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SELLING SHORT - The Market For Digital Storytelling Has Never Been More Robust... Or More Confusing

Posted By Chris Thomes, Tuesday, November 21, 2017

The wave of original programming targeted at digital and social platforms continues to gain steam. Social networks like Twitter, Snapchat, Facebook and even Google’s YouTube Red subscription service are diving headfirst into exclusive original streaming video content. And they aren’t the only buyers. The list of potential backers of shows and movies in the digital space has grown exponentially over the last few years. The list includes telecommunications giants such as AT&T and Verizon, traditional linear TV networks that are looking to broaden their offerings to include digital series, legacy and digital publishers such as Time Inc. and Refinery29 and, of course, streaming services from the 800- pound-gorilla Netflix to smaller operators such as Fullscreen and its in-house wiseacres Rooster Teeth.

Funding in this digital space comes from an ever-shifting crowd of buyers, but one new player bringing lots of poker chips to the table has some serious reach—Facebook. The social networking giant is talking to Hollywood studios and agencies about producing TV-quality shows. In meetings with major talent agencies including Creative Artists Agency, United Talent Agency and William Morris Endeavor, as well as with major networks, Facebook has indicated it is willing to commit to production budgets as high as $3 million per episode, people familiar with the situation say.

While that’s the price range of high-end cable TV shows, Facebook is also interested in more moderate-cost scripted shows in the mid- to high-six-figure per episode range. And you can bet the company will be aggressive about trying to own as much of that content as possible.

The push for TV shows is part of a two-track effort at Facebook to up its game in video and target the tens of billions of ad dollars spent on television.

Snapchat is also playing in this space. Last year, Snap introduced “Shows” to its Discover platform. These premium, original, TV-like series are produced exclusively for mobile by leading TV networks and entertainment studios. These shows can be based on existing IP, giving networks the chance to reimagine classic TV franchises for a whole new audience, or they can be original new concepts, built directly for mobile. NBC, ABC, CBS, Discovery Networks, Turner, Scripps Networks, Vertical Networks, VICE, and MGM Television are among the networks and studios working to develop and produce Shows for Snapchat.

Even Apple is getting into the game and is reportedly investing $1 billion in original content efforts next year. They recently plucked Sony TV veterans Jamie Erlicht and Zack Van Amburg away from the studio in June and have taken over video production responsibilities from the Apple Music team. The execs have already held meetings around town to find shows to acquire.

With all of these buyers getting out their checkbooks, several companies are looking to cash in on that market demand. New Form Entertainment, a company backed by Discovery and filmmakers Ron Howard and Brian Grazer, is looking to do just that, aggressively developing and selling a variety of programs. They know the space is highly competitive, with everyone from independent digital studios to legacy print outlets to distributed-media publishers furiously jockeying for position.

Another new player, helmed by digital entertainment veteran Larry Shapiro, is Ensemble Studios, a next-generation digital management production company, focusing on emerging artists. Shapiro’s mandate is to capitalize on the wave of funding to champion writers, directors and artists who have successfully built audience and created original IP.

Shapiro explains, “The filmmakers that I work with are native to the platforms that they are being distributed on. Every medium creates its own stars, so the filmmakers who grew up on digital are the ones I like working with.“

To that end, Ensemble only looks to produce projects they are passionate about and where they feel a strong affinity for the subject matter. As far as funding, they look for independent financing or buyers who give the most freedom to the producer.

All this competition between producers really requires compelling marketplace differentiations in order to gain an upper hand. New Form’s Chief Creative Officer, Kathleen Grace, explains, “What sets New Form apart is the quality of our storytelling and the fact that our content is guided by data-driven audience insights. Through measuring the potential of specific audiences and taking chances on emerging talent of all backgrounds, New Form is able to develop narratives that millennials want to watch and won’t find on TV. In addition, our ability to create for specific platforms, including digital-first platforms [e.g., YouTube Red and Fullscreen], brands, premium SVODs and linear television networks, allows us to experiment with new formats and find the best venue for our shows.”

While that approach may be giving scripted programming a leg up, most of the short form currently in the market still consists of talk shows or other non-scripted lifestyle programming. To really hold on to an audience and build a loyal base of viewers, the content will have to be more than commoditized social material. A lot of buyers want premium quality storytelling, which means that skills like putting together a writer’s room, locking in showrunners, and generating season-long arcs are becoming as important in the short-form space as they have been in traditional TV production.

Snapchat has a very different value proposition to partners in this competitive landscape. Their shows are an extension of traditional TV, not a replacement for it. Snap believes their programming can help traditional TV networks reach new audiences who many not be watching their linear programs. The company has decided that building a core, loyal audience for their TV partners is critical to building their own IP brand equity and a long-term, sustainable model for producing mobile TV.

