July 13, 2021 | by Zoya Lukyantseva

What VoD buyers want: the truth about local players

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Published on Broadcast

Distributors should not pass up opportunities to work with emerging services without consideration, says Riaz Mehta.

Much of the TV industry’s attention this year has been focused on high-profile M&A stories like HBO Max’s merger with Discovery, Amazon’s takeover of MGM, and All3Media’s acquisition of NENT Studios UK. But out here on the content distribution frontline, it’s clear that corporate consolidation is only one part of a complex unfolding narrative.

With global TV audiences increasingly shifting towards SVoD and AVoD as their preferred means of consuming content, what we are witnessing at Allrites is an explosion in the number of locally-targeted on-demand services vying for a share of the fast-growing revenue pie.

Regardless of whether you drill down into the Americas, Europe, Middle East, India, Africa or Asia Pacific, there is a clear trend towards fragmentation, as incumbent players such as  broadcasters, telcos and ISPs jostle for attention with entrepreneurial startups.

Invariably, this latest wave of on-demand players doesn’t have the resources of Netflix, Amazon or Disney+. But in some respects, this can make them more interesting to distributors.

While the global giants have large budgets for original content and are also able to draw on the capabilities of in-house production studios, those local, regional and niche VoD challengers are forced to build their platforms using acquisitions.

With such a wide array of new services launching, it’s inevitable that their specific programming needs vary. But, at the same time, there are some shared characteristics about small to medium sized VoD channels that distributors would do well to note. Here are just a few that the we at allrites have identified since our launch in 2017.

Flexible deal structures

The vast majority of new streaming services are looking for great content at the lowest
possible price, so many will push for a risk-free revenue share model. That isn’t immediately
attractive to distributors, who would rather secure up-front license fees for their content, but
the key thing is not to close down the conversation too quickly.

If a VoD platform looks like a viable long-term partner, distributors should think about ways to introduce deal flexibility (which does not necessarily mean revenue share). Maybe they have archive shows they can afford to offer at a lower price on a shorter-term, non-exclusive basis. At the very least, content owners could use partnerships of this kind to build up data about their shows that might inform future negotiations.

Preference for volume

Most recently launched VoD platforms in markets like continental Asia, India and the Middle East want to hit the ground running with a broad content offering, so they will be seeking large volumes of content.

Typically, they are run by small teams, so they will ideally be looking to do deals with a few select suppliers. Clearly, selling large volumes of content as a revenue share is not that appealing, therefore distributors need to be innovative in their packaging as this can result in significant revenues.

Local first – where possible

Some niche streaming services are seeking to aggregate fans of a particular subject from
around the world, but most new VoD platforms that we are observing via the Allrites platform are local or regional in focus.

As a result, their top priority is usually local-language content or regionally popular shows
(such as Nollywood content in Africa). English-language content is often acceptable, though
beyond this content typically needs to be dubbed or subtitled.

Having said this, some genres of content can work well even if there isn’t a local language
track. Action, adventure, horror and situational comedy are universally recognisable scripted
genres that can be followed by audiences even if they don’t understand what is said.

Exclusivity more important than being first

VoD buyers want content that is unique and impactful, shows that will help them stand out in a cluttered landscape of channels and streamers. For this reason, exclusivity is more interesting to them than whether they secure the first window in their territory.

Licensing a show in its second or third cycle, even for a relatively short run, can provide the
necessary hook to draw audiences to a young VoD service.

Genres and formats

We find that all forms of content are of interest to VoD buyers, but scripted is in most demand. Action, adventure, romance and comedy, in particular, are seen as key to winning new users.

In terms of structure, TV movies and long-running series are popular to create stickiness for
VoD platforms. Quibi’s business model didn’t work, but it had the right idea of short-form
content as there is a growing demand especially as viewers consume more content on mobile

Local tech infrastructure can be a consideration

In high-tech Japan, Singapore, Hong Kong and China audiences snack short-form content on mobile phones while travelling on subways. In emerging African markets, lack of bandwidth means streaming via mobile isn’t always an option – with users often downloading content for later viewing, and there’s a wide range of variations in-between.

For VoD buyers, the choice of content will be dictated to some extent by the local connectivity landscape.

Final thought

Some distributors will think that it’s too time-consuming to deal with new on-demand
platforms on the lookout for low-cost deals. This is where Allrites can help, by streamlining the content discovery and transactional process. The combination of VoD service proliferation and online content marketplaces will, ultimately, help drive distributor revenues and create a vibrant eco-system for content creators and consumers.

About allrites

allrites was created to address the pain points faced by professional content creators around the world to efficiently find the right set of buyers for their content. At the same time, broadcasters gain efficiency and ease in search and discovery of great new TV, film & sports content on a global scale. The digital marketplace also offers a complete OTT solution and content strategy consultancy for new and existing streaming services.

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