Podcast – Updates on the Marketplace and Distribution Landscape
Screen Australia Marketplace Manager Rakel Tansley shares the latest marketplace intel and advice to get the best deals on your projects.
Rakel Tansley, Talk to Me
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Taking your project to market?
Then research is the key to a successful marketplace experience, says Screen Australia’s Marketplace Manager Rakel Tansley. Know the audience, find the right sales agent or distributor, and negotiate the best deal terms for the best possible chance of return on recoupment, Tansley advises - and "come and talk to us [the Marketplace team]".
In the latest episode of the Screen Australia podcast, Tansley walks us through the key findings of the most recent Post-Financing International distribution of projects between 2020–2023. Collated every three years, the data shows a continued interest globally in Australian content across film, television and kids’ content. And while budgets and the distribution landscape may have changed over that period, the most significant change for Tansley is the way distributors and sales agents are buying - it's all in the deal terms.
"We're seeing a much larger number of pre-sales coming in attached to finance plans, especially when comparing it to previous years, […] and we're also seeing sales agents not necessarily contributing into the finance plan." Tansley says. So, knowing your audience and researching the market is key.
Throughout the episode, Tansley breaks down the key terms of finance plans and the market, and explains the role of the Marketplace team in supporting Australian producers navigate domestic and global deals, as well as the resources publicly available on the Screen Australia website. She also talks to the current trend of rights, how to make IP and secondary rights work for you, the hidden costs to watch out for when building a finance plan, and shares the top five key territories and regions buying Australian film and television, both in terms of volume of sales and highest spendings.
"There's still a really insatiable appetite for Australian content," Tansley reveals. "It's really important that our producers have that global lens when they're creating content, […] because we have a much wider audience and our stories travel exceptionally well."
To contact Marketplace, email [email protected] or find out more about the resources and research available through Marketplace here.
Further Reading and Resources
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AUDIO TRANSCRIPT
[00:00:06] Aimée Lindorff Welcome to this Screen Australia podcast. I'm Aimée Lindorff with Screen Australia's online publication Screen News. I'd like to firstly acknowledge the various countries you are listening in from the Unceded lands of Aboriginal and Torres Strait Islander people. This podcast has been produced on the lands of the Gadigal people of the larger Eora nation, the traditional custodians and first storytellers of this region. Always was. Always will be. We've got a huge episode for you today as we talk with Screen Australia's Marketplace Manager, Rakel Tansley, about the latest insights in domestic and international sales markets. You might remember Rakel from her last appearance on the podcast in 2021 where she introduced us to the marketplace. What it is, what they do and how best to use the data and resources available. It's been a few years, so we've invited Rakel back to provide insight in the current trends in the market and advice for producers considering deal terms, IP and license rights. The Marketplace team have also just released the three-year international post contracting sales outcomes for 2020 to 2023. And Rakel walks us through some of the key takeaways from that data and the changes in the distribution and sales landscape since the last round of reportables. There is a bit of assumed knowledge about the industry, so if there's any terms you're unfamiliar with, check out the show notes for links to previous podcast episodes on marketplace finance plans and distribution, as well as a range of resources available from the Screen Australia website about finance plans and agreements. Remember, you can subscribe to the podcast through places like Spotify and iTunes, where you can leave a rating and review. Any feedback can be sent to [email protected] and don't miss the latest funding announcements, opportunities, videos and more by subscribing to Screen Australia's industry news now. Here's Rakel Tansley from Screen Australia. Rakel, welcome back to the Screen Australia podcast.
[00:02:01] Rakel Tansley Thanks for having me.
[00:02:02] Aimée Lindorff For those you haven't met before, what is your role at Screen Australia and what do you do?
[00:02:07] Rakel Tansley I'm the Marketplace manager at the Screen Australia and we work with producers across from late development right through to post financing sales in the marketplace. So we look at their deal terms, their post financing sales, their finance plans and who they are attached to in the marketplace.
[00:02:25] Aimée Lindorff Awesome. So what is Marketplace and how does it fit into Screen Australia?
[00:02:29] Rakel Tansley Marketplace is ultimately the project who you attach to in your project. So in your finance plan, you have the marketplace that sits at the top of your finance plan, and it's normally your rest of world distributor, your ANZ distributor, your commissioning broadcaster and your sales agent, depending on whether you're doing film or TV. And it's those people that then take your project out to the marketplace to sell domestically and internationally to find an audience.
[00:02:59] Aimée Lindorff And you mentioned distributors, you mentioned, sales agents. What's the difference there?
[00:03:03] Rakel Tansley We normally refer to a sales agent when it comes to film and a distributor we normally refer to from an international distributor for TV. However, when we refer to an ANZ distributor here domestically, we're talking about film and ANZ.
[00:03:20] Aimée Lindorff That's Australia-New Zealand, correct? So ANZ and rest of world, how different are the domestic and international markets?
