Covid-19: the challenges of an ever-changing industry

By Fabricio Ferrara

Over 20 key executives in APAC, EMEA, USA and the Americas have been consulted by Prensario to know in which stage are their businesses and which will be the next steps. Most of them are reticent in the short term, as they consider the impact in the economy due to the expansion of Covid-19 will be huge. But, they continue investing in existing and new developments to be ready when the quarantine finishes. 

At the same time, linear TV services are winning viewership in almost every country, especially because of the increase in the news and journalistic programs. In this context, global networks have adapted very well amid Coronavirus pandemic because it is the media with the best penetration and more credibility among the population. 

OTTs keep expanding with new subscribers and opening new markets, as Disney+, which has gained 5 million clients on its European launch on March 24. Strategy Analytics calculated in global subscriptions would increase by 5% in comparison to the pre-pandemic model. This would mean 949 million paid subscriptions globally by the end of 2020, suggesting an increase of 47 million compared with earlier forecasts. 

Maria Rua Aguete, executive director, media, service providers, and platforms of British consultant company Omdia, stated: ‘Broadcasters and streamers are preparing for a deluge in viewing as country-wide lockdowns across Europe and beyond come into force, leaving captive audiences at home. TV viewing has increased in Italy, Spain, France and Germany, as people spend more time at home due to the spread of the virus and as the implementation of measures to contain it begin to be felt. At the same time, differences in viewing preferences mean multiple devices and screens are being used simultaneously in-home to appease viewers’.

She also pointed out: ‘AVOD players such as Tubi (acquired by FOX on USD 440 millions) and ViacomCBS’s Pluto TV (launched in Latin America in March), which both have large content libraries, have experienced a rise in viewing but it’s not just about the audiences. Ad-supported streamers can also attract brands looking to increase their digital spends, offering services such as food delivery, for example’.

It is also true that brands have cut discretionary ad spend because of economic woes, especially where product supply is unable to fulfil demand. Tokyo Olympic Games has been cancelled, same as Euro 2020 and many other cultural and sport events that will impact on the TV ad revenue. ‘This will all affect the longer term ad-supported side of TV and its programming requirements’, completed Rua Aguete.

Europe
Broadcasters and streamers around the world, but especially in Europe, have announced several changes in their programming strategy. Reported by TBI, BBC’s director general, Tony Hall said the pubcaster ‘has a special role’ to play at this time of national need. This is, keeping the regular news on BBC One, along with weekly Coronavirus specials. Favorite shows will be available on both, the networks and its on demand service, iPlayer. Private competitor, ITV has kept live shows going, according to its CEO, Carolyn McCall. ‘We’ll do everything we can to continue to provide news, drama, entertainment and factual; we’ve launched Coronavirus Report on Monday night, but without audience’, she remarked.
 

Maxime Saada, chairman and CEO, Canal+, and BBC's director general, Tony Hall

French pay TV service Canal+ is to make its service free while the country is in total lockdown. ‘Premium channels will be available through a set-top box, while subscribers will gain access to all channels’, announced Maxime Saada, chairman and CEO. ‘And for our subscribers, we are opening up the access to all our channels, cinema, series, youth and documentaries’, he concluded.

Italy has one of the largest numbers of infected and killed by Covid-19. Head of International Distribution & Business Development at Italian RAI, David Bogi, emphasized that it is ‘impossible to make any sensible forecast regarding the resumption of the activity’ and he added that the interruption of production ‘exposes the economy of culture and, obviously, the entire supply chain linked to audiovisual productions’.
 
But he considered one positive element: ‘The remote writer's rooms are busy preparing future projects nonetheless the crisis. We are lucky that RAI can offer locally and internationally a considerable volume of hours of content and variety of genres available for distribution’. 
One of those titles is Belinale winner movie Hidden Away by Giorgio Diritti, which has already been sold to foreign distributors that are awaiting for the reopening of the cinemas. ‘Event projections will be published on the videolibrary on a weekly basis, which will allow customers to view the news of the line up remotely’, he concluded.

