CANADIAN BROADCASTERS HEADED to the Los Angeles Screenings this week will be buying rookie U.S. shows much as they have in the past: By choosing possible primetime hits via output and multiyear deals with Hollywood studio suppliers.
But in among the horse-trading for new American dramas and comedies this year will be a new battlefield for Canadian networks needing new revenue streams to outrun falling conventional TV ad sales: the fight for digital platform rights.
And even before top players like Bell Media, Shaw Media and Rogers Media do their studio rounds this week to view new pilots on offer, there's already a clear winner: Hollywood content owners.
Facing a fast-changing future where more viewers are going online to view popular TV shows, studio suppliers know how much the Canadians need digital rights for U.S. network series to meet viewers where they are. "It would be ideal to be able to acquire all of the rights, including conventional, specialty and online/streaming, so that these series are able to reach as many viewers as possible across multiple platforms," Hayden Mindell, vice-president of TV programming, content at Rogers Media, said.
The key word here is ideal, because the Hollywood studios control the food chain. And where TV's loss may mean digital's gain, content owners want to control the market in order to reap as much profit as possible. They've already sold a raft of streaming rights to new and catalogue series to upstart streamers Shomi and Crave, which are battling Netflix in Canada.
The studios recognize the Canadians need their expensive American shows to stand out in an increasingly crowded TV market. "We're trying to make sure we're acquiring enough rights that we have the ability to engage our audience anywhere we'd like put the product across any platform – TV Everywhere, online," Christine Shipton, senior vice-president and chief creative officer at Shaw Media, explained.
"We need to be able to have that flexibility… Audiences expect to see properties in different places for different reasons. So if we're buying (a show), we need to get it to them," Shipton argued.
But Phil King, Bell Media president for CTV, sports and entertainment programming, cautions against vacuuming up digital platform rights just so content can play anywhere because those rights are costly and could well have you dropping silly money on unproven content. "You can buy the rights like that if you want, but it's risky because now you're asking for different rights," King said.
"You're making an enormous bet on an unproven show. It's already a big bet for what we pay to put it on CTV. Now you need to double down and say, alright, it's going to be such a monster show, when picking hits is not easy.” – Phil King, Bell Media
The Canadians traditionally start with acquiring conventional TV rights, then bargain to put that content on specialty channels, or online and more recently on a streaming service for catch-up viewing. "But you're not paying the same price to get it for linear. You're buying out windowing strategies that the studios need," King said.
Traditionally, that meant syndication dollars for the studios, but at least then Canadian broadcasters were picking up a TV series after 65 or more episodes, when you knew whether what you had would work with audiences, or was a dog. "You're making an enormous bet on an unproven show. It's already a big bet for what we pay to put it on CTV. Now you need to double down and say, alright, it's going to be such a monster show, when picking hits is not easy," King said.
The Canadians know that well enough. Each year they go down to the Los Angeles and scratch their heads during marathon screening of U.S. network pilots to divine which rookie shows are potential hits with viewers, and which face an early chop. Then just as quickly (and after spending hundreds of millions of dollars) they fly home for the Canadian upfronts in Toronto in early June to tout all their newly-acquired U.S. shows to advertisers as potential prime time hits, each and everyone of them.
"If it was easy, everybody would have giant shows," King said.
But, despite his caution, does he see the market among Canadians for digital rights to American shows getting still bigger and hotter because everyone feels compelled to battle Netflix Canada and cord-cutters? "Perhaps. And there is some of that going on, for sure. You have Netflix that's hungry for content. So you might be forced to buy digital rights to keep it away from Netflix (in) Canada," King observed.
That's all the more so with streamers globally wanting evermore star-driven and pricey shows in year one, as they don't always wait until the third or fourth year to pick up a series. The goal is finding a platform-defining original show, like House of Cards or Orange is the New Black for Netflix, or a U.S. show like The CW's iZombie that bypassed traditional TV to become available exclusively on Shomi.
"It's an understanding of how much you need to associate your brand with the brand of the show, and not to allow that brand to be popping up everywhere," Shipton said.
To get there, negotiations between the broadcasters and the Hollywood studio suppliers quickly default to the question of holding back the release of an acquired TV series to new market entrants. Those discussions only cause grief for the studios as every new digital platform or technology threatens broadcasters who fear they are shrinking as new media grows.
But equally, new digital market entrant are potential new customers for content producers and owners happy to drive up pricing.
"If you're paying for the exploitation of a title on a platform, you don't want to see it showing up anywhere else because you have the right to it. That's just an evolving discussion with the studios," Shipton lamented.