Similarly, New Form is also helping traditional players find new audiences. As these players look to reach younger, mobile audiences, Grace’s team may be the secret weapon they need. “Currently,” she states, “New Form is focused on making original content for existing franchises (like MGM’s Stargate Origins) and new IP (almost all series released to date), not generating ancillary content to network shows. But that doesn’t mean we won’t start looking into these kinds of partnerships in the future.”

That may be good news for traditional media companies, who have seen consumers shift their media time away from live TV, opting for services that allow them to watch what they want, when they want. This includes a massive migration toward original digital video such as YouTube Originals, SVOD services such as Netflix, and now originals on social platforms like Facebook.

But for the producer, wading through this complex marketplace requires more than simply understanding the funding model. The work approach with the buyer is also complicated. Facebook has been described as being “hands off” with the short-form content it’s buying, although the social platform is more involved with longer-form shows. Snapchat, on the other hand, tends to be much more closely involved, including piloting shows before approving them for a full season. They are also known to weigh in at all stages of production, from brainstorming ideas to graphics. Facebook, contrarily, may order full seasons of short-form shows without ever piloting them and may leave producers entirely to their own devices during the show’s development. Ensemble has its own approach, focusing on a leaner production model that is closer to the filmmaker, de-emphasizing development/executive teams that they fear can dilute the creative process.

With all this demand for video, it would appear that there has never been a better time to be a digital entertainment producer. But while the market for digital entertainment content is healthy now, it’s also volatile. There are no guarantees that some of the social platforms currently seeking shows will be willing to pay for them in a few years’ time and there are no guarantees that some of the streaming platforms commissioning or licensing series will even stick around. In fact, in the three years since New Form’s launch, the digital ecosystem has changed dramatically. Platforms that were once hungry for short and mid-length series are now looking for projects that can help them compete in an increasingly competitive streaming environment. That means more traditional-length series with established stars and creative talent attached. YouTube Red, for example, recently tapped Naya Rivera and Ne-Yo to star in a Step Up revival executive produced by Channing Tatum. Cable networks, meanwhile, have also begun to look to digital to mine projects for linear distribution, with TBS recently ordering a first season of the New Form-produced animated series Final Space.

Despite the challenges inherent in the space, some producers maintain that even if one major video buyer drops out—Yahoo, for instance, made a lot of bets in entertainment shows before scaling back, while NBC Universal’s Seeso went big before it announced its demise in August—there is always a new buyer to take its place. New Form acknowledges the churn but believes they have a smart approach that can help them weather market shifts.

“Audiences are moving and will continue to move to digital platforms,” Grace asserts. “New Form breaks through the clutter with performance-based marketing and premium storytelling driven by data. Our production and development process allows us to be incredibly agile in this rapidly changing media landscape, taking advantage of trends and ideas in real time—meaning we are making content that has never been made before. And lastly, we give our creators storytelling freedom to ensure the content is authentic, thought-provoking and diverse.”

Ultimately these new buyer/distributors are looking for shows that will help attract audiences over time, and the challenge of staying on top of what audiences are looking for is nothing new for producers. It is an age-old problem, regardless of format or platform. But as Grace suggests, one new tool may hold a critical key to success in this new market—data. It’s the key to understanding one’s audience, and now more than ever, there is an abundance of data at the producer’s fingertips. Depending on the platform, that information may be unique. Snapchat, for example, is a closed system within an application. They do share data with their partners, but it’s proprietary and their viewers’ behaviors are unique. Facebook is completely different, trying to reach everyone, everywhere. But between daily active users, daily unique users and video views, the metrics are starting to have some standards everyone can rely on, even if context around usage is different.

Shapiro agrees and contextualizes the value of data all under the banner of engagement: “The use of influencers with big audiences will only get you so far. You can’t have one-offs if you are working with creators who have a footprint, and it will be hard to change the entertainment behavior of their audience. One thing will never change—we as a species like to be storytellers. Since cave drawings, it has been part of our culture. But we sometimes forget that it is a two-way exchange. Today’s content is about stories that create conversation. Some say content is king, others say distribution is king. I’m a fan of the idea that engagement is king.”

This data-driven, engagement-above-all approach for content development may be the producer’s best tool yet. If they are lucky enough to land funding from one of the new exhibitors, readiness to listen to and act on the viewing data may help guarantee another season because the ultimate test of longevity may not rest solely on great programming. As Netflix has proved, you also need to have a great discovery platform and tons of data insights. With so much competition, getting a viewer to find your content may be the biggest challenge producers face today. But armed with data-driven, high-quality programming, producers can be ready to engage viewers as fully as possible, whenever—and wherever—they show up.



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