Claudia marra, sales manager, Mediaset Distribution, and David Bogi, head of international business, Rai

Private broadcaster Mediaset is taking special cares, as it is headquartered in the epicenter of the crisis, Milan. ‘Our business relations have been affected, with markets closed and no travelling, new ways of communication must be found. As a consequence of local productions being stopped, we are observing an increase in the demand for ready-made series, dramas, long-running series. Clients need programs now’, remarked Claudia Marra, sales manager at Mediaset Distribution.

Among the top shows, she highlighted The Silence of Water S2, coming soon on Canale5: ‘We already closed several deals in Europe (France) and around the world (Georgia, Latin America, Armenia) while we have many other deals in negotiation. We are also receiving much interest for our period drama Love and Sacrifice, a passionate and impossible love, set in the historical period time before the First World War. The series was sold in Albania, Romania, Montenegro, Croatia and Latin America’, she concluded.

In Spain, telcos as Movistar + have opened their TV offer to all subscribers, no matter what operator it is. Humor and fiction are the main bets of the original production, but until April 30 the focus is on children's content. ‘The Movistar + app within the Movistar + Lite offer can be downloaded by any citizen, and will have a one-month free trial. Since this week, we have increased the offer of content available. To channels #0, #Vamos, Movistar Series, Movistar Seriesmanía, FOX, TNT, Comedy Central and AMC, we have added Disney Jr., Disney XD, Disney Channel, Nick Jr., Nickelodeon, Cartoon Network, Panda and Baby TV’, announced the company.

Spanish national TV channels are more reserved. On the broadcasting side, although they believe that ready made will rise, they recognize a crisis with international series, due to the cancellation of dubbing. Spanish audience has never welcomed subtitling, but due to full stop of dubbing industry, channels are using subtitles for global series as The Walking Dead (FOX) or Outlander and Better Call Saul (Movistar+).  

José Antonio Salso head of sales and acquisitions, Atresmedia, and Silvia Cotino, Mediterraneo head of sales

On the international front, the cancelation of MIPTV generated a ‘significant loss’ for Atresmedia Televisión, since its Benidorm series had been selected for MIPDramas, where it has had a tremendous reception. According to José Antonio Salso, head of sales and acquisitions, the company continues its virtual meetings promoting the series and its catalog: ‘We are analyzing sales and promotion actions with good perspectives. The context of crisis and fear that exists in Spain and other parts of the world mean that the purchase responses are still pending and the feedback from open negotiations are suffering some delays’, the executive added.

Silvia Cotino Estornell, head of sales for Mediterráneo / Mediaset Spain is not sure yet if sales will increase: ‘What has surely not happened is cancellation of agreements, which is very good in this context. Yes, we are in contact with our clients and some of them have asked us for options in anticipation of the alteration of the program’.

National pubcaster in Portugal, RTP, announced an aid package to support the independent production sector. ‘Considering the big impact of coronavirus in the audiovisual industry, we reinforce our role by launching a package of initiatives with immediate impact to support the professionals of the sector’, informed the company in a recent statement.  RTP will maintain the jobs in different areas such us production, research, scriptwriters, journalists; it will anticipate the payment terms in cash for the productions already delivered or for short-term delivery; it will improve the payment conditions for the already approved projects on cinema, fiction and documentary; it will reinforce the investment in local content acquisitions; it will release a series of live concert shows available on RTP’s websites; it will announce a new call this month so independent producers can present their projects; and it will put special emphasis during all 2020 in programming national content at RTP’s networks and platforms. 

Turkey and CEE
As a key global player of the audiovisual industry, Covid-19 crisis is affecting strongly the Turkish content business, locally and internationally. First, the TV channels are suffering as productions have stopped and sets are shut down; second, the top distributors expect an improve in sales due to the higher request of ready-made content. 

Kerim Emrah Turna, executive director, Kanal D International, and Emre Gorentas, deputy director, ATV Distribution

This opinion is sustained by Kerim Emrah Turna, executive director, Kanal D International: ‘As of today Turkish broadcasters have an inventory of the episodes that they have not aired. However, most of the sets are shut down and the duration of this period is uncertain. Globally, we expect a bigger demand for the ready-mades from the linear broadcasters since the linear television has to feed the daily needs of the grid. This will be the short-term result. In medium term, everyone will face some financial effects that will be solved in the long term’.

