TELEVISION: Former Sony Corp boss Sir Howard Stringer is spearheading a new international funding venture designed to democratise access to high-quality event dramas in the emerging streaming-TV era.
Called Atrium TV, it is described as a “Commissioning Club” that finances scripted TV entertainment of the calibre that currently only global streaming goliaths with deep pockets like Netflix and Amazon Studios can pay for.
Based in Los Angeles and London, Atrium TV aims to give the emerging new generation of smaller regional streaming platform operators around the world the means to invest in premium drama for subscribers at the local level.
“Atrium helps these new platforms compete with broadcasters and global subscription video-on-demand players by offering a solution for them to offer big-budget drama to their subscribers,” Sir Howard says in a statement.
“It is the regional streaming-TV operators that can’t afford something like (the £100m/US$129m) The Crown, which was funded by Netflix. If I can find a creative solution for them, it is Atrium TV, Jeremy Fox, Atrium TV’s CEO/Co-Founder, tells MediaTainment Finance.
Moreover, Atrium TV, which launched last month (April 2017), is promising its producers a share of the profits, a compensation strategy currently not available at Amazon or Netflix,” Fox adds.
A dramatic industry
For decades, it was the linear-TV broadcasters that funded and owned drama series, miniseries, and serials, arguably the most expensive genres with the high costs of paying for the stars, directors, producers, writers, cinematographers, set designers, international locations and costumes.
Over the years, viewers’ demands for TV fiction soared, thanks largely to the cinema-standard productions offered by US cable TV networks like HBO (The Sopranos, Sex in the City and Game of Thrones).
Atrium TV’s Fox says about 500 dramas are launching this year in the US alone where almost 80 TV channels are chasing after scripted content. Globally, other experts say, more than 1,260 new dramas premiered on TV last year.
Additionally, UK-based Digital TV Research forecasts that, by 2021, more than 380 million viewers will be paying subscriptions for streaming TV entertainment.
The Internet-powered streaming technology has enabled Netflix (a former DVD rental company) and e-commerce pioneer Amazon.com, which are both listed on the NASDAQ stock exchange, to bypass the cumbersome routes to launching broadcast TV channels.
Broadband tech has permitted them, newcomers in the business, to deliver subscription-funded on-demand TV shows directly to viewers via connected devices like smartphones and laptops anytime, anywhere.
The move has triggered the accelerating growth they are enjoying today and they are already trouncing US and European TV networks for internationally coveted industry accolades.
Netflix has won Emmy Awards and the Golden Globes for Orange is the New Black, House of Cards and The Crown. Amazon, which has already funded an Oscar-winning movie, has garnered acclaim and awards for dramas like Transparent and The Man in the High Castle.
Their entry into the drama-making market, however, is contributing to the inflationary budgets that have seen HBO’s fantasy blockbuster drama series Game of Thrones (pictured below) cost an estimated US$10m an episode (excluding the millions paid to its lead actors). It is now in its seventh season, comprising 10 episodes per season.
Sharing the costs in co-productions is now a common trend among the traditional linear-TV networks. The BBC, the UK public broadcaster and traditionally the global champion of internationally targeted high-end fiction, was not prepared to carry the total £30m (US$39m) needed for The Night Manager, last year’s six-episode action thriller based on a John Le Carré novel.
Already sold to 180-plus countries, it has become the sure-fire hit that was predicted. Yet, the BBC needed to split the costs through a co-production deal with US cable-TV network AMC and The Ink Factory, the production company owned by Le Carré’s sons Simon and Stephen Cornwell.
On the other hand, Netflix has not hesitated to commission a second season of the US$129m The Crown. Amazon also likes to spend big.
Despite the involvement of Scott Free, the production company of the phenomenally successful British Oscar-winner director/producer Ridley Scott (Alien, Blade Runner, Gladiator), the BBC turned down the opportunity to fund The Man in the High Castle, an adaptation of Philip K Dick’s 1962 cult sci-fi novel.
In 2014, Amazon Studios picked it up, invested in a pilot and, based on viewers’ reaction, commissioned a jaw-dropping five seasons immediately. Now a hit, The Man in the High Castle (pictured below) is getting ready for its third season on Amazon Prime Video.
