
TORONTO – As both a broadcaster and a premium content producer with a 4500-episode library of kids shows, Corus Entertainment, while facing many challenges, is still poised to flourish in an ever-changing media landscape, according to CEO Doug Murphy.
“Premium branded content has never been more valuable than it is today,” he said, speaking to the CTAM Canada leadership conference on Thursday in Toronto at Corus’ Queen’s Quay headquarters, and with so many more ways to monetize content, “we’re beginning to get feedback loops in ways that we’ve never had before,” leading to more TV show popularity and increasing international sales.
That means it’s “critically important that companies such as Corus continue to invest in content,” he continued. “That’s the first stop on the bus for value for shareholders.”
The company plans not only to ramp up its kids content production (it employs over 300 animators in the fourth floor of its HQ pumping out content for its Nelvana division), but also to begin making and controlling the global rights for all of its content, beginning with the flagship W network. Murphy says by the end of the year it will own the global rights to 75 hours of new, original content made for W.
Corus has also already begun buying all the content windows for its acquired content, too (it controls all the windows in Canada for Nickelodeon content, for example, including the OTT, or Netflix, window). All of this will fuel brand new TV Everywhere apps for all of its broadcast brands, beginning on June 29th with the launch of the Treehouse app, followed by YTV in the fall and others by the end of the year. The Treehouse app will allow parents to live stream the channel for their little tykes and even download-to-go, if they wish, said Murphy.
However, when it comes to new apps of some of the company’s American brands crossing the border, the CEO added he doesn’t see his most important pay-TV content supplier, HBO, launching its OTT HBO Now service in Canada any time soon. “We think they take enough money out of Canada between Bell and Corus that they don’t need to worry about trying to go OTT in Canada. They’re better off to tackle Asia or other bigger, emerging markets.”
On Corus’ own specialty and pay side, however, the popularity of so much premium content means securing the rights for its TV brands is getting continually more expensive, especially as it now bids against Netflix – and shomi and Crave TV, too.
“It’s a complicated world we live in. We’re partners, we’re competitors, but when it’s all said and done, content costs are going up and we need to find ways to make sure that premium content, the best content, yields economic returns for everybody,” said Murphy. “As for Netflix, its content costs are growing faster than their revenue is right now… that’s a fundamentally scary concept when you think about it.”
“As for Netflix, its content costs are growing faster than their revenue is right now… that’s a fundamentally scary concept when you think about it.” – Doug Murphy, Corus Entertainment
All these new ways to make and distribute TV means dealings between producers and broadcasters are also transforming and that’s why Murphy said he is pleased the CRTC decided in its TV Policy Review to remove Terms of Trade as a condition of licence for broadcasters (starting next April).
“I’ve been very vocal about this Terms of Trade issue. The CMPA put together a template to force us all into the same kind of deal structure for making shows and it’s ridiculous to do it that way in an industry that’s changing so quickly. Every deal needs to be like a snowflake,” Murphy explained.
“There are a lot of producers in this country who have been dining out on the system for a long time and they’ve got excessive producer fees per episode, they make a ton of money, they’ve got big Muskoka mansions and such and those individuals, god bless them, they’ve done well when the system was what it was – and they need to shift.
“We were pleased with the CRTC’s decision to basically dispense with the Terms of Trade. There are a lot of young producers coming forward who are saying, ‘I’ve got an idea for a show and let’s make this business work for all of us. I’m happy to share in economics internationally. I’m happy to let you distribute it for me, all I want to do is make a great show and it’s a win-win’,” he said.
Another portion of the business which must also continue to shift, said Murphy, is advertising. While video consumption has never been higher (and TV is still the best medium in which to reach a mass audience), it’s also never been more fragmented. “We have to figure out how to measure all of this consumption of video (on myriad platforms and devices) otherwise it’s a leaky boat and the advertising business that supports our business will suffer accordingly,” said Murphy.
Plus, “the industry, ad agencies, clients and TV programmers need to make better commercials. Why are we always making 30-second commercials? Why not 10-second commercials? Why not 5-seconds? What about longer commercials?” he added, pointing to Ralston Purina’s Dear Kitten campaign as an example of better, more entertaining, advertisements.
Murphy also added the company is making plans to build advanced advertising into its systems, too. “There’s no way we can stay a one-way street,” he said. “We have to become a platform company with two-way communication and we’re looking at that right now.”