INTERNATIONAL www.VideoAge.org THE BUSINESS JOURNAL OF FILM, BROADCASTING, STREAMING, PRODUCTION, DISTRIBUTION December 2023 - VOL. 43 NO. 7 - $9.75 (Continued on Page 14) FAST Channels Everywhere: It’s Easier Said Than Done To explain the FAST phenomenon one could ask for comments from the top operators of these Free Ad-supported Streaming Television channels or just call upon the recently formed FAST Alliance. VideoAge did both. This follows VideoAge’s first foray into the FAST ecosystem for its October 2020 Issue, when we featured an interview with Danny Fisher, CEO of FilmRise, one of the United States’ pioneers of FAST channels, which, although delivered via streaming, are different from SVoD and AVoD in the sense that they have a “linear” mode like broadcast TV (as opposed to an on-demand mode), and are thematic (focusing on such topics as, for example, golf, food, soap, music, horror films, crime films, and game shows), like cable TV channels. In this article we’re reviewing the key elements of FAST (Continued on Page 18) The U.K. has come a long way from TV detector vans seeking out those who hadn’t paid their TV/radio license fees, which, when they were introduced (in 1923 for radio and 1946 for television) funded the BBC, the only broadcast entity in the country, through what is known as a Royal Charter mandate (that remit is due to end December 31, 2027). Many homes had someone peeping from behind living-room curtains in order to spot what everyone had been told was a vehicle fitted with equipment that Public TV License Fees Are Politicians’ Newest Target (Continued on Page 12) The Asia TV Forum & Market (ATF) is conceivably the largest entertainment content market that takes place annually in Singapore (December 5-8, 2023). With the rise of streaming services and the increasing demand for original content, the South East Asia’s SEA Content Industry Faces Challenges My2¢: Pity those trained in TV now facing Viral Media MIP Cancun: Biz at the LatAm TV mart not just for dollars The making of The Godfather movie: No cannoli spared Hollywood’s Writers’, actors’ strikes: The end? Page 22 Page 9 Page 8 Page 4
MAIN OFFICES 216 EAST 75TH STREET NEW YORK, NY 10021 TEL: (212) 288-3933 WWW.VIDEOAGEINTERNATIONAL.COM WWW.VIDEOAGE.ORG P.O. BOX 25282 LOS ANGELES, CA 90025 VIALE ABRUZZI 30 20131 MILAN, ITALY EDITOR-in-CHIEF DOM SERAFINI EDITORIAL TEAM SARA ALESSI (NY) BILL BRIOUX (CANADA) ENZO CHIARULLO (ITALY) LEAH HOCHBAUM ROSNER (NY) SUSAN HORNIK (L.A.) CAROLINE INTERTAGLIA (FRANCE) OMAR MENDEZ (ARGENTINA) LUIS POLANCO (NY) MIKE REYNOLDS (L.A.) MARIA ZUPPELLO (BRAZIL) PUBLISHER MONICA GORGHETTO BUSINESS OFFICE LEN FINKEL LEGAL OFFICE STEVE SCHIFFMAN WEB MANAGER BRUNO MARRACINO DESIGN/LAYOUT CLAUDIO MATTIONI, CARMINE RASPAOLO VIDEO AGE INTERNATIONAL (ISSN 0278-5013 USPS 601-230) IS PUBLISHED SEVEN TIMES A YEAR,. PLUS DAILIES, BY TV TRADE MEDIA, INC. © TV TRADE MEDIA INC. 2023. THE ENTIRE CONTENTS OF VIDEO AGE INTERNATIONAL ARE PROTECTED BY COPYRIGHT IN THE U.S., U.K., AND ALL COUNTRIES SIGNATORY TO THE BERNE CONVENTIO AND THE PAN-AMERICAN CONVENTION. SEND ADDRESS CHANGES TO VIDEO AGE INTERNATIONAL, 216 EAST 75TH STREET, SUITE 1W, NEW YORK, NY 10021, U.S.A. PURSUANT TO THE U.S. COPYRIGHTS ACT OF 1976, THE RIGHTS OF ALL CONTENT DONE ON ASSIGNMENT FOR ALL VIDEOAGE PUBLICATIONS ARE HELD BY THE PUBLISHER OF VIDEOAGE, WHICH COMMISSIONED THEM Pity the journalists trained in traditional TV, who, after the COVID pandemic, have to face a Viral Media landscape that has changed the ballgame, the playing field, and the rules. Page 22 Cover Stories News Features FAST channels are easier said than done Public TV license fees are politicians’ newest target The growth of the Asian TV and entertainment market in SEA 9. MIP Cancun Report: Biz at the Latin American TV market is not just for dollars 12. ATF: Not as big on the market floor as in conference rooms 20. U.S. airlines don’t see themselves in the travel business. Plus, Calendar of events 4. World: The end of the Hollywood strikes 6. World: The changing U.S. TV affiliate business 8. Book Review. The making of The Godfather movie: No cannoli spared
4 World VIDEOAGE December 2023 (Continued on Page 6) year deal at $233 million per year, and an entertainment lawyer in Hollywood calculated that the gains made by the writers sacrificed just 0.091 percent of Disney revenues, 0.214 percent of Netflix revenues, 0.108 percent of Warner Bros. revenues, and 0.148 percent of Paramount revenues. The WGA went on strike on May 2, closing writing rooms across the industry. The strike quickly shut down late-night TV shows and stalled work on scripted television shows and films. Members of the union, which represents 11,500 writers, mobilized to form picket lines outside production houses. Gains for writers include greater insight into how shows perform on streaming services. For example, content that is viewed by more than 20 percent of a streaming service’s U.S. subs in the first three months of release will receive a bonus of 50 percent of the fixed U.S. royalties. In addition, a six-episode series must have at least three writer-producers. And that number will increase with more episodes. Foreign royalties will increase by 76 percent and will be based on a streaming service’s international sub base. Studios must tell writers if any materials they give them have been generated by AI. For the actors, the strike ended when, on November 4, SAG-AFTRA, the Hollywood actors’ union with 160,000 members, received a “last, best, and final offer” from the major U.S. studios. After an initial objection, a few days later the negotiating committee accepted the proposal for the three-year contract valued at $1 billion. Included in the offer were: a wage increase, a new way to determine residuals for streaming programs, protection from AI (specifying consent and compensation), and an increase to pension and health funds. It is now hoped that the U.S. entertainment’s labor sector will find its peace and prosperity. At least for the next three years. It was a drama that lasted 146 days. But finally, on September 24, 2023, the Hollywood writers reached an agreement that ended their strike against the major studios and streamers represented by the Alliance of Motion Picture and Television Producers (AMPTP). The Hollywood actors’ strike ended on November 9, 2023, following 120 days on the picket line. The new three-year deal for the writers includes increased royalties, mandatory staffing for television “writing rooms”, and protections regarding the use of Artificial Intelligence. The Alliance gave ground on staffing issues, as well as new formulas for streaming residuals that would reward success more than the current model. The Writers Guild of America (WGA) values the threeHollywood Strikes: The End www.bomanbridge.tv sales@bomanbridge.tv STAND FB - 02 13 X 60’
