Moyra Rodger always says she got off the plane before it crashed.
The plane was B.C.’s film and television production industry. The crash was the crisis of recent years, as recession, tax disadvantages and Toronto-focused industry consolidation have steadily drained the pool of work for B.C.’s producers.
But if Rodger saw the crash coming, it was because she and her company Out to See Entertainment Inc. had too long been victimized by a “distasteful” power imbalance between producers and broadcasters. For Rodger, the last straw was Out to See’s deal to film a live Anne Murray show for the CBC five years ago.
“It finished me off.”
Rodger said the deal required her to re-invest 90% of the production’s tax credits back into financing the show.
“The deal was ridiculous, and as an independent, I took a lot of risk.”
Swearing off TV production’s broadcaster-dependent business model, Rodger leveraged a marketing background and digital know-how she’d accrued as a producer to launch digital strategy company Magnify Digital Inc. in 2007. While Rodger has continued to operate Out to See, she said her focus has been squarely on Magnify, which provides digital strategy services and has developed software to help the public relations industry go digital.
And now, in a twist of fate, television’s digital revolution has brought Rodger back into the production world – but this time, she said, with a lifeline to throw an industry still struggling with a broken business model.
Digital revolution
While TV viewers have for years clamoured for more online content to accompany shows, the major push for Canadian TV producers to go digital came in April 2010. Directed by the Department of Canadian Heritage, the Canada Media Fund (CMF), the industry’s key federal funding agency, began mandating a digital component to TV projects.
“It was a real kick, not to say in the ass, but to encourage broadcasters to enter into this new universe,” said Nathalie Clermont, CMF director of program management.
Clermont said the new requirements have spurred innovation among television producers. But she noted that there’s still some push-back from cash-strapped producers across Canada, particularly from those who focus on one-off live events, for which creating online content can be a disproportionate expense.
“We still feel some resistance.”
Vancouver players
In Vancouver, television producers have been making their peace with the new requirements.
“Like most things, when you get told, ‘You have to do this,’ there’s always this feeling of ‘Oh, is this the right thing, how are we doing this, how is it going to work?’ It feels a bit unnatural,” said Rob Bromley, partner and president of Vancouver-based production company Force Four Entertainment.
“I would say though that we’re all going there ... willingly. It’s just this transition period.”
At Omni Film Productions Ltd., which has carved out a strong local reputation for its interactive content for its Ice Pilots NWT TV series, partner and executive producer Gabriela Schonbach echoed Bromley’s cautious optimism toward the digital trend.
“It’s good and bad,” she said. “There are times when we have to do something to satisfy certain requirements from both our broadcaster clients and our funding agencies. But at the same time, there are plenty of times we want to do something because we know it adds so much value and that it has revenue potential down the line.”
Schonbach said the biggest challenge of going digital is the extra time and money producers need to devote to exploiting a secondary platform. She said that even after a producer has accessed available funding for digital projects, producers might need to invest anywhere from $10,000 to $50,000 into a project.
Bridging the gap
Besides the challenge of drumming up extra capital, producers are having to increase their digital know-how to create multi-platform TV project concepts.
This is where Rodger believes she can empower the industry and drive her own company forward. Magnify Digital is in the midst of adapting its digital strategy software for TV producers.
Rodger, who hopes to have the software on the market in early 2012, said the tool will help producers build multi-platform TV pitches for shows when money is tightest – at the concept stage, before any show funding has been lined up.
Roger said the ALERT-TV+ software will allow producers to gauge the size and interests of the online audience for a show and thus pitch broadcasters more effectively, all for a licensing fee set within producers’ reach.
“You can go to a broadcaster and say, ‘There’s a million moms in Canada talking about how they can’t get their toddlers to eat vegetables. This would be a great concept for a show.’”
Besides identifying the online market demand for a show, she said, the software helps producers craft a strategy that leverages digital tools, such as social media or online games. The strategy-building process, she said, pushes producers to identify a rationale and goals for each digital tool selected.
Rodger said that at the concept stage, a sound digital strategy will strengthen a project pitch. She added that after a project is OK’d and producers can afford to hire digital media experts, a digital strategy will add substance to producers’ interactions with digital media talent.
“The frustration I’m hearing from [digital] agencies is that producers come in and they don’t have a clue; they say they want ‘a game.’ Instead, the conversation could be: ‘These are our objectives. Here’s why we think a game could work. And what about something like [Vancouver-based tech company] Pug Pharm’s new platform that does A, B and C.’ That’s a whole different starting point than ‘Wouldn’t it be cool to have a game?’ and the reference point for some traditional producers is Pac-Man.”
Finding digital returns
While the digital age is throwing new hurdles at producers, it’s also opening up new revenue opportunities for an industry that has traditionally relied on broadcast licence fees to survive.
Schonbach said it’s still early days for monetizing producers’ web content. But she said Omni is seeing revenue opportunities with online advertising and e-commerce that range from show episodes for download to DVDs and merchandise.
“We’re more and more able to distribute ourselves and directly deal with buyers.”
Clermont added that some producers across Canada have started generating revenue by selling monthly subscriptions to online games.
“For now it’s not huge revenue, but some business models are starting to emerge.”
Local producers said that thus far, a web-driven brand lift has been a more significant gain than new online revenue streams. Bromley pointed out, for example, that social media channels have proved an effective and relatively cheap promotional tool for the industry.
“It’s a great way to promote television,” he said. “It gets people talking, and it’s really helped television.”
And Schonbach said that heightened brand awareness can, indirectly, lead to additional revenue by increasing the likelihood that a producer will land another season for a show. And that, she said, is key for producers’ profit margins.
“It’s like anything else: it takes so much to build the first season and if you can get more of them, then you start seeing better return.”
Scramble for rights
While it’s still unclear how valuable digital rights might become, digital experts are advising producers to negotiate hard to keep as many rights as possible or ensure that broadcasters pay well for them and are committed to exploiting them.
Mary Quinn is a digital strategist with Switch United. The Vancouver-based interactive entertainment studio is behind Omni’s online Ice Pilots content and, by many accounts, the current go-to digital media company for Vancouver’s TV producers. Quinn said she’s advising producers to maintain ownership of key online content such as a show’s Facebook page and fans.
“Often the broadcasters want to take the rights to everything they can online,” she said. “If you can own the Facebook page and all of your fans there, you’re in a much stronger position if you sell [the show] internationally.”
But with online monetization models still shaky, Clermont said broadcasters have been scooping up digital rights for cheap.
“Since there’s not a lot of money to make from these rights right now and the business models are not really tested, the value seems to be quite low,” she said.
Rodger argues that her software will arm producers with the knowledge needed to hold their ground in digital rights negotiations with broadcasters.
“I think it’s going to empower the television producer to do a better job negotiating the rights, because they’ll have more understanding of what’s at stake.”
Rodger added that after the production community’s struggles of the past few years, producers’ luck may be turning. One example, she said, is the terms of trade agreement that the Canadian Media Production Association signed earlier this year with five private-sector Canadian broadcasters, a deal that’s widely expected to give producers more negotiating leverage when they’re dealing with broadcasters. (See “Entertainment producers hail rights deal as huge victory” – issue 1138, August 16-22.)
Exploited correctly, Rodger said, the digital age promises more gains for producers and new mechanisms to right the broken business model that turned her off the TV production business.
“With the convergent world, producers for the first time can attract the audience – those valuable eyeballs – themselves, without going through a broadcaster,” she said. “I don’t think we’ve even started to see where the monetization opportunities are.” •