[00:03:28] Rakel Tansley Very different. So ANZ obviously is a very is a smaller market. There's only so many distributors here and so many commissioning broadcasters. However, we especially when you're coming into great Australia funding, you have to have one of those attached. Rest of world, obviously way bigger market, bigger population, way more distributors and broadcasters to sell to. Whether individually or globally like a buyout. So yes, it is very different. The rights all remain the same, how they split up, but just the selling capacity. It's a much smaller market here.
[00:04:02] Aimée Lindorff Sure. Now, Marketplace, we've talked about rights already. We've talked about distributors, we've talked about sales agents, we've talked about domestic, we've talked about international. And we're two minutes in.
[00:04:14] Rakel Tansley We've got heaps to talk about. Heaps!
[00:04:16] Aimée Lindorff It sounds like the scope of marketplace is really quite large in terms of what it encompasses.
[00:04:22] Rakel Tansley Yes. so I said, we will work with producers mainly very late development when they're about to go into an attach their marketplace. So we will do that. We will then work with them on their post financing sales. We will work with them on their deal terms for their sales agent or their distributor. And then we work with those sales agents and distributors as well, like when the deals are selling. And then right at the back end, we also track the recruitment of all Screen Australia equity investment funding projects, and we report back to the producers and work with them around the cams and the dasses, which we can talk about later. But yes, so it is, it's, it's pretty much from a sales and distribution marketing. And then obviously recruitment and business affairs is what the Marketplace team tries to cover.
[00:05:13] Aimée Lindorff So it's not just about where the money's coming from. It's also who gets rights to what and where it's going and then collecting that data at the end so that we can kind of compare it to the rest of the industry.
[00:05:22] Rakel Tansley Absolutely. And we also producers, obviously, the data that we receive. So reporting is a big thing for us and should be for producers. We are in a really privileged position because we get to see globally what is happening with all Screen Australia funded projects. So we get to see who's attached to the marketplace, what type of deal terms are being done in the marketplace, what rights are being sold across the globe, what they're paying for those rights, and then obviously the reporting that comes through and the recruitment that comes through. So the biggest thing for us is confidentiality. So any data that we do put up on the website or we talk about today will always be treated in confidence. I'll never mention a project by name, but yeah, and that's why it's one thing is really important for producers to also get on top of their own reporting because it helps them for this project and their other slate that's coming in and about relationships and who's buying and acquiring their content, because that's what this industry is about, building relationships and taking your next project out to market. And especially if you've already got a relationship with someone, it's easier to contact them directly instead of going around and trying to find, who should I talk to?
[00:06:37] Aimée Lindorff So why does Screen Australia track this kind of data?
[00:06:41] Rakel Tansley We track it because one, it's government funded money. So it's really important that we can report back to government what we're seeing. It's also really important. The biggest thing is in marketplace. Most of the time we are advocating for the producer. If we are at the table with a sales agent or a distributor or a broadcaster, we're trying to ensure that the marketplace is fair and reasonable across the board for everyone. Because without you distributors, without your broadcasters, without your sales agents, there is no audience for your project. So we collect that data. To us, that is where the gold comes from. So as much as we like to see really big MG's or license fees paid on things, that's all great. But it's also the deal terms because it informs trends, it informs what is happening with our industry and for us, we want to make sure that all of our production companies are as sustainable as possible for their next project and long term projects.
[00:07:39] Aimée Lindorff And MG, just to confirm, that's minimum guarantee?
[00:07:43] Rakel Tansley Correct.
[00:07:43] Aimée Lindorff And really, then that helps you then track the trends in the buying market?
[00:07:47] Rakel Tansley Yeah.
[00:07:48] Aimée Lindorff Okay. So let's take a step back. Producers are coming to the marketplace. They're sharing this data with with you guys. What would you expect to see and what kind of advice would you have for producers?