6 World VIDEOAGE December 2023 (Continued from Page 4) ued at $35 billion. In 2006, the two companies split, then merged again in 2019 with a deal valued at $15.4 billion. Wells Fargo Bank analyst Steven Cahall valued ABC and Disney’s eight owned affiliate networks at about $4.5 billion. Disney would sell ABC’s local TV stations, but keep the network operation. In this case the studio would be losing retrans fees from cable operators, but still getting revenue from affiliates, plus ad time inventory for national TV sports, while affiliates would be getting the network’s programming. Years ago the payees were the networks, but they stopped paying the affiliates in the late ’80s/early ’90s, when local TV stations were at their peak in generating their own significant revenues. Before that, most TV stations got network compensation in major- and medium-sized markets, and that compensation was also dependent on how dominant the smaller market stations performed from a ratings standpoint. Nowadays, to broadcast national TV shows, the affiliates pay the networks compensation for programming (also called network affiliate fees, or reverse compensation), or at the most have a revenue-sharing arrangement. Local TV stations generate revenue by selling airtime and getting retrans fees from cable TV and satellite TV services. The affiliate system was born with the creation of the TV networks in 1946 since the networks needed local TV stations to cover the U.S. In the beginning, the networks provided affiliates with morning, afternoon, and evening programming (about 60 percent of the schedules). In addition, the networks paid the affiliates and gave them airtime during the networks’ shows to sell locally. Back in September, the Irving, Texas-based Nexstar Media Group and Byron Allen’s Los Angeles-based Allen Media Group were said to be interested in buying Disney’s local ABC TV stations... whenever the studio was ready to sell them, that is. Now, a new question arises: Will Paramount sell its CBS TV network... again? ABC has 240 local TV stations as affiliates, of which eight are owned and operated (O&O) by Disney, and are in key markets such as New York City, Los Angeles, Chicago, and San Francisco. In 1995, Disney acquired ABC for $19 billion, which included the network, ABC’s O&O local TV stations, and the affiliate-relation contracts. CBS also owns eight local TV stations in top TV markets that include Miami and Atlanta. Viacom merged with CBS first in 1999 in a deal valThe Changing Business of U.S. TV Affiliates Approx. 50 x 45’ Drama, Fantasy
8 Book Review VIDEOAGE December 2023 Author and journalist Mark Seal shares a behind-the-scenes look at what went on during the filming of Francis Ford Coppola’s The Godfather in his well-researched new book. From Real Life to the Silver Screen: New Book Explores The Making of The Godfather By Luis Polanco “I believe in America.” The iconic opening line of The Godfather, directed by Francis Ford Coppola, and released by Paramount in 1972, ushers in one of the main strands of the movie: the immigrant experience in the pursuit of the American Dream and the darker underbelly of said dream. As well known, the film revolves around a powerful crime family and the head of the family, Vito Corleone, to tell a devastating story about power, corruption, loyalty, and above all, family. The compelling storytelling, well-crafted screenplay, and the atmospheric cinematography, all contribute to making The Godfather into what is considered one of the greatest movies ever made. But behind the making of The Godfather lies a network of mythmaking, obscured by rumors and ego from studio execs, producers, and talent. In his new book, Leave the Gun, Take the Cannoli: The Epic Story of the Making of The Godfather (448 pgs., Gallery Books, 2021, $28.99), author Mark Seal seeks to present the truth. Maybe because of the movie’s popularity, many topics have been left underdiscussed, overlooked, and misrepresented. With his latest book, Seal pulls back the glitzy veil of Hollywood to deliver something closer to historical fact, with new interviews and thorough research on the exemplary film. Seal has written and co-written more than 15 books. Since 2003, he has served as a contributing editor at Vanity Fair, where his subjects have ranged from scandal and murder to business and Hollywood. In Leave the Gun, Take the Cannoli, Seal chronicles the entire history of the movie, starting even before the film was on the table of possibilities. He begins with the real-life story of Joseph Valachi, the American mobster who first disclosed the existence of the mafia in his public testimony in the 1960s. This story would come to influence Mario Puzo, author and screenwriter of The Godfather. One of the strengths of Seal’s book is his ability to zero in on the individual stories of the various people involved in making The Godfather a classic. His craft as a biographer and storyteller comes to the fore in relating the stories of the lives of Puzo and others, including Paramount executive Robert Evans, producer Albert Stotland Ruddy, and filmmaker Francis Ford Coppola, among others. In Seal’s hands, the story of The Godfather’s transformation from novel to movie is an interesting one. The critical success of Puzo’s novel The Godfather spurred Paramount to adapt it into a movie. However, the studio’s distribution didn’t think the film would perform well given it was a gangster movie, and the studio only decided to act on making the movie once Burt Lancaster’s production company put its hand in for the film rights. Competition was a great motivator as the studio then moved quickly to wrangle a producer to steer the project. Ruddy got the job as producer, and Puzo signed on for the screenplay. Then Evans and studio exec Peter Bart needed to find a director, but none of the studios’ first choices — Arthur Penn, Richard Brooks, Costa-Gavras — were available and none of the directors who expressed interest were an appropriate fit. After some deliberate thought, the duo surmised that the film, if it were to be authentic, would need an Italian-American director. Bart suggested Francis Ford Coppola, who Seal describes as “the youngest director on Paramount’s list: a big, burly, bearded, longhaired intellectual.” Coppola accepted the role reluctantly at first, fearful that the studio would stifle his autonomy and vision. Coppola would take creative control of the film by rewriting and working with Puzo on the screenplay and having a say in casting. For the major roles, he wanted Al Pacino, James Caan, and Robert Duvall. “Thus began the major battle of The Godfather, one that would far eclipse the heated skirmishes over where the movie would be shot and its increasingly escalating budget”, writes Seals. “On one side was Coppola, a young director determined to cast the actors he saw so vividly in his imagination. On the other side was Robert Evans, a studio chief determined to avoid the miscasting that had plagued Mob films like The Brotherhood.” Seal’s flair for storytelling runs throughout Leave the Gun, Take the Cannoli, from his telling of what happened during the film’s production to his description of what happened afterwards. His book is an honorable testament to the film and its successes. As Seal mentions early on, “[The Godfather] revitalized Hollywood, saved Paramount Pictures, announced the arrival of Francis Ford Coppola as one of the great directors of the new era of film, minted a new generation of movie stars, made its writer, director, and producer rich.” One of the strengths of Seal’s book is his ability to zero in on the individual stories of the various people involved in making The Godfather a classic.
9 VIDEOAGE December 2023 MIP Cancun Report Biz at the Latin American TV Market is Not Just for Dollars Let’s first report the facts associated with last month’s MIP Cancun, held at its traditional Moon Palace resort venue. More than 800 participants from 43 countries were in attendance, among them were 172 distributors, 193 co-producers, 210 content buyers, and 43 commissioners. A tropical rainstorm that lingered for two days welcomed delegates to MIP Cancun for its 10th anniversary, celebrated November 14-17, 2023. The weather improved on the third day, but to be safe, the organizers kept the path from the hotel lobby to the convention center lined with large umbrellas. In addition to the storm, the LatAm market was a hectic one, and it rode the FAST wave that is now all the rage on the international TV market scene. Indeed, the well-attended “FAST Global Americas’ Summit” took up the whole afternoon of the event’s opening day at the Moon Palace Convention Center (part of the large Moon Palace Resort), which is located just outside Cancun, Mexico. According to Maria Perez-Belliere of RX France, MIP Cancun’s organizer, now in her second year as head of the market, MIP Cancun reps were excited to welcome participants, many of whom have given the market a “high satisfaction rating.” The report from exhibitors was generally positive, even though it was pointed out that little content buying took place due to the poor state of the economy in most Latin American countries. Nonetheless, the market is thought to be the best gathering place for the Latin American TV industry — an appointment that content buyers don’t want to miss (considering that most of them are invited all expenses paid), and content sellers, producers, and the trade press cannot afford to miss. The mood at the convention center was positive, with lots of chatter and laughs, lots of running for late appointments, and lots of meeting new prospective partners out of the blue. After the market come the follow-ups, many of which took place just after the market ended and will continue up until mid-December, before the buyers shut down for the Christmas holidays (which in Latin America end the first week of January). Indeed, the window for closing prospective deals is generally short, but if they’re protracted for any reason, the negotiations will most likely continue in Miami at one (or both) of the TV markets there: NATPE Global and/or Content Americas. As for the cost of attending with an exhibition table, the rate, Perez said, “increased a bit, in line with inflation.” Participants reported various levels of costs: Those with tables paid the highest rate (and got to choose which buyers they wanted to meet with from a lengthy list), while “Visitors +” were charged a reduced rate. Both of these included hotel accommodations, as well as food and beverages. Plain “Visitor” got only an access badge and access to the list of buyers just a few days before the market’s start date and without pre-set meetings. This year, the event housed 130 market tables from 121 companies (some took extra tables), plus seven stands. These were located in the hall of the convention’s second floor, facing the large marketplace space where the meeting tables were located. The 71 co-production tables were located on the first, or ground floor. For the “overflow”, two meeting point areas (A and B) were created with no assigned numbers, meaning that folks were free to use any available coffee tables and chairs, which at times were scarce. Two memorable screenings — both from Turkish companies — took over two subsequent afternoons: one from Inter Medya for Leylifer, the other from ATV for Safir. There were 29 pre-arranged meetings for content sales, and 23 for co-productions during the three-day market, which also had an opening party on Wednesday, November 15. There was also a closing party with a fireworks display on Thursday, even though the market continued up until Friday. In terms of conferences, 10 were scheduled. There was also a Woman of the Year award from the Worldwide Audiovisual Women’s Association (or WAWA). The eventful ceremony was held in a packed theater in the convention center. And even though it was very successful, the award organizers lamented the fact that the ceremony took place in Spanish as it gave off the wrong impression, that the association is limited to Latin American executives, when indeed it encompasses female film/TV executives from all over the world. Next time, the association will stage similar events in English. This year, the award for the WAWA Woman of the Year became “Women” of the Year since, for the first time, it was awarded to three executives who received equal votes from the members: Fidela Navarro, CEO of Dopamine; Carmen Larios, senior vice president, Content and Marketing at A&E Networks Latin America; and Selina Nederhand, senior vice president & Co-Networks head of Content Strategy at Sony Pictures Entertainment. MIP Cancun 2024 is scheduled for November 19-22, a week later than this year, possibly due to a late MIPCOM, which will end on October 24, 2024. Inter Medya’s Beatriz Cea Okan at the Leylifer screening Kanal D’s Sibel Levendoglu Hugo Aloy of Brazil’s Seven TV with ATV’s Müge Akar and Merve Dogan Record TV’s Grace Andrade, Delmar Andrade and Thiago Castro
INTERNATIONAL SALES +55 11 3300-4022 emendes@sp.rederecord.com.br
Serial Drama Golden Bird Prize INTERNATIONAL SALES Delmar Andrade dandrade@recordtv.com.br www.recordtvnetwork.com
VIDEOAGE December 2023 Asia TV Forum ATF: Bigger in Conference Rooms Than Market Floor Some people in the entertainment industry have complained that the annual Asia TV Forum (ATF) is too domestic. But others have been drawn in by the fact that the event focuses mainly on the South East Asia TV market. ATF will host its 24th edition in the city-state of Singapore on December 5-8, 2023 at the Marina Bay Sands Convention Center. Film and TV trade shows are very popular in Asia, especially for hardware manufactures and distributors, but in recent years, content providers have been getting in on the game with a plethora of trade shows such as Filmart (March, Hong Kong), Broadcast Asia (Singapore, May), Content Tokyo (June), Production Studios Expo (Tokyo, July), Tiffcom (Tokyo, October), and CineAsia (Bangkok, December). But Asia TV Forum has a particular appeal that caps all of them. Last year, ATF returned to an in-person edition, after a two-year shutdown due to the pandemic. The event returned with a “green” format. Out went the plastic that used to cover the badges, and out went the paper-wasting printed guide that used to list the exhibiting companies. In fact, there wasn’t even a flyer anywhere with this much-needed info. But being resourceful, ATF organizers had human billboards (aka people wearing sandwich boards, as shown on the front cover) serving as walking “help desks” that dispensed useful information to attendees in need of data regarding exhibitors and stands. Oddly, the ATF press office could not confirm the exact number of stands, and reported only that the “total number of sales companies was 637.” This year, participants can expect a big showing at FAST-themed seminars, as the concept has become all the rage at recent TV trade markets and events. December 6 will see two such FAST events, “Up to Speed With the FAST Ecosystem” and “Studios Adapting to New Priorities.” DS 12 (Continued from Cover) (SEA) film-TV industry is expected to become more competitive. The business is also likely to become more global, with more collaborations between Asian and Western media companies. At the backdrop of the ATF is the melting pot of Asian stories yet to be told. SEA has emerged as a hotbed for cinematic and television production. According to industry reports, the region’s film market has shown significant growth, with a projected box office revenue of over U.S.$4 billion by 2023. Industry experts highlight the significance of storytelling deeply rooted in Asian culture, which has captivated global audiences hungry for fresh and authentic narratives. With critically acclaimed projects like Parasite, Squid Game, and Hellbound from South Korea, Trese from the Philippines, Girl from Nowhere from Thailand, The Falls from Taiwan, and Crazy Rich Asians from Singapore, Asian filmmakers have proven their prowess in crafting compelling stories that resonate with diverse audiences worldwide. The rise of streaming services has also led to a surge in demand for original Asian content. In response, major players in the industry are heavily investing in the production of localized content tailored to specific regional tastes. For instance, Netflix has significantly expanded its slate of Asian original series and films, acknowledging the importance of catering to diverse audiences with culturally relevant content. Looking ahead, the industry is poised for continued growth, driven by several key trends. One such trend is the increasing collaboration between Asian countries in co-productions, which fosters crosscultural exchanges and creates a melting pot of storytelling techniques. Additionally, there is a growing emphasis on diversity and representation, with efforts to showcase stories from underrepresented communities within the region. Industry experts foresee a rise in demand for interactive and immersive content, driven by advancements in augmented reality (AR) and virtual reality (VR) technologies. These innovations are expected to revolutionize the entertainment experience, offering viewers a more engaging and personalized way to consume content. Studios in the West are actively seeking partnerships and co-productions with Asian counterparts to tap into the region’s vast market potential and storytelling expertise. This cross-pollination of ideas and talent is fostering a more globally inclusive entertainment landscape. Despite the rapid growth and promising trajectory, challenges persist within the Asian entertainment industry. Issues such as piracy, content censorship, and regulatory hurdles pose significant obstacles to the industry’s expansion. Navigating these challenges while maintaining creative integrity and meeting audience demands remains a crucial balancing act for stakeholders in the market. (By K Dass, editor, Viral Media) K Dass, editor, Viral Media
AMERICAN CINEMA / AMERICAN CINEMA INSPIRES George Shamieh - george@aci-americancinema.com Chevonne O’Shaughnessy - chevonne@aci-americancinema.com Booth # 19 Main Hall
VIDEOAGE December 2023 FAST Channels 14 (Continued from Cover) (Continued on Page 16) channels: content providers, platforms, programmatic advertising, playout providers, channel providers, and brand owners (a.k.a. publishers). Let’s start with content. Jonathon Barbato, co-founder and co-CEO of the Los Angelesbased Best Ever Channel (BEC), a channel provider, explained that these days content IP owners that want to enter the FAST universe have to start with a library of 300 hours minimum and update at a rate of at least 20 percent per month. But that is not all. “Three years ago”, said Barbato, “almost anyone with content could get launched. Now the platforms feel like they have enough channels, so getting launched is difficult, especially for those that don’t have channel ‘real estate.’ Platforms are now demanding an original, proprietary, and ongoing pipeline of content to differentiate a channel, and even to consider launching it”, he explained. However, the troubles surrounding getting “carriage” (also called distribution) for a FAST channel are not all that different from the difficulties encountered by cable TV channels or syndicated programs. To Christian Morsanutto of the Toronto, Canada-based Nextologies, a playout provider, “If distribution was king, now it’s emperor, and platforms are becoming more selective about the quality of the content.” To alleviate the problem, distribution companies were developed, like the New York City-based TeleUp, a company formed by Gustavo Neiva de Medeiros to syndicate FAST channels to various platforms. Currently, there are an estimated 1,500 FAST channels worldwide (75 percent of which are based in the U.S.) and 22 major platforms, including the connected TV manufacturers. Among the major ad-supported FAST platforms BEC’s Barbato listed are Roku, Samsung, Vizio, LG, Freevee/ Amazon, Pluto, Tubi, XUMO, and Fubo. Nextologies’ Morsanutto added, “FAST is still a predominantly North American event, but it’s now spreading around the world. Keep in mind that current linear channels are adding SCTE markers [cable and TV standards that are embedded within the video content, enabling coordination of advertising insertion] to become FAST channels.” To Barbato, viewers’ current limit of FAST channels can reach a maximum of 200, however, he believes that “AI will make room for 1,000 channels because it will effectively only serve what an individual viewer wants.” Platforms operate as aggregators and offer an ecosystem similar to cable TV operators. The revenue split between the platform and the channel is usually 50/50 on the net the channel receives from advertising, but some platforms ask for 60/40 in their favor, and others 45/55 in the channel’s favor. The platforms can also sell the advertising if the channel doesn’t sell its own. (also called a video service provider, like Nextologies). The IP owner comes up with the content. The playout provider is the tech company that actually creates the channel in the form of an interface using the “assets” (programming) to upload. The channel provider takes the interface and the assets from the playout provider and creates the lineups (which program the channel, also called the grid), plus it stores all the “assets.” These assets are then sent to the playout provider who delivers them to the list of platforms that the channel provider gives them. As for the new uploads (new shows), the channel brand owner sends them to the playout provider, who stores the assets, which are uploaded by the channel provider as needed. Another issue that channel brands are facing is the programmatic advertising process. “The lack of transparency is a challenge, especially for publishers without direct ad server relationships”, said Gustavo Neiva de Medeiros, CEO of TeleUp, and president of the FAST Alliance (pictured on the front cover). He continued: “The key issue is distinguishing the average revenue received by publishers (channels) from what platforms or intermediaries receive. While a channel might average $7, the platform or intermediaries could earn $20. Addressing this disparity is a key area where the alliance aims to assist publishers.” The whole FAST business is based on a revenue-share (rev-share) model wherein technical costs are charged by some playout providers (like Nextologies), while others (like Amagi and OTTera) have a hybrid model: part technical cost, part rev-share. The business model for playout providers is to charge channel providers per channel for storage, programming, seats, and platform delivery. So, if a channel provider delivers seven channels to seven platforms and are charged, for example, $1 per channel per platform the channel provider would be charged $49 per month. The FAST Alliance has been operational since July 2023. “We represent FAST Channel publishers. However, we are considering the creation of vendor memberships with reduced voting power”, said Neiva de Medeiros. Its membership count is steadily increasing, with several applications pending board review. “We expect to have approximately 50 members by the end of this year”, added Neiva de Medeiros. Barbato’s BEC is a member of the FAST Alliance, as is Aparicio’s The Latin Beat. FAST Alliance has a programmatic ad service, which is only available to members. “We have the best prices and the highest CPMs [cost per thousand viewers] and don’t carry a monthly fixed cost or ad manager fee besides the yearly membership dues for members who utilize the service”, explained Neiva de Medeiros. Programmatic ad service is an automated Platforms are also gatekeepers when it comes to the selection of channels carried and for the way they’re delivered to them. According to Gustavo R. Aparicio, managing director of the Miami, Florida-based The Latin Beat, a FAST channels operator, instead of developing a unified technical standard, major platforms have allowed only four playout providers to deliver the playout stream: Amagi, WURL, Frequency, and OTTera. Some publishers (FAST channel owners) also complain that there are cases when platforms create their own linear channels based on the successful results of other channels they carry. In order to understand the role of a playout provider, it is important to describe the ecosystem of a FAST channel. The creation of a FAST channel is a multitask operation that involves the originator in the form of an IP owner (also called a publisher or a brand owner) who contracts a channel provider (like Barbato’s BEC), who in turn calls upon a playout provider Stephen Hodge, OTTera’s CEO “Platforms are now demanding an original, proprietary, and ongoing pipeline of content to differentiate a channel, and even to consider launching it.” Jonathon Barbato, BEC
VIDEOAGE December 2023 FAST Channels 16 (Continued from Page 14) method of buying and selling ad inventory in real time. It is basically an exchange using software and algorithms wherein publishers and advertisers combine to trade digital media. Publishers make their ad inventories available through ad exchanges, while advertisers purchase them via real-time bidding (RTB). Thus, no humans are involved, and impressions are sold to the highest bidder. Plus, these ad servers are responsible for storing ad content and delivering it to the channels. Ad servers also develop parameters (called “micros”). There are 10 key micros, like limiting the CPM at max $30. Between the ad exchange (ad server) and the publisher (FAST channel) there are two “middlemen”, or even three: The SSP, the DSP, and at times, the reseller. SSPs, or Supply-Side Platforms, are used by publishers to sell ad space to advertisers across different exchanges. Also, ad agencies prefer to buy in bulk from platforms versus single channels. By making their ad inventory available to large exchanges, an SSP helps to maximize the publisher’s ad revenue and their share is 10 percent of the revenues received from DSPs. According to content producer Matt Brummett from Overland Park, Kansasbased Space Mob, “Ad exchanges and SSPs are the same thing these days.” DSPs, or Demand-Side Platforms, on the other hand, are used by advertisers to buy their ad space across many publishers’ websites. DSPs are also called “Seats” and they pay the SSPs, who, in turn, pay the publishers. DSPs allow buying ad impressions from ad exchanges for the cheapest prices. They usually take 10 percent of revenues received from ad agencies. Resellers are entities that buy ad inventory in bulk and resell it to advertisers, often with added value like specific targeting or bundled inventory. If they are involved, a resellers’ cut is 20-30 percent of the revenue from the channel owner. Resellers are not well liked by some players, including OTTera, whose CEO, Stephen Hodge, compares them to people who, without a mandate, seek buyers for TV programs, and when found, go to the content owners to see if they want to make the sales in exchange for a commission. According to the Middlesex, U.K.-based Digital TV Research, global Free Advertising Supported Television revenue is now an $8 billion industry in the U.S. Currently, the U.S. accounts for 56 percent of the total FAST business. Global FAST revenues are expected to increase by $9.4 billion between 2023 and 2029. This compares to $39 billion in global revenue for AVoD channels (the U.S. accounting for 40 percent) in 2023. Another issue is that many IP owners are reluctant to sell their shows to FAST channels even on a 50/50 rev-share basis without a minimum guarantee (MG) because Some of this new Social Media content that manages to move to OTT with broadcastquality results is subsequently licensed worldwide by established international distributors. The New York City-based FilmRise, for example, licensed Preston & Brianna, a popular YouTube show. Similarly, distributors with extensive film libraries, such as the Los Angelesbased Multicom Entertainment Group, license content, in the words of Jesse Baritz, Multicom’s VP of Content Acquisition & Development, “to all different kinds of media, including for their own FAST channels.” Some channels, like Vevo, don’t buy content, but receive music videos directly from labels and artists. Based in New York City, Vevo has a portfolio of 20 FAST channels in the U.S., Canada, the U.K., the E.U., Australia, and New Zealand. According to Rob Christensen, EVP, Global Sales, Vevo, the company “shoots and produces original content consisting of live performances with participating artists.” The historical aspect of FAST is also not too clear. According to OTTera’s Hodge, in 2015, XUMO produced the first FAST channel when XUMO was a joint venture between Viant Technology (part of Meredith Corporation) and Panasonic. Today, XUMO is jointly owned by Charter Communications and Comcast. As for the FAST acronym, many credit it to the American media analyst Alan Wolk, who used it in a December 2018 article. However, Nextologies’ Morsanutto disputed the account, explaining that “FAST has been around for many years. The only difference is that back then, instead of SCTE markers, there were DTMF [automated control] tones.” In our 2020 article, VideoAge reported that FAST was “originally created in Los Angeles in 2014 by Pluto TV, which was acquired by ViacomCBS in 2019. It has also been reported that in 2012, Joe Kovacs, president of the New York City-based Screen Media Ventures, was toying with free streaming services. However, he said, “We were thinking of a linear streaming service for our movie library, but we settled for an ad-supported VoD service that we simply called free VoD.” (By Dom Serafini) there is not a clear model to determine the ad-share going to the IP owner. In most cases, the channel owner gets monthly reports. If the platform partner also sells advertising, its revenue reporting can be by title or by channel. If done by channel, the channel owner also needs a report from the playout partner in terms of a particular program’s hours of viewing (HOV). For example, if in a month a channel’s HOV was 1,000 hours and said program had 100 HOV (10 percent), its share of ad revenue is $50 in a 50/50 share if the channel received $1,000 for that month. FAST channels are based on a long-tail model in which content in low demand can make up market share that rivals blockbusters, but only if the distribution channel is large enough. And this drives the quest for the channels to be on multiple platforms. A good portion of AVoD and FAST content consists of existing film and TV library material, with a smaller portion of that coming from licensing deals on a revshare basis, which only a few established distributors are willing to do, and only with the 10 major players, such as Pluto, Roku, Tubi, Vudu, or Freevee. The new “viral” ecosystem that is now engulfing the international TV industry is also flooding the market with low-cost, low-quality content that is financed on a rev-share basis, with the talents absorbing most of the initial financial burden. Jonathon Barbato, co-founder and co-CEO of Best Ever Channel Gustavo R. Aparicio, managing director of The Latin Beat FAST channels are based on a longtail model in which content in low demand can make up market share that rivals blockbusters, but only if the distribution channel is large enough.
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VIDEOAGE December 2023 TV License Fees 18 (Continued from Cover) could detect if a TV was on in a home, but not on the “paid” register. However, from that era on, there have been protesters who either complained about or refused to pay the fee, currently £159, or U.S. $197, for a color TV and £53.50, or $66, for black-and-white (if they still own one). People over 75 did not have to pay the fees until recently but are now liable, and recent figures indicate that nearly two million U.K. homes (nearly a nine percent increase last year) refused to pay the fee, claiming they no longer watched the BBC or any live television on any other device, which are the parameters for having a license. This refusal cost the BBC about £42 million ($52 million). Incidentally, the U.K. is but one, among about two-thirds of all European countries that require direct or indirect TV license fees. Today, politicians in different countries are saying that TV license fees should be dispensed with and are echoing the calls heard during last year’s French government’s licensing debate, calling such fees “outdated and obsolete.” In the U.K., when the 2027 cut-off decision was made, Nadine Dorries, the Culture Secretary, was quoted in The Guardian newspaper as saying, “The days of the elderly being threatened with prison sentences and bailiffs knocking on doors are over. Time now to discuss and debate new ways of funding, supporting and selling great British content.” More viewers have gone to streaming services for their small screen entertainment, while others suggest they just cannot afford the license fee. Incidentally, those people are likely to be paying more over a year for those streaming services. Outside of the BBC, all other U.K. channels (radio and TV) have been 100 percent funded through advertising revenues. Between now and 2027, the BBC will get a cost of living increase to the current license fee, but one of the big questions still remaining is how the BBC will get the financing it needs to continue operations in a broadcasting world that has changed beyond comprehension since they first went on air? Many funding alternatives have been proposed for the BBC, including advertising revenues, charging for computer and/ or phone connection to live TV, a government grant, and even a special income tax, but nothing has yet been determined. One thing is certain. Despite the success of its content worldwide and the general excellence of its programs (which actually supply about 25 percent of its operating revenue via its licensing deals and commercial sales outside of the U.K.), the BBC will be unable to get by on just that, so it’s little wonder that drastic cuts are already underway. and establish alternate funding proposals for their local national broadcast entities. Recently the French National Assembly voted to scrap their TV license fee, amounting to between €3.2 billion (U.S.$3.47 billion) and €3.5 billion a year, which funded about 85 percent of their public broadcasters (including Radio France, ARTE, France 24, and France Televisions, comprised of France 2, France 3, France 4, France 5 and France Info, as well as certain regional TV outlets). They determined that the government would now offer some funding from their VAT (or sales tax) collections, which would be about the same amount as received from the former license fees, which cost each household €138 a year ($150). The decision ruffled plenty of feathers with suggestions that a future government could exert unfavorable pressure upon broadcasters, or have them more reliant upon advertising revenues to pay their bills. Alternatives to the license fee range across several alternatives but usually come back to the consumer still paying out of pocket via a new tax, or, as is the case in countries such as Turkey, Serbia, and Romania, where license fees are paid through increases in electricity bills. Meanwhile, in Italy, Matteo Salvini, the Italian Deputy Prime Minister, announced last month that the current Italian license fee would be reduced by just over 20 percent, from 90 to 70 euro ($76). This is the beginning of what his government promised to be an eventual and complete abolition of the TV license fee. Currently, public broadcaster RAI benefits from the monies collected via electricity bills. At the moment, no definite funding plan has been determined. Turkey is another country where the TV license was part of the electric bill, but last year the Turkish government decided to remove the fee from consumers’ electricity bills. The Norwegian License fee was eliminated, only to be replaced with a new public service tax to be paid by all residents aged 17 and above. These join residents of other Nordic countries, such as Iceland (16-70 years old), Denmark, Finland and Sweden (18+). Australian consumers of TV content seem luckier than most, as the government funds the ABC network and no one pays for a TV license under any form at all. However, when all is said and done, it doesn’t matter that any government determines its population pay a tax within their electric bill, a tax based on their income level, or through their VAT, people are still going to have to pay a tax in order to watch TV — the license fee has just been given a different name. (By Mike Reynolds) Hundreds of staffers who worked at the BBC’s World Service have been let go, even though that service had been funded by the U.K. government. Local radio and TV have seen cuts in staff and program content, with Tim Davie, director general of the BBC, saying, “everything’s on the agenda.” He also suggested that the BBC is preparing to become an online-only service over the next decade, “bringing the BBC together in a single offer.” This could be through an umbrella app containing links to all BBC content. While the U.K. has to determine just what the BBC funding proposal will be for the online and current over-the-air services, other countries have already made their decisions to eliminate license fees Today, politicians in different countries are saying that TV license fees should be dispensed with and echoing the calls heard during last year’s French government’s licensing debate, calling such fees “outdated and obsolete.” “I don’t like the look of this!”
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22 My 2¢ December 2023 It’s a vicious circle wherein one type of media feeds the other. Now I understand why none of VideoAge’s experienced contributors wanted to write the story that was eventually published on the front cover of our November 2023 edition. It was because even though the topic resembled television business (in the sense that it was about TV content), the subject also wandered into a new entertainment environment engulfed in an unfamiliar ecosystem known as Viral Media. The topic concerned the migration of video content from Social Media to OTT platforms, and the headline read: “The New Trend: Migrating from Social Media to OTT”, which is something that’s easier said than done. In the piece, we covered vertical videos for smartphones that are being adapted for a horizontal medium like TV. We also covered “billions” of viewers and millions of new TV talents that are feeding millions of TV channels. The story also touched on the topic of moving from the comfort of cable channels to the uncertainty of streaming ecosystems, getting away from a universe where viewers could access one cable system and one satellite operator per area to a place with hundreds of aggregators competing in each home. Plus, the report explained a type of business model based on a revenue share (or rev-share as it is usually called) model that is different from the traditional linear TV model. Forget about minimal guarantees or license fees for content, now everything is based on speculation and hopes, which in effect had always been the way of artists (why do you think they’ve always been called starving artists?)... and producers, until the TV business became so stable and predictable as to be able to actually “commission” film and TV projects. Viral Media is a whole different ballgame! I had an inkling that big changes were in the works last year while in Singapore for the Asia TV Forum. Call it hindsight, or missing the boat. While having breakfast at my hotel, I saw an Asian couple dining with their daughter, who looked to be about eight years old. She was standing off to the side of their table, dancing while looking into a cell phone, presumably filming herself for a video that would eventually be uploaded to some form of Social Media. Her parents continued eating, completely oblivious to her actions. That same day, during dinner at Singapore’s popular Lau Pa Sat, a Victorian-style food court, I saw another girl, this time not older than 12, holding an iPhone and recording herself jumping around by her table while her adult companion, perhaps her mother, dined quietly by herself. Those occurrences made me realize, definitely much later than I should have, that seismic changes were brewing in the television business in the form of those videos going viral in a new media ecosystem. At the same time, I started to notice that videos of kids that looked freakishly similar to those dancing girls in Singapore were appearing on daytime and afternoon talk shows in the U.S., and finally, at MIPCOM 2023, the fall TV market held in Cannes, VideoAge was contacted by an avalanche of companies touting their viral and streaming services. Traditional TV is being overtaken by Viral Media, which is causing traditional TV to lose out while Viral Media is nibbling at traditional TV’s audience. It’s a strange vicious circle wherein one type of media feeds the other, but while Viral get bigger, traditional gets smaller. Then there are all the acronyms like FAST, AVoD, SVoD, etc., each of which has its own business model in a streaming ecosystem that doesn’t resemble the traditional TV business. VideoAge was finally able to write the report with the help of no fewer than 10 viral media experts and took the printed Issue to MIP Cancun where FAST channels were being highlighted. The review of that market is featured in this edition. Dom Serafini Pity the journalists trained in traditional TV, who, after the COVID pandemic, have to face a Viral Media landscape that has changed the ballgame, the playing field, and the rules.
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