Mind the deficit gap
Despite this apparent boom in TV dramas, Atrium TV’s founders noticed a gap.
There is growing number of regional streaming-TV platforms, from BT TV (a subsidiary of British telecoms behemoth BT Group) in the UK to digital start-ups iflix and HOOQ in the South East Asia, that are competing against the globally focused Netflix and Amazon’s Prime Video platform at a regional level.
For example, The Son (pictured below), the first TV drama starring former James Bond Pierce Brosnan since the 1980s, was made by the private equity-backed Sonar Entertainment for US-based AMC. It has been licensed exclusively in the UK to BT TV, which is not in a position to operate its own production unit for original dramas.
Atrium TV believes regional streaming platforms that are smaller than BT TV will be able to afford top-notch original fiction if they contribute to a financial pool via its Commissioning Club.
It will be one Club member per territory, with each one getting the exclusive rights to offer and exploit the show in their respective regions.
The first Club member to sign up is Viaplay, the pan-Nordic streaming service belonging to Scandinavian entertainment conglomerate MTG (Modern Times Group), another Atrium TV co-founder.
Once the participating Club members have signed up and agreed to invest in a show, the rights to the remaining territories will be made available to non-Club members via DRG, MTG’s international content-sales subsidiary. Fox (pictured) is also DRG’s CEO.
By October, he says, the first developed drama titles on Atrium TV’s plate will be offered to the Club members at international trade event MIPCOM in Cannes. The first three include The Eagle Has Landed, an original concept inspired by man’s landing on the moon and scheduled to premiere in 2019.
Atrium targets a conundrum
How long Atrium TV’s ambitions last is immaterial. But its launch reflects significant challenges to the funding of TV dramas internationally. And the involvement of Sir Howard, who also oversaw Sony’s Hollywood TV and movie production and studios during his reign, should offer some idea of Atrium TV’s high ambitions.
Jeremy Fox also insists Atrium TV will bring to streaming something the tight-lipped Netflix and Amazon have so far failed to do, which is make publicly available their actual viewing figures.
“What we lack with Netflix and Amazon is data,” he says. “There is no knowing who is watching what and how many are doing so, unless they have a hit. And we would only know that via word of mouth, an award nomination or if the show is renewed. With Atrium, members will share data to learn what their subscribers want.”
Netflix and Amazon’s influence on how dramas are now commissioned was discussed earlier this year at BVE Expo, the London trade event devoted to media and entertainment equipment suppliers.
Stewart Mackinnon, an executive producer on Amazon’s The Man in the High Castle via his company Headline Pictures, urged Europe’s linear broadcasters to increase their drama budgets or lose some of the best ideas to the streaming platforms.
“You used to be able to go to a broadcaster and they would fully fund the show. In the last 20 years, the value of investment by broadcasters in Europe has remained static at about US$1m an hour. Netflix spends five to 10 times more an hour,” he said.
At the same event, BBC Drama development executive Jonathan Lewsley said there was still room for optimism as the BBC was still committed to premium drama such as swashbuckling actioner The Musketeers (based on the Alexandre Dumas classic Three Musketeers) and the 2016 version of Tolstoy’s War and Peace (co-produced with the US’ Weinstein Company and UK independent Lookout Point).
What price independence?
But it was Rhodri Thomas, The Night Manager’s co-executive producer and The Ink Factory’s head of production, who pointed out that independent production firms are increasingly able to retain the rights to their dramas to exploit internationally, if they are prepared to accept lower cash contributions from the commissioning broadcasters.
“In the US, there are about 50 places where you can sell drama alone. In the UK, there are only four places so we go to terrestrial broadcasters first because the trade is in favour of their support,” he explained at BVE Expo.
“But if the targeted audience is international and UK broadcasters are not interested, it is great to know you can go abroad these days,” he said.
“In the UK, we got about £850,000 an hour for The Night Manager, but that amounted to one-third of the budget. We then sold the US rights to AMC for a similar rate. But they don’t own the show.”