‘The situation about the ad investment will be totally based on in general economy. However, I’m sure that we will an increase of the speed of digitalization in our lives and businesses’, he completed. 

Can Okan, CEO, Inter Medya

Can Okan, CEO, Inter Medya, remarked: ‘Coronavirus outbreak has tremendously affected the TV and content industry across the globe. Even though the distribution represents the core of our business, we started to invest in high quality productions as well and we have been working on the pre-production process for our newest production SAYGI (Respect) for the past few months, but we have also decided to postpone the start date for our set and we will reschedule everything for a more appropriate time to start’.

He concluded: ‘Although we see a rise in TV viewership due to the increasing number of people in quarantine, I believe that many countries will face important economic issues as well as a decline in TV ad revenues. In turn, this will cause a heightened interest in cheaper content. Though we do not see as a positive opportunity, we believe that our drama sales will continue as usual’.

Fredrik af Malmborg, Managing Partner, Eccho Rights, observed: ‘We represent contents from various countries that have stopped production. We expect none of our projects to be canceled at this point and hope for the sake of our trusted partners that the can soon resume their work. In short term we are making sure to touch base with everyone we cannot meet at markets and in medium and long term we are analyzing together with our clients what needs they have in their current situation and how we work together for the best possible outcome’.

‘The increase in consumption will certainly benefit a lot of players however the exact effects are hard to predict. There are lots of rumors about audiences that previously frequented more traditional and linear media maybe making the switch (especially since the shows and events they used to enjoy on linear are canceled or postponed) and it remains questionable if all of them return once things go back to normal. For international sales there are lots of opportunities to work with clients to find the right programming to replace what is canceled or missing at the moment’, he finalized.
 

Fredrik af Malmborg, managing partner, Eccho Rights, and Aysegul Tuzun, managing director, MISTCO

Aysegul Tuzun, managing director, MISTCO, who manages the content from pubcaster TRT and other third-party productions, added: ‘Our projects are suspended for two weeks but it is not possible to know how long this break will continue. Hopefully, we will back to our routine in a short time and without too many damages. The increase in content consumption in the platforms will benefit media in general, as long as digital platforms continue to invest on contents, but it is not lifesaver for all of us as content distributors. Traditional media is a huge part of our business but of course, we will need to observe all process carefully and then work on solutions and will try to adapt changes’.

Ates Ince, MD, Madd Entertainment, the international arm of Turkish prodcos Ay Yapim and Medyapim, is positive: ‘Distribution business is not effected badly today. As production stopped everywhere, the empty slots are started to be filled by Turkish dramas in some countries. As the markets cancelled we automatically saved budget. Since markets represent a big portion in our expenses’.

‘As economy and global demand for content increased in the last 3 years, all countries have used their financial tools for production. We have been producing a lot in that period, too. More than the international markets needs, that's why we can easily forecast that the amount of production will decrease in Turkey, as well. We will go back to our normal like year 2014-2015. And this will be positive for the global business of Turkish drama.  As the demand increase we will decrease the amount of excess hours of production and reach to an equilibrium’.

José Luis Gascue, EVP head of worldwide sales, Calinos Entertainment, and Ates Ince, managing director, MADD Entertainment

Emre Gorentas, deputy sales director, ATV Distribution, added: ‘We’re still producing non-scripted shows without allowing any audiences in the studio.  We’ll be on air with new episodes of series as long as our stocks last; otherwise we might have to stop broadcasting new episodes at some point. Content consumption increased significantly just like Free TV, but this consumption will affect international sales as well hourly basis. Although demand to content will be increased; ad revenues will be affected negatively, so this might affect license fees in a negative way’.

Pioneer company Calinos Entertainment is operating business as usual, working from their homes in Istanbul, London, Miami and LA: ‘For the short-term perspective we do know that most producers have put a halt on their projects, this will increment the demand for ready-made product. Also, the stay home orders issued by the authorities in most countries in Europe, Asia and Latin America will increment the viewership. The medium and long-term perspective is hard to visualize, and most things are going to change. We will be able to see a perspective in at least six weeks from now’, indicated Jose Luis Gascue, EVP Head of Worldwide Sales.

‘All content demand consumption in all platforms will increase, the ad investment will probably switch to the products that still are sold in different markets and that currently have high demand. The advertising industry always looks to meeting the needs of the consumers and has historically adapted to the situation. In the 70’s the ad market was almost owned by Tobacco companies, after the ban of tobacco advertisement in TV, the ad market adapted and moved on, the same will happen with this pandemic situation’.

As it was expected, TV viewing in Ukraine has grown during the quarantine: the coverage has not changed much, while the average viewing time has grown significantly. Due to the rise in the average viewing time, the TV viewing has grown among all key audiences – 4+, which is the broadest, and the commercial one of 18-54, 50+.

Tatiana Nikitina, Director of the analytics of TV channel "Ukriane" of Media Group Ukraine (MGU), underlined: ‘The TOP 6 channels have increased their general share by 4%. The leading among them are “Ukraine” (+14%) and ICTV (+8%). Kids’ channels grew by 8%, while music channels and Other TV experienced a fall. But the most popular among viewers during the quarantine has been the news: news channels grew by 29%, and newscasts on the TOP 6 channels have increased significantly’.
 

Tatiana Nikitina, Director of the analytics of TV channel "Ukriane" of Media Group Ukraine (MGU) and Victoria Yarmoshchuk, CEO FILM.UA

Victoria Yarmoshchuk, CEO FILM.UA, another leading Ukrainian media group, said: ‘Filming is suspended, releases are postponed, project teams switch to working remotely. Ukraine is in strict quarantine, and we had to stop the production of TV series and features. We have six Pay TV channels with multi-million audiences in Ukraine and the region. We are actively developing our YouTube channels as well. Today, when the cinemas are in suspended mode all over the world, our distribution and marketing have focused on attracting audiences to these promising channels for communication and content distribution’.

Yarmoshchuk considers is too early to draw conclusions, but one thing is absolutely clear: ‘Our field, creative business, will always be in demand among people. Now it is important to improve development processes and seize the moment to look closer at routine but vital aspects that have previously been neglected in our race for leadership. The new models will only become more efficient, and we are sure of that. We plan to create more new products and product types along with mastering new communication channels and content distribution platforms, engaging investors and partners in this process’.

APAC
Leading Japanese networks Nippon TV has not halted any production. ‘All our live shows and recorded shows are currently shot and recorded without any studio audiences. In addition, there seems to be some events such as sports tournaments being cancelled, but we have a vast variety of content lineup, and will continue programs accordingly’, said Yuki Akehi, Head of Marketing, International Business Development. 
 

Yuki Akehi, Head of Marketing, International Business Development, GMA Network (Philippines) Chairman and CEO, Felipe L. Gozon

‘We are very committed to providing our audiences with the best content. The People Using Television is higher now compared to the same time last year, due to the high occupancy at home. Nippon TV regularly airs live infotainment shows every weekday from 4am to 7pm, constantly updating our audience with the latest news surrounding the current situation. We have also created a special website dedicated to providing specific information on COVID-19’, added Akehi.

She concluded: ‘We will continue reach and gain interest in many of our international partners by creating unique opportunities to continue business virtually. This evolving situation has certainly pushed the industry to begin thinking of out of the box opportunities to try and sustain business through this very difficult time. Our subsidiary Hulu Japan is now available free of charge until March 31st, making available over 100 shows that include hit drama series such as Your Turn to Kill, Mr. Hiiragi’s Homeroom, The Pride of the Temp, as well as popular entertainment shows Matsuko in the room, Celebrity Confessions to ARIYOSHI, and many more’.

Doreen Neo, Chief Content Officer, Mediapro, and Vibha Chopra, Business Head - Global Syndication & International Film Distribution, Zee

Singapore's national media network, Mediacorp confirmed to Prensario that filming, production and artiste trainings ‘continue as per normal, even as the COVID-19 situation continues to evolve in Singapore’. Doreen Neo, Chief Content Officer, added: ‘We have escalated our precautