage of film and television set production caused a drastic decrease in available product.

“Subsequently, the growth of streaming throughout the pandemic has shifted almost all production to OTT services, limiting the access to purchases for free-TV broacasters. Less product also means higher prices.” In addition, Colombo believes “that the creative offer has grown but it is more often than not an exclusive prerogative of the OTT, and this makes it not accessible for free-to-air acquisitions.”

Tarmo Kivikallio, head of Acquisitions and Commissioning for Finland’s Yleisradio, was more upbeat, pointing out that “[It] is difficult to compare the TV business to the car business, but from my point of view the business is in turbulence. We have reached some kind of peak and from now on it will be a survival game for some players. Buying TV content was very difficult after the pandemic, but right now the competition is not that fierce. It seems that the market in Nordics is shaping into a new position. Prices have gone up but I am quite sure that this development has reached the peak for now.”

Manuel Alduy, head of Cinema and Inter-national & Digital Fiction for France Télévisions, had this to say: “The post-pandemic situation is quite different for film and fiction acquisitions in France and I guess in Europe as a whole.” He then explained that “the streaming sector has become a key influencer of the entire market. In 2021/2022, we observed a reduction in U.S. content available because of the streaming growth. In 2022/2023, the situation changed again. Some streamers faced difficulties and more content has been shopped to third parties, including SVoD originals.”

Alduy went on to further explain, “The traditional L.A. Screenings are not the sole moment to discover new series. European screenings happen every quarter. For example, Series Mania has become a key business gathering. TV content production [in Europe] is booming and distributors try to pre-sell increasingly. This is one of the consequences of the [U.S.] reduction of film and series output deals in Europe, especially in France.”

Finally, he said, “broadcasters are less predictable. It can be fierce or absent. Ad-supported broadcasters suffer from the advertising downturn, public media services have limited budgets, and streamers are revisiting their content spending structures all the times. This complicates the business for everyone — buyers and sellers.”

Audronė Šepetė, who served as Acquisition manager at Lithuania’s LR Television until last month, said: “As a public broadcaster, we are facing some issues with acquisitions and can’t find solutions. It is hard to license the content for FVoD platforms for popular programs. Either they are not available for licensing at all or the prices are too high. In the recent past we noticed that distributors are learning to create package deals, which leaves us either with some of the content that we were not planning to buy in the first place or without the programs we wanted.”