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Netflix and Amazon ‘not leading to more upfront money’ for producers

The advent of well-funded global content buyers such as Netflix and Amazon is not translating directly into more money being available for small and medium sized producers and in some respects it may be more difficult to finance projects still in development, according to film and TV producer Aleksandra Bosnjak, who will be speaking on this topic at the forthcoming TV Connect event in London.

“There are more sources of financing out there in the playground. Outsiders would definitely think there is more money and more buyers – with very deep pockets to finance your project,” Bosnjak, producer at Adriatica Films and a former strategic planning manager at Viacom, told DTVE in an interview ahead of TV Connect.

“However, this doesn’t necessarily mean there is more money, because content is a high risk business. Even Amazon and Netflix, if they acquire a project, will not give you the money upfront. The money is spread over four to five years, so if you plan to use that to finance your project you have to calculate the interest rate, and then it becomes very difficult to put the financial structures together, especially during the development phase of the project,” she said.

Bosnjak said that even global players like Netflix are taking a calculated risk with projects, so even if they acquire something they will calculate their spend against the expected subscriber growth as a result.

“It is not much different in terms of risk management from the buyers’ point of view. Yes, there is more money, but it doesn’t mean it is easier. In fact, in some cases it may be even more difficult, unless the story is already filmed,” she said.

Bosnjak said that small to medium producers looking to do globally successfully content need partners. Projects need typically three or four partners and pre-sales deals, ideally with “talent attached” to the project, she said.

“The distribution challenge is always there. Even if you have a good story you need to have partners. Partners are how anything happens in film.”

Bosnjak said producers nevertheless are increasingly looking direct to distribution platforms to help get projects off the ground, and added that she believes social media platforms such as Facebook will play an increasingly important role.

“Ideally your project is backed by one of the big super-independents in the US or a studio and they take care of everything and the revenue will trickle down. But increasingly we find ourselves going direct to platforms and there are more of these emerging. I strongly believe that social media players will be big in the world of distribution. I can’t envisage a Facebook not tapping into its huge subscriber base and using it as collateral to back some of the content that resonates with millennials and younger audiences that, frankly, do not watch much TV. It is really that element that will play an important role in the future of content distribution.”

Bosnjak said that fragmentation of audiences was having a negative impact on advertising as a source of revenue. She said that in the future content will have to take into account the context of how it is consumed – the level of attention given to it and the type of devices that it is viewed on, for example.

“You may be increasing programming spend but not getting a return in terms of ad revenue. That is why we have seen big guys’ contracting in terms of their profit. For me the big challenge comes form social media because that is where the younger audiences are spending their time. We have to adapt content to attention and fragmentation and that will produce new formats and, possibly, more money for smaller producers to get involved in very innovative formats.”