A year ago we headed into the Newfronts with the same enthusiasm for the biggest digital content market of the year as we will this year (stay tuned for Power-Sixer and Dealmakers news!) In all, VideoInk attended and covered 22 presentations last year. And looking back at our coverage of the programming announcements, there were a lot of stellar formats that emerged from those presentations.
However, the biggest thought that I walked away with, and that has stuck with me over the last 11 months, is this: Of those 22 presentations and nearly 200 formats that were screened, is there a matching buying appetite and/or financial ROI to merit that volume of content? Or are programmers still oversaturating the marketplace with a surplus supply that either drives down price or drives down the sense of urgency to buy, produce, and distribute? And the question that looms every year — is the investment into the Newfronts even worth it?
So heading into this year’s Newfronts season, while the talent agencies, production companies, digital programmers, and media companies are all abuzz and making sure the slate announcements and product news are buttoned up, I decided to take a look back at last year’s presenters and see how they performed.
Surprisingly, most of the digital programmers and distributors actually produced and released their slate, with AOL leading the pack. (Check out our Newfronts “Cheat Sheet” if you’re curious as to whose shows actually aired.)
And if there ever was a signal that the streaming video space is progressing nicely and moderately healthy, this is certainly it, but it also signals how far the space has to go if the measure of success is simply whether the series saw the light of day rather than did audiences like it enough to warrant a renewal?
As the space evolves and matures, the real benchmark of success should shift towards the latter and judged by not only if the series is produced, but also that it is performing so well that it receives renewals or significant syndication and windowing deals.
“Most of the shows put into shopping agreements last year didn’t move to series. And those that did are not likely coming back. Just like any ‘native’ campaign, they fall victim to campaign-based spending cycles, not a merit-based model where the best shows — done at the right price — thrive,” says Eric Day, principal at Trium Entertainment, which has produced multiple projects for TV and digital, including networks such as CBS, TLC, AOL, Yahoo, Xbox, and StyleHaul, as well as various big brands like Delta.
“Making a Scene with James Franco,” which Trium produced for AOL and was announced during the company’s Newfront in 2014.
And so the industry still needs to shift closer to the television and studio model in that way, where intellectual property choices need to be intelligently made, renewed, and franchised, rather than blindly celebrating what shouldn’t even be considered a “win.” For that to happen, all platforms will need to embrace performance transparency and adapt to a standardized “box office”-like measurement. (That’s another column for another day.)
need the Newfronts. These are the companies putting real skin in the game by committing to and deficit-financing content. It boils down to the business models. On one side, the heavily brand-reliant shopping agreements and on the other, the deficit-financed content.
“There are those platforms that want to be in original content in a much deeper way but don’t necessarily have the risk appetite at this point either because they don’t have scale and reach or they don’t have the traction with the brands to ensure that, to some degree, they will be able to recoup the investment,” CAA’s David Freeman tells me.
The good news is that the industry is reaching a tipping point driven by Netflix and its approach but also supported by the agencies, like CAA, which are actively driving deals that ensure good content gets made, finds a distribution home, and hopefully cultivates an audience that proves a franchise IP product in digital is not only possible but repeatable.
“We try to steer our clients away from [shopping agreements]. The whole point of playing in digital is to get a better deal and to [optimize for] speed to market,” Freeman notes. Speed to market, creative control, and ownership are, according to him (and probably the rest of the industry), the gold-nugget wins for both sides of the coin.
“All of the [various platforms’] models don’t always allow [their content] to be made, but we’d rather not see our content sit on the shelves,” he says.
So, let’s get back to the answer, shall we?
Does the appetite match the offering and deliver ROI?
Seems the answer is no. According to one executive at AOL, a majority of their shows were pre-sold ahead of the Newfronts, a practice that is not uncommon and is becoming a standard. So from that perspective the Newfronts are more of a chest-beating exercise rather than an actual transactional driver.
And the second part of the question:
Are the Newfronts worth the investment?
The short answer: yes, but primarily for those companies not committed to producing the exact slate presented and those not tied to a premium price point, creative control, or ownership rights.
“If the major digital outlets don’t start putting serious skin in the game, at the very least their ability to drive a premium price for their inventory will be diminished. And that premium price is absolutely still necessary to support most single-window digital video content,” says Eric Day.
“Collectively, as an industry, we have our work cut out for us until we’ve changed reality.”
But as Freeman, our resident industry hopeful, reassures us: “There are more buyers. There are more platforms. And the appetite is increasing. This shows a healthy progression and overall we are looking at healthy growth in the video space” driven largely in part by the Newfronts.