Streaming services present ‘exciting’ opportunity: production exec

It makes sense that David Cormican is optimistic about the impact new streaming services will have on Canadian producers. He’s halfway through the shoot of a new show called Between. It's a teenager-focused drama about a group of youth quarantined by the government after the outbreak of a mysterious disease. It is the first — and so far only — original Canadian show commissioned by U.S. streaming giant Netflix Inc. and new Canadian rival Shomi. The world of streaming services “is a little uncharted, so you can sort of make some of the rules as you go, or at least be on the first edge of creating those new rules,” Cormican, executive vice-president of business development and production at Don Carmody Productions, said in a phone interview. “Which to me is an exciting place to be.” With Rogers Communications Inc. and Shaw Communications Inc. launching the Shomi this month and BCE Inc. announcing a future rival project codenamed “Project Latte,” it seems like, as the Wire Report recently reported, we’re on the verge of a new era of online TV. Whether Between will serve as a harbinger of potential new opportunities in the streaming age for those who make Canadian content is yet to be determined. When it was announced, it might have raised some eyebrows due to the collaboration of Netflix and Shomi, but Between will also air on Rogers’ conventional network, City, broadcasting consultant Peter Miller pointed out in a phone interview. “What I don’t think you’re going to see is original series bought exclusively for Shomi in the foreseeable future,” he said. “It’s not as if Shomi is a new and distinct buying opportunity for Canadian producers, at least not in the short term.” Because these services are meant to compete with Netflix, and are part of the companies’ TV and Internet offerings, “they’re more interested in it succeeding as a complement than as a competitor. So it’s not really in their business interest to acquire exclusive programming for that service that doesn’t also air on their broadcast services.” Whether original content is involved or not, one benefit the new services will bring to Cancon creators is increased exposure of their work, which could offset the drop in viewership linear channels are seeing, according to Canadian Media Production Association president Michael Hennessy. “So if you have a serialized Canadian drama, for instance, that requires a lot of attention to the storyline over time, you go back to the beginning or past seasons and catch up,” he said in a phone interview, noting that hasn’t always been possible under previous viewing options. “Catch-up is probably the critical thing,” he added. Because digital rights are already built into deals with broadcasters, he said he doesn’t expect such services will lead directly to higher payments for content producers. “Under terms of trade, the broadcasters have exclusivity for any affiliated over-the-top service to put any content they have acquired from us for what has been traditionally linear purposes,” Hennessy said. There might be an opportunity for producers to see additional revenue if the services buy content that they don’t already own, such as Shomi buying Bell Media content or Project Latte buying Rogers or Shaw shows, Hennessy acknowledged, but he added that companies want to keep content exclusive. “The idea necessarily, that they will sell to each other, at least initially, is a big question mark,” he said. Miller also pointed to the indirect benefit that the new Canadian streaming services offer to content creators. “If they are successful, they will encourage people to stay with cable and keep their subscriptions to cable … and help preserve that ecosystem,” he said. “It’s more of a defensive thing than an offensive thing, but it’s very important.” He added that there might be a limit on how many of these services the Canadian market can support. “Whether or not they ultimately merge in two or three years, when the operators of these services realize it’s in their interest to have one really good Canadian rather than two competing, I don’t know,” Miller said. It’s the nature of the consolidated Canadian broadcast system that a very large portion of Canadian TV content is made by the three big companies now launching streaming services. While Hennessy said there is “the potential” for some of the independent producers to sell content to the new services, he thinks “it’ll be a small part.” He noted that the biggest independent content producer is Blue Ant Media Inc., which has its own multiplatform strategy. When it comes to independent producers, broadcast consultant Kelly Lynne Ashton noted that “very little of it is the kind of content you would go to OTT for,” though there “will be some isolated opportunities for some of the biggest independents, like APTN and Vision.” There may also be an opportunity for producers to make some additional revenue from older content whose rights have expired, she said. But “is it going to be a lot of money?” she asked in a phone interview. “Probably not.” In order for the new services to differentiate themselves from Netflix, they’ll have to buy content Netflix doesn’t have, and that will likely lead to bidding wars, she said. It’ll likely be ones centering around U.S. shows, not Canadian ones, Ashton said. While it would be great to have new opportunities open to producers looking to sell their shows, Ashton noted that it’s unclear whether something like Shomi would work that way. “Is Shomi a new door or is it just a subset of the old doors? We have yet to see that.” That lack of clarity is also echoed in how Shomi is treated by the CRTC. While it and Project Latte have widely been called over-the-top (OTT) services, Shomi isn’t necessarily defined as such in the regulatory environment. According to Marni Shulman, Shomi’s head of content and programming, the service operates under the CRTC’s digital-media exemption order, but because it’s also available through the set-top box, it follows the regulations and requirements of Rogers and Shaw’s existing VOD licences. Those requirements include Canadian content quotas, closed captioning and funding of Canadian content. Shulman said Shomi will be more than 30 per cent Canadian content, and will include new Canadian content that Rogers or Shaw don’t already have the rights to. “We’re going to be acquiring and have already acquired Canadian content from many other sources that have nothing to do with Rogers and Shaw,” she said. While she couldn’t provide any more details, she said that “we will be making those announcements very shortly.” Commissioning original content “is certainly something that’s on our roadmap and certainly something we’re interested in exploring,” Shulman said, adding that more details will be released in the coming weeks and months about “what kind of Cancon we will have, what Cancon we’re going after, and whether or not as soon as we start looking at original commission, we’ll be very vocal about that as well.” She noted that Shomi’s Canadian content strategy will “continue to evolve.” “We launched the service in beta, quite purposefully, because we want to make sure we are giving Canadians what they want,” she noted. “Do we have a strategy in terms of how we’d like to support the industry and where we’d like to be? Of course we do,” Shulman said. “Do I think that’s going to evolve as we learn more about what Canadians are looking for, about what works, what doesn’t, as data is returned back based on what our customers are saying? Absolutely.” — With reporting by Anja Karadeglija at akarad@thewirereport.ca and editing by Derek Abma at dabma@thewirereport.ca

Streaming services present ‘exciting’ opportunity: production exec

Broadcast | November 14, 2014

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