[00:08:00] Rakel Tansley So when they coming to us in the marketplace or talking to their investment managers in late development, we want them to either, for TV have their pitch deck ready. And for film they first look because we find that sales agents, they don't want the pitch deck with these can be up to 12 or however many pages long as long as tonely it's telling what the. Or the TV project is about. But with the first look 1 or 2 pages, one of the biggest thing is that. We want producers to research their sales agents and distributors before they go out to the marketplace so they can come and talk to us and we can say, Well, I want to see their pitch deck or their first look so I can totally see what the project is. I don't have to read the script and then we can look and say, Well, we think you should probably reach out to these distributor, all these sales agents, because that's the type of content they're taking, or they don't actually have anything like that on their slate because there's no point talking to a sales agent that has the same story genre that already on their books and they're taking it out to the marketplace at the same time. So it's really important that the the pitch deck, the first look, knowing the audience. So when people are writing, they really they know who they're writing for. So aligning you a writer with a producer, it's really important that everyone is on the same page of knowing their audience and knowing the pathway to audience. So whether it is going to a streamer, whether it should have a cinematic release, is this going to find more eyeballs because of the demographics for free to air, or is this something that is probably better served on pay TV or is it a streamer? So it's really knowing the pathway to audience. And we found recently, like Lionsgate has actually partnered with Nielsen's, which is a ratings data analysis and for their fast channel movies because they're looking at the audience engagement, who is, what channels they're watching, because that is then determining what content they're acquiring. But it's really important that our producers have that global lens when they're creating content, not just the ANZ bubble for Australian stories here, because we have a much wider audience and our stories travel exceptionally well. So research a sales agent and an ANZ distributor, see what's on their existing slate. And we also have a thing on our website under support and funding across features, television and First Nations, where because we were getting so many inquiries of who should I be talking to? from film to TV so producers can now go, all right, anyone can go in and have a look and search on whether it's an ANZ distributor, North American sales agent or distributor in a rest of world sales agent, they can search by TV, film, documentary and they can search by genre. And all of a sudden it'll give you a drop list of the sales agents. They contact details and what is already on their slate. And the data goes back seven years. So from today's date to seven years. So you can actually then go, okay, well, I've got a spider movie. They've got three spider movies. I'm not going to talk to them because it's wasting their time and it's wasting the sales agents time. So that is available to everyone for them to have a look at. But we also really encourage that when they're looking that they are aligning themselves with the right producer or the right sales agent or distributor because ultimately we want those people to elevate the project and get it out to a strong marketplace so no matter what. Come and talk to us early and you can talk to Screen Australia Marketplace whether you've received Screen Australia funding or not. However, the disclaimer is that our SA funded projects do take priority, but we also really encourage producers to talk to the marketplace early because they want you talking and they are sales agents and distibutors are very aware of Australian creatives and they're actively looking at the talent that we have and they tracking those writers, directors and producers as well, because they want to be, they want to know about their projects early.
[00:12:18] Aimée Lindorff It's interesting, I think you said those key elements, including research, your sales agents and distributors and knowing who your audience is because you can't really do one without the other. If you know who your audiences and you're going to a sales agent or distributor who doesn't serve that audience well, then you've wasted their time. You've wasted your own time when you could be looking somewhere else. So that's where Marketplace comes in. Yeah.
[00:12:38] Rakel Tansley And you don't want to burn the bridge. You don't want to burn the relationship. You don't want to waste your time. You don't want to waste their time. Not because getting back through that door for the next project will be harder.
[00:12:47] Aimée Lindorff So for producers who are moving on to the next step of financing or developing a finance plan, what has changed in the market and what should they be thinking about when it comes to financing?
[00:12:58] Rakel Tansley When it comes to financing the project? We are for film. We're seeing a much larger number of pre-sales coming in attached to finance plans, especially when comparing it to previous years. We also seeing advances in MGs, but we also when it comes to film, we're seeing sales agents not necessarily contributing MGs into the finance plan. And as much as a producer wants the money, you know, they need to meet their budget. Sometimes it's not a bad thing to not be recouping behind an MG or advance because then you can negotiate a lower commission what your expenses are and you're not, all of a sudden that first dollar of money that comes in once the commission is taken out, is coming in to you and your investors or you know, or it's paying out you gap or things like that. So it's really important that when those things do come in and it's not filling the finance plan, that they are really mindful of the gap and but also reducing the commission. We know that budgets are increasing box office and back end is contracting. So we all need to be also looking at what other avenues there are and especially around private investment for domestic and international. What are the possibilities available? We are seeing more and more private equity investment coming in on Australian projects, but this is also something that takes time and nurture because it's not coming to a federal or state agency and putting in the application and asking for money. It's a different skill set to have when you're dealing with private equity investments and especially with corporations. So we encourage producers to be having really early discussions to try and find rest of world money and not be scrambling two weeks before they're coming in to us with their application because that's not going to serve anyone and it's just going to create more stress for producers.
[00:14:53] Aimée Lindorff So with that, so when you've got private equity, obviously their concept of returns is going to influence, then you're back and once that money comes in as well. So their expectations are going to be different to a state or federal funding agent.
[00:15:05] Rakel Tansley Yeah, absolutely. And it's one of those things where, like I said, it's it is a different skill set because producers are all about financing the project, making the project and getting it out to market. But when you do have private equity investment or you have any investors in, you need to also be taking them along the path and keeping them up to speed and communicating with them. You can't just leave them in the back room and say, okay, we might see some money on this project, See you in three years. Yeah, that's right. So yeah, it's it's really important that one you lock in your deal terms, especially when it comes to equity investment, because at the end of the day, if you can get the deal terms done right upfront then it's better for everyone. Everyone knows where they stand. But I think it all comes back to if you can have a relationship with your sales agents, distributor or your investors and you have sold to them that you have the confidence of the project and knowing the audience and how that's going out, then it does set the scene because at the end of the day, everyone is risk averse. People are wanting to see great scripts that resonate across the globe with, you know, ideally recognisable cast. However, they're always the exception to the rule and we've all recently seen that. But I think people need to understand that it's not a global story. It's more how the story's being told and is is an Australian story being told that, you know, someone in Spain or in another territory around the globe can resonate at some level with that project that you're telling. And when we look at the daughter of the type of projects that were being discussed last year, it was around comedy. This year it's around horror. And internationally all we hear about because people are risk adverse is about genre and also existing IP. So if there's already existing IP that is worked in one format, then it's definitely something we're seeing internationally that distributors and sales agents are leaning into because they know what they're going to get with that.
[00:17:17] Aimée Lindorff And they've got a built in audience there as well.
[00:17:19] Rakel Tansley Exactly. And we are seeing, based on the data, the US is definitely not buying the same way in international markets. What used to be like a sales flurry, like you go to Kano, Berlin or Toronto, Sundance, it's taking multiple markets now to generate those sales, which is not a bad thing. Everyone is a little bit more cautious because everyone's got a budget, you know, budget to make your project budget to for sales agents and distributors. But I think producers really need to understand that what doesn't work in ANZ we find works extremely well internationally. And this past year the Marketplace team captured. So we do a review every 12 months of all post financing sales. So what that means is any sales that they're not pre-sales, they're not sales that are in the finance plan, it's the budget has been logged off, it's gone out to market and your sales agents and your distributors start selling your project. And we captured 969 post financing sales, which was a 47% increase on the previous year's sales. It's amazing. And that's what I mean, our stories do travel. And the highest number of sales this year came in May when the previous year it was June. I don't know why there's a month difference, but that was the highest peak in the market. And the last two financial years, adults TV had the highest number and the volume of sales when compared to features and kids TV drama. However, the value of sales, meaning the price being paid when comparing it to the previous financial year. There wasn't much difference though we did see it was a 5.7% increase.
[00:19:02] Aimée Lindorff That's so interesting. Just in 12 months, that market difference in how the market has moved.
[00:19:07] Rakel Tansley Yeah. Well, if you look at the networks and streamers they're reducing the number of acquisitions. And as previously mentioned, costs are going up. And they too, have to manage their budgets. They look at how expensive the project is, who's their audience and how they're going to package it out to. Market stream is seem to be shifting. What we're seeing is from growing subscribers to increasing audience engagement, hence the whole Lionsgate, movies fear nielsen because it's about retention and audience.
[00:19:38] Aimée Lindorff Particularly because there's so much in the market now in terms of streamers and as well that it's more about the engagement than it is about acquisition of subscribers. How do we interpret that change and what have you seen in terms of the impact on sales of Australian content?
[00:19:55] Rakel Tansley There's still a really insatiable appetite for Australian content, especially in Europe. Before everyone would go to the US. You know, try and get that big US sale that would then give market confidence to the European market. It's really different now. Like we're seeing that Europe is not buying content the way they used to, but they offer Australian content. So on the Screen Australia website, we actually have just also updated our post financing sales listing. So the data now captures from 2020 to the 31st of December 2023. So producers can use that as an area for reference for various types of deals and fees they could expect across territories. But it's post financing, sales, not pre-sales. And overall, when we compare, this is a lot of data. I'm going to go through, but it's really interesting. If it still excites me, I'm excited and everyone else should be excited. So overall, when we compared the sales from the previous dataset, which is 2016 to 2020, we've seen a 54% increase in the number of sales from adults TV 16% increase across features and a 50% increase on kids TV. So if that does not tell you that people resonate with our stories across the globe and this is just international. I'm not even talking about domestic.
[00:21:18] Aimée Lindorff And thats foreign language markets, that's the US and UK. So it's not just English speaking regions.
[00:21:24] Rakel Tansley Well, exactly. So when we compared the data there was previously there was no sales for kids TV into China or Japan. Yet the past three years we're now seeing sales from those territories. And overall with kids TV, we've seen an increase in all sales into major territories, especially around Canada, North America. Middle East, Poland, Spain and Scandinavia. But we did see a small decrease in Africa and Benelux, but that's what I mean. We do record. All the sales information at a really granular level because we want to see where our stories are travelling.
[00:21:59] Aimée Lindorff Can I just clarify too, with when you talk about territories, you've mentioned Canada, Spain, Germany, but then you mentioned Africa as as a bigger territory.
[00:22:08] Rakel Tansley It's more we would determine that as a region, but it falls under the category of territory because. Most of the times they'll be they'll buy it for all of Africa or they'll buy it for South Africa. But for this conversation, I'm just going to bundle it all together and say Africa. So I hope no one's offended. Okay. So, like, North America is made up of Canada and USA and Peru. Scandinavia is a region made up of four different territories. Right. So yeah, region is more an area mess area made up of individual territories where if I refer to territories, it's mainly like that individual territory, which could be just Ireland or Canada or Spain.
[00:22:49] Aimée Lindorff Yeah, great.
[00:22:49] Rakel Tansley But going back to kids, there has been increasing prices being paid for kids across major territories, with the exception of Africa and France and Italy, where we did see a slight decline in the prices that the fees that they're the images and license fees that they're willing to pay. But features we actually across all major territories, we did see a slight decrease. So even though we saw when we look at the last three years, we've seen an increase of 16% of sales features. We did see a decrease in the fees being paid for feature films. However, there was an increase for France in the U.K., both Germany and considering Germany's in a recession, Germany, North America have remained consistent in their fee structure. The license fees being paid. We did see a slight decrease in the number of sales in both of those territories. But unlike kids, we've seen a larger increase in sales to Africa and Spain that have remained consistent. And we've also seen an increase in the number of sales and acquisitions of film into Italy, Japan, Latin America, Middle East, North America, Poland, Portugal and the UK. So that's what I mean. Like if you're looking for presales, here's a whole heap of data. These territories are acquiring our content. And there's an increase in them acquiring our content. So work with your, sales agents and distributors, or even if you need to go out beforehand and contact a broadcast or distributor within one of those specific territories, you might have them to form part of a pre-sale into your finance plan. So you might plug a hole, if you don't get necessarily an advance or an MG from your rest of world sales agent, then you might be able to fill it with the presale.
[00:24:32] Aimée Lindorff And be a bit more targeted in terms of who you're approaching. Based on that data that's being collated.
[00:24:38] Rakel Tansley That's right. So we've broken it down into kids TV, features and adults TV drama and for adults TV, we've seen a slight decrease in the number of sales into the USA, Middle East, India and Africa. Yet Europe, like when I was talking earlier about how they've really got this insatiable appetite for our content remains strong, like Poland, Portugal, Scandinavia and Spain, other territories. We've also seen an increase for adults TV across Latin America, China and Canada. We have seen stronger license fees being paid from Africa, Benelux, France and Latin America, North America and Scandinavia when compared to the previous years. So that's what we try and do. We're trying to look at where are the trends? What rights are being taken, what territories are acquiring it. So when we do, Hassel producers and under the terms of the PIA, they need to report.
[00:25:29] Aimée Lindorff Sorry, the PIA?.
[00:25:30] Rakel Tansley Production investment agreement.
[00:25:32] Aimée Lindorff Fabulous. Carry on.
[00:25:33] Rakel Tansley It's really important to get these reports because we can then aggregate the data to then inform people and the industry. This is where our projects are selling. This is what they're acquiring. This is the type of fees that you can expect to be paid from those territories. And it's like again, constantly having that global lens because what necessarily may or may not work, here does work internationally and our stories do travel exceptionally well. And I think it's one of those things that when there is a market and even if the first market, there weren't a lot of sales, I think it's really important that producers contact their sales agents and their distributors and go, Hey, send me a sales listing. Who did it go out to? Who passed? Why did they pass? Because it might not help this project, but it will help you next project.
[00:26:23] Aimée Lindorff And you mention it features TV and kids. Where does online and documentary fit into them?
[00:26:29] Rakel Tansley Well, because online and documentaries are predominantly given as grants at screen Australia. We don't actively track those projects because there is no recoupment to come back in. We have a small data set of what happens and when. When we say online, I'm talking the online fund. I'm not talking online as in streamers. But yeah, because they are predominantly given as grants. The producers obligations to report back to us are a little bit different.
[00:26:58] Aimée Lindorff Does lead me to my next question about sourcing that data. It's through producers reporting as part of their recoupment process.
[00:27:07] Rakel Tansley Yeah, it is. And my sales agents and distributors, when we're negotiating the contracts, there will always be a reporting clause. It's a. Global thing. They all do it. And ideally it's around quarterly, semi-annual and annual. If you've got a CAM people.
[00:27:23] Aimée Lindorff Sorry, now CAM, second time you've mentioned CAM.
[00:27:25] Rakel Tansley Sorry, collection account management. So under the terms of trade at screen Australia when it's for film, you have to engage with the CAM so all investors and beneficiaries of any recoupment. So the waterfall, the CAM looks after that. So first dollar will go into the CAM and then the CAM will report to everyone of what money's coming in from these all these sales across the globe and who's getting their commission and their expenses and then what investors are sharing, you know what? Gap's being paid down.
[00:27:55] Aimée Lindorff And that's the waterfall then as to who gets paid what and when.
[00:27:58] Rakel Tansley Correct. Yeah. So once all the sales agency agreements and all the distributors of ANZ distributor agreements are all finalised, the CAM takes all of those agreements and then creates the waterfall to make sure that all the contracting obligations are being met. So ultimately the CAM will also override all those other agreements. So it's really important though that just because there's a CAM or there's a DAS, which is a disbursement account service for TV, which is any net proceeds, so that international distributor will take off their commission and their expenses recoup their advance. And then any money that's then left over as net proceeds then goes to the DAS and then the DAS then disperses as per the waterfall. But it's really important that they don't just rely on the CAM reporting that they actually reach out to their sales agent or their distributor and says, Hey, what's happening with my project?
[00:28:50] Aimée Lindorff They're actively involved.
[00:28:51] Rakel Tansley You have to be actively involved. You can't just hand it over. And I know it's really hard because most producers have a slate that they're working with, so they've already moved on to the next project. But if we talk about the Long Tail, so Marketplace always bangs on about the long tail, how long it's been in the marketplace, because the longer it's in the marketplace, the more return of investment to the producer and to us. I've mentioned before, like for film and TV, we predominantly see territory by territory sales rather than a global sale or a stream and doing a buyout. And we are seeing more and more streamers coming in as post financing sales. So they're not part of the finance plan and we see individual rights sold as secondary, right? So if you have a TV project and it goes to your first commissioning platform, then once that license period is up, then it can go somewhere else, it can go to pay TV or it can go to a stream or it can go to video. So they have the secondary rights. But when we looked at the review of these financial year, those 969 sales this financial year, broadcast licenses represent around 70% of sales when compared to 62% from the previous year. So again, another uplift. This is the interesting thing and that's why we say keep an eye on your project and when you license periods are ending and things like that because they were 137 re licenses this financial year and for the same period last year, they were only 75 relicenses. And this financial year we saw 137.
[00:30:25] Aimée Lindorff That's interesting is that because people are licensing for shorter terms or it just happens that we've hit that period in the market where people's licenses have run up.
[00:30:33] Rakel Tansley And also audience engagement. So people are now looking more and more like it's about retaining audience. So if something is working, they want to keep it on there or if there's another sequel coming in for TV. They don't want the first series going elsewhere. So it's about "oh we want to re license this" and you know and depending on the right you know when we're looking at the individual rights this past financial year we saw a shift and the free to air rights compared to the previous year so free to air is sitting at the top of our table of the rights being sold where the privacy previous year S VOD streamers was sitting at the top. So we are definitely seeing secondary sales as well, like to free VOD. So like here Iview or broadcast video on demand and we even had another project that had its first broadcast on another commissioning platform and then got picked up on another platform for free VOD as a non-exclusive. So it's really important as well that when you are negotiating your rights and you're looking at the platforms to try and push those non-exclusive secondary rights, So it's already been somewhere and then it's going somewhere else because the more platforms you can get your project on to, the bigger your audience is.
[00:31:53] Aimée Lindorff It sounds like certainly compared to the last year or even the last three year reporting period. There's been some big changes. What would you say is the most significant change?
[00:32:04] Rakel Tansley The most significant change is just the way people are buying. That would be the difference. And the increase of sales that we are seeing. That's very clear across all of our content for scripted drama. Predominantly, we have seen an uplift in sales. When we talk about the rights being sold and the granting of those rights, the long tail, I think as well. This financial year we had a film that's been in the marketplace for over 40 years and it's still bringing in gross receipts. As of last month, 40 years.
[00:32:40] Aimée Lindorff So in 1984 and it's still still bringing in the dollars.
[00:32:44] Rakel Tansley Still bringing in the dollars. I think that's the biggest thing. Whether your film released ten years ago or two years ago, you got to keep an eye on it. Check how it's performing in the various territories, not just here. You know, have those license periods expired? Could there be re licenses? What are the opportunities for your project? And I think that's the biggest thing that when Screen Australia did revert our share of gross receipts. It was because we wanted producers to take their projects and run with them and see what other opportunities there were . Last month as well, we had a TV adults program that been in the marketplace for just shy of ten years and in the month it sold the free to air rights, the pay-TV rights, the S vod rights and the B vid rights across Cyprus, UK, Slovakia, Latin America and Ukraine.
[00:33:32] Aimée Lindorff Those are some very interesting territories.
[00:33:35] Rakel Tansley That's what I mean. There is plenty of opportunity for producers to be looking at the long tail. More and more need to be looking at the long tail because there is recoupment to be made. There are more platforms, there are more fast channels coming online, and they're looking at content and they're looking at audience engagement. So if you've already got any existing IP that either well at box office here domestically or it did really good audience ratings. If you've already got half your marketplace information to then take somewhere and go, "Hey, it did this, are you interested in my project for your platform?" And I think the thing is, when it comes to film, we are still seeing the ANZ market still doing the theatrical release, like in traditional windowing sense and obviously how that film performs in that first week's performance then determines how long it is on screens. Previously it used to be 90 to 120 days, but now the kind of that unspoken rule is about 45 days. But it's not just the post financing sales and what's happening after you projects in market, people and producers really need to be looking at the marketing assets because they play a large part word of mouth campaigns and depending on your demographic. Again, going back to knowing your audience and pathway to audience. Considering the creation of those assets in pre, it should all be part of your pre-production and talk to your distributors and your sales agents and work with them. Because without them there is no audience. But it's also the downstream, right? So from film, when we talk about the re licenses for broadcasters, same for film. Once it has its theatrical window or it goes to a streamer, there's other downstream rights. It's knowing the value of those rights, and you need those rights to possibly see a return as well on your investors. It's the same as anything. S VOD Rights. 11 years ago, we didn't even know what the value was. Everyone was like, What is this streaming platform and how much is it? Should I be paying for a licence fee or charging for a licence fee? And now that we know what those values are, it's like looking at the splits. The devil's in the detail with your deal terms as well. There's a checklist that we do actually have under sales and distribution in your funding support area that producers can reference on what we've been seeing across the globe and domestically around commissions and expenses and backend splits.
[00:36:01] Aimée Lindorff And that checklist is available on the Screen Australia website and I'll include that also in the show notes. So make sure you read the article attached because there'll be some extra linkage and a lot more resources available to talk about some of those things.
[00:36:14] Rakel Tansley Yeah. And the post financing sales would be up there as well.
[00:36:17]Aimée Lindorff Absolutely. Coming back to those global sales, what are some of the changes you've seen in the new three year reportings?
[00:36:24] Rakel Tansley We quite often get asked like, do our stories get the theatrical release internationally? And absolutely. One of the things that we look at, other than the trend of rights and who's buying what is we do. You've heard before the territories where there's been an uplift or an increase or decrease in the fees or who's acquiring what. But we break our territories down because it's really hard to like someone else. To me. What's the best performing territory? Or the top ten territories? But we look at it as two things the volume of sales going into that territory that may not necessarily pay the best license fee or MG, and then the top performing territories that are paying the dollars, it's the top three for the volume is United Kingdom, Canada and USA and Germany, I'm saying Germany and also Israel.
[00:37:21] Aimée Lindorff Top for you, rephrase that. So our top five. US, UK, Canada. Germany Israel.
[00:37:28] Rakel Tansley Yeah, UK, Canada, USA, Germany and Israel. They're our top five. That's in the volume of sales. And then the ones that had the biggest bang in the budget was again the UK, North America, USA Germany again and Canada. So our top five. But then when we looked as well at I'll talk to, nine and ten, Italy and Japan came in at nine and ten where the previous financial year they weren't even on the Richter of what we were saying. But they had the biggest they were paying the bigger license fees as well.
[00:38:03] Aimée Lindorff And that's where talking to the marketplace team is really helpful in terms of identifying the regions and territories that might be interested in the content that you are delivering.
[00:38:12] Rakel Tansley Yeah, absolutely. But it all comes down once you've got your marketplace attached, it comes down to the deal terms and knowing what the deal terms are, what you are signing up to. And it's for any producer, it's all about getting those deal terms right.
[00:38:28] Aimée Lindorff What do you recommend that they look for in those terms?
[00:38:31] Rakel Tansley If you look at the advance or MG, just a couple of little points is. When you're dealing with internationals and advanced MG The first question you ask is that net withholding tax? Because they might just say, we're going to give you $200,000. And if there's no other language in there that could be grossed up. So depending on the withholding tax, depending on the country or instantly, you could have a shortfall in your production budget. So always ask for net of withholding tax and the advances of how much is being cash flow into your production budget, What are the payment milestones and what then needs to be covered by gap financing until you receive those milestone payments because you're paying high interest on your gap as well and around the payment terms, especially around TB, not for payment terms to be dependent on the release. The number of screens that it has to go out on or cost availability because you might have yours cast attached early and then you got your distributor that comes in and says, actually I need that cast available for PR for 3 to 5 days. But it's not in your cast agreement. So instantly if there's a 5% payment that's due on that milestone, you've already got a 5% shortfall. So it's things like that because ultimately we don't want there to be shortfalls in production budgets. But I think no matter what, try and hold on to your IP, don't give it away in the backend or upfront in your finance plan. Rights What rights are being granted? Look at what to withhold possibly like if you were doing kids content, how would you merch rights? Because ultimately you'd want to probably give it to a company that specialises in merchandising and it's another revenue stream for you and your investors. Formats, clip rights and games. You know, we're seeing more and more expansion into games in the TV market and international shows. We're seeing that IP going into games. Look at Netflix. You can play and interact on Netflix now with like Emily in Paris and selling sunsets. And so those existing strong IPS and now they're turning them into games. You know, we're all very good at head down bum up, blinkers on because we want to get it funded and made but it's what possible rights are down the line for your project. So if something does work really well, could you possibly turn it into a game later down the track? And I think the other thing is definitions. Most people will engage a lawyer. You can come and talk to us and we will look at those deal terms and advise and suggest as much as possible. But, you know, you don't want your TV and your S vod sitting under your video rights when the distributers taking possibly 80% royalty on the video rights when it's a TV. Yep. So they should be taking a smaller commission and more ideally in favour of the producer and understanding those backend split. So when your project is starting to work, what are the commission and royalties against those rights? Are they inclusive of any sub agent, especially expenses? Are they... who's share the expenses coming from? Or are they coming off the top? All of that information, as much as it seems trivial and you just go, who cares? I just want to sign the agreement. I just want the money in my finance plan. Ultimately, it's going to hurt you later down the line. And we've seen that recently with producers where we actually successfully either unpicked contracts or we've negotiated upfront to make better deal terms for producers, because again, we're in a very privileged position where we get to see globally what people are paying for across the board.
[00:42:22] Aimée Lindorff And what the trends and expectations of the other areas of the industry are.
[00:42:25] Rakel Tansley Yeah. And you know, you don't want to be signed into a distributor or a sales agent. Like what's the term? Is it 15 plus years? Is there a good termination clause to get you out of it if they're not performing well terms not to be automatically extended or rolled or definitely not in perpetuity, limiting first and last matching rights as well. So you're not going back and forth constantly negotiating. And I think the biggest thing for Screen Australia's perspective, we do not like to see interest on MG's or advances or expenses and especially when, again, knowing the language and you hope your lawyers on to it. But when anyone says, "oh it's the prime rate plus a percentage", currently the prime rate is 8.5%, so if that's that plus prime rate plus 1% or 2%, you're paying over 10% in interest. You're never going to see a cent come back to you, and especially if it's taken on expenses. So the US is the exception. We would accept expense on an advance, but we will not accept any expense on the expenses. However, we're very mindful here that that's not always the case and Screen Australia is not at the table. So it's. Really up to the producer and the lawyer to push back as much as possible, because ultimately you want those back end splits. You want them coming to you. We want you to be sustainable to keep making projects.
[00:43:50] Aimée Lindorff Screen Australia, if you receive funding from Screen Australia is effectively an investor, so they will work with you to make sure that you get the optimum rights. But that's not to say you shouldn't have a lawyer engaged.
[00:44:02] Rakel Tansley Absolutely. In an ideal scenario, this is how I'd like it to play out. So you would come to Marketplace early and you're already got marketplace that you're in discussions with and you want to go, "Hey, what about these guys? What are they like attached to anything? How do they perform? What Intel does the marketplace have?" And we can help with that. We can help you with relationships or possibly who you could talk to. Or you've already got the deal terms and we're negotiating the deal terms with you and with your lawyer prior to you coming in for funding, because then it just speeds up the process of contracting between the producers, lawyer and the Screen Australia's lawyer and any other investor who's a beneficiary, who's a party to all of that in the waterfall, in the recoupment, but yet always have a lawyer. But we can look at that level of detail and assist producers who haven't received Sreen Australia funding.
[00:45:03] Aimée Lindorff Even if you do apply for Screen Australia funding, but you're unsuccessful, you still then have that knowledge, you still then have that brokerage at the beginning where you've set up for success regardless of which direction you go for funding.
[00:45:15] Rakel Tansley And even if you were to come in for funding and we're working out deal terms early in the piece prior to application because I don't want to see producers with their backs against the wall negotiating because you're in for funding and the decisions being done and we're going back and forth and you know, I just, I just need the money or I just need this and can you just agree to these? That's a really bad position for everyone. No one wants to do that, and it doesn't do well for ongoing relationships. But if you are unsuccessful for funding, then at least we've advocated on your behalf with the deal terms for you to then move forward.
[00:45:54] Aimée Lindorff Before we wrap up, if a producer is going out to market, say, tomorrow, what should they be thinking about?
[00:46:00] Rakel Tansley Firstly, they should already know who they're meeting with. Don't just rock up to a market and not have any meetings organised. If it's TV, have your pitch deck, film, have your first look and just go in knowing with that one key project, don't try and sell your whole slate.
[00:46:17] Aimée Lindorff Okay, so not having a slate ready, just one project.
[00:46:20] Rakel Tansley If that's your key focus and that's what you're trying to get off the ground there and then that's absolutely your focus. Because it can get confusing. The sales agent will then, you know, your slate, the sales agent or distributer, will say, "hey, what else have you got?" And then you can rattle off or I can send you materials later, but you focus on the project you want funded there and then to take into production.
[00:46:43] Aimée Lindorff And that ties back into knowing who your audience is doing your research about the sales agent, targeting your pitch to that person or to that company.
00:46:51] Rakel Tansley Absolutely. And knowing which market that you're going to as well, like you're not going to can if you have got kids content and TV, you should be going to meet Junior. You know, it's you know, it's one of those things. It's yeah, you need to do the research. It's just as important as anything else.
[00:47:10] Aimée Lindorff Excellent. And you can find those resources in the show notes and on the Screen Australia website.
[00:47:15] Rakel Tansley Fantastic.
[00:47:16] Aimée Lindorff Thank you so much Rakel. I really appreciate your time.
[00:47:18] Rakel Tansley Thanks for having me.
[00:47:21] Aimée Lindorff A big thanks to Screen Australia's Marketplace Manager, Rakel Tansley, for joining us this episode. Head to the Screen Australia website for more information about the resources available through Marketplace. Or get in touch with Rakel and the team at [email protected] don't forget to subscribe to Screen Australia's industry news for the latest funding, announcements, opportunities and more. Thanks for listening.
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