By R.T. Watson
U.S.-based streaming services are shaking up the entertainment
industry's world order.
Netflix Inc., Amazon.com Inc., Walt Disney Co. and AT&T
Inc.'s HBO Max are chasing growth in overseas markets, investing
billions of dollars to produce local-language television series and
movies. That push is creating boom times -- and competition -- for
writers, actors, producers and crew. It is also threatening
established broadcast networks and distributors in other countries
and prompting action from local lawmakers and producers over equal
pay and content ownership.
In the past, long-established local players could easily
contract top-tier talent in international markets such as Spain,
Indonesia or Brazil. With cash-rich streaming companies such as
Netflix in the mix, demand for writers, directors, and actors is
high, putting pressure on local broadcasters and distributors with
fewer resources.
"Any local buyers, whether linear, digital, cable network...are
being outspent by global streaming platforms," said Charlie Corwin,
co-chief executive at SK Global Entertainment, a Los Angeles-based
production company that is doing content deals with companies
including Netflix, Amazon and Disney on high-profile international
projects set in emerging markets such as Thailand and India.
German producer Martin Moszkowicz of Constantin Film says the
big streaming services are locking in key production professionals.
"They are like vacuums," he said. "You can't get crews, basically
in all of Europe, at the moment."
Netflix declined to comment.
Netflix recently projected that it would invest more than $17
billion globally on content this year, while Disney announced in
December that it would be spending up to $9 billion a year
world-wide on content for its Disney+ platform by 2024. With
several dozen international projects in the works, both companies
are expected to spend a large share outside the U.S.
Amazon says it has been doubling its volume of original,
local-language content annually since 2017. HBO Max recently said
it would produce more than 100 local language projects for Latin
America alone during the next two years.
World-wide streaming subscriptions exceeded 1.1 billion last
year, up from fewer than 400 million subscriptions in 2016,
according to the Motion Picture Association. The major streaming
services are betting overseas territories will deliver their next
waves of growth as the North American market becomes saturated.
Struggling to compete on their own, some established foreign
television networks and distributors are joining forces to counter
the global reach and spending power of the U.S. streamers.
Mexican broadcast and media giant Grupo Televisa SAB agreed to a
multibillion-dollar merger with Univision Communications Inc. last
month, creating perhaps the world's largest Spanish-language media
company. Architects of the Televisa-Univision tie-up say they aim
to create a global streaming service.
Brazil's largest broadcaster, Grupo Globo, is investing heavily
in original content for its Globoplay digital platform to compete
with U.S. streaming services, said the network's head of digital
distribution Erick Bretas.
"Disney and Warner are pulling content from platforms that they
used to license to," Mr. Bretas said, adding that not being able to
license popular American movies and shows has put more pressure on
the network to develop and acquire content.
Mr. Bretas said Globo is developing more than 100 new projects
exclusively for its platform.
"Netflix and Amazon are super powerful," he said. "[But] we
can't aim for anything less than being the leader." The company
doesn't disclose subscriber numbers, but said its subscriber base
has risen by nearly 400% in the past two years.
In Europe, U.S. streamers are encountering new rules and
regulations.
Belgium television executive Elly Vervloet -- a coordinator for
the European Broadcasting Union, which represents more than 50
public broadcasters including the British Broadcasting Corp. and
France Télévisions -- is overseeing an initiative to get those
broadcasters to join forces and invest more in digital
distribution.
Public broadcasters must shift to streaming, Ms. Vervloet said,
adding that producing and airing high-end episodic series is how
the broadcasters attract viewers to other, less commercial
content.
In Europe, local governments and unions have made rules that
require streaming services to provide greater transparency with
metrics and reward teams whose shows win wide viewership, among
other measures.
Streaming services infrequently disclose viewership data. Unlike
with traditional film and television, writers, producers and actors
who work with services such as Netflix typically don't receive
bonuses -- or even data -- when a show or film is viewed by many
subscribers.
Amid the success of Netflix's German-language series "Dark" last
year, local unions in Germany negotiated a deal that requires the
company to pay actors and crew bonuses when more than 10 million
subscribers watch at least 90% of a series' season. A Netflix
spokeswoman praised the agreement at the time.
The deal fell within the bounds of a series of European Union
regulatory measures that require streaming services to adequately
compensate workers and preserve the continent's cultural
diversity.
Under EU rules, at least 30% of the content offered on platforms
such as Netflix must qualify as European content and companies must
reinvest a percentage of revenues into local content.
France, among the most aggressive nations in regulating
streaming companies, has approved legislation that requires
platforms to reinvest up to 25% of revenues realized in the country
into new French productions.
To meet the EU's 30% content threshold, U.S. companies are
spending more on both new and old local-language programming,
according to Prentiss Fraser, an international sales executive at
film financier Endeavor Content. Disney and Netflix have announced
dozens of new European projects in recent weeks.
While independent European producers welcome the incoming work
from streamers, many object to the work-for-hire model promoted by
Netflix, where they don't retain any rights to the material they
produce.
Typically, producers who make European shows retain ownership of
the content rights, which can allow them to profit for years on
some projects, even if the reach is sometimes limited.
"The upside can be finite for many European shows...but they
still owned it and they were proud to own it," said Ted Miller, an
agent at Creative Artists Agency.
"We are creative producers. We are entrepreneurs taking risks,"
said French producer Alexandra Lebret, managing director of the
trade association European Producers Club. In March, the EPC, which
represents more than 100 producers, issued a formal list of
guidelines that it hopes U.S. companies will follow, such as asking
streaming services to pay producers more when content is popular,
on top of allowing producers to retain ownership.
Ms. Lebret said standing together is perhaps the only way
creators will be able to convince companies such as Netflix to do
business differently.
"We are many small companies and they are giants," she said.
(END) Dow Jones Newswires
May 12, 2021 07:42 ET (11:42 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.
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