Netflix “open” to Euro investment

Speaking at a hearing organised this week by the European Commission on the promotion of European films and TV series online, Libertelli said that Netflix’s chief Ted Sarandos “is open to that, but hasn’t announced any specific plan”.

In reply to a question from André Lange of the European Audiovisual Observatory about whether Netflix would exclusively invest in series or also move into feature films, Libertelli replied: “If Ted Sarandos was here, he would say ‘everything is possible’ and there is no limitation on just doing serialised content.

“It just so happens that works best on Netflix, (but) that doesn’t mean we are not open to original features. In Hollywood at least, there is a potential gap in the market between these micro-films and these huge Hollywood blockbusters. And so maybe there is a middle ground in there that’s conducive to a more effective economic model from us.”

Libertelli described the current changes in the market as an “exciting time for content producers” and said that VoD platforms provided domestic content producers with “huge opportunities” due to the increasing consumer choice and the notion of the platforms as potential export markets.

He explained that it was “early days” for Netflix in Europe and “in terms of understanding the Commission and the regulators, and we certainly want to do as much listening as speaking.” At the same time, Libertelli posed the question of whether Netflix’s strategy of personalisation as a prominence tool might be adapted for the promotion of European works.

Considering options

In discussing the options of promoting European works online by a required share of the catalogue, the use of prominence tools, or by the imposition of a financial contribution, Bernard Tani, VP VoD & Acquisitions at Orange France, noted that France’s transactional VOD (TVoD) players are required to invest in European works – 15% of their turnover in European works and 12% in French works - , while only three other EU member states - Italy, Spain and the French speaking community of Belgium - have financial obligations imposed on VoD operators.

Tani suggested that subscription VoD (SvoD) is similar to pay TV and should therefore contribute to the financing of European works at the same level as Pay TV channels. Moreover, one should create a level playing field in the European market between European players and European-based players, and public funding should only be given to TV channels or producers who give or permit accessibility to VoD rights.

Meanwhile, the option of imposing quotas was rejected by both Bruno Chauvat, EVP Strategy & Content at Belgacom, Dragoslav Zachariev, secretary general of EuroVoD, with Zachariev also suggesting financial contributions should be imposed on TV manufacturers and global platforms coming from the IT industry, according to their turnover per territory.

Danish proposals

Other contributions in the four-hour hearing included Claus Hjorth, Head of Unit at the Danish Film Institute (DFI), who explained that the Danish cinema’s financing model was locked into the analogue world of public funding, cinema and public broadcasters and a tight window structure.

In a new as-yet-unpublished report based on discussions with stakeholders, the DFI had set out a number of solutions as “a  negotiation platform for the future” with Netflix, Itunes, the Danish operators and the traditional stakeholders in the market place:

• new flexible windows structure is key;
  
  
• the establishment of a TvoD premium window for Danish films (and TV series) eight to 10 weeks after the cinema release;
  
  
• all VoD operators to contribute to the financing of films, resulting in the launch of the aforementioned TvoD window. The operators would be guaranteed security of supply and branding  and  and the establishment of a VoD film funding mechanism;
  
  
• possibility of reallocation of retransmission fees to TvoD in the interests of rightholders and the audience in order to develop the new digital market;
  
  
• freedom of choice for producers in the financing phase.

The hearing had been organised as an ongoing process to learn from the practical experiences of regulators and VOD operators with Article 13 of the European Union’s Audiovisual Media Services Directive (AVMS) which was launched in 2007 and “provides that on-demand audiovisual media services will promote the production of and access to European works.”

The Directive had proposed that “such promotion could be carried out, amongst others, through financial contributions to the production and rights acquisition of European works or by ensuring a share and/or prominence of European works in the catalogue of programmes.”

For Those In Peril to get day-and-date release

At the Brussels hearing, Sarah Calderon of The Film Agency revealed that Paul Wright’s BAFTA Scotland-winning film For Those In Peril will be the third title to have a day-and-date release as part of the EU-funded The Tide Experiment pilot project.

It follows documentary Viramundo and Ferzan Özpetek’s comedy Magnificent Haunting (Magnifica Presenza) earlier this year.

Calderon explained that a common poster was developed with six distributors for Wright’s film, but for this third release, The Tide Experiment’s partners decided “to go a step further” in transversal marketing with “more risky ideas”.

The three-pronged strategy included so-called ‘video seeding’ in collaboration with Emerse to place trailers in various targeted sites across Europe, this activity being linked with a certain number of guaranteed views on YouTube. In addition a partnership with Distrify will embed the player with the film in existing sites, and a live Q&A from Paris is planned as part of a simultaneous premiere with director Wright being interviewed by a local talent.

However, the EU-funded preparatory action has been a particular bone of contention with European exhibitors even before it was launched last year.

On the eve of this weekend’s Europa Cinemas conference in Athens, UNIC, CICAE and Europa Cinemas reiterated their opposition to the initiative by issuing a joint statement claiming that the pilot project “threatens to disproportionally weaken cinemas” and adding that it was “not surprising that the overwhelming majority of film industry stakeholders have chosen to not participate in any of the projects financed under the first wave of the Preparatory Action.”

“While box office results for the released niche titles are so far weak, the general lack of transparency in the VOD business means that there are so far few, if any, revenues reported for this emerging market. It remains unclear how each of the supported projects will be evaluated and if this will be done by an independent body,”  the three exhibitors’ associations declared.

The EC-funded €2m initiative had been allocated in October 2012 to Wild Bunch’s Speed Bunch, ARP’s The Tide Experiment and Artificial Eye’s EDAD project.

Film heritage

The hearing was held less than a week after several European film industry organisations – such as BFI, FIAPF, FIAD, FERA, EFP, EPC and ACE – pledged as part of the European Commission’s Licences for Europe stakeholder dialogue to improve cross-border access of audiovisual services and accessibility of film heritage.

The audiovisual industry committed to gradually offer cross-border portability of audiovisual services, thus making it easier for consumers to legally access films and TV programmes from their home Member State when travelling abroad on holidays or business trips.

An agreement by film producers, authors and film heritage institutions on principles and procedures for the digitisation and dissemination of heritage films will ensure that many old films which are currently not available online or might otherwise disappear are saved for the future and made available to wider audiences.

The Licences for Europe initiatives were the result of ten months of work and exchanges which gathered together stakeholders from the audiovisual, music, publishing and video game industries, internet service providers, technology companies, cultural institutions, web users and consumers, and other interested parties who could contribute their expertise to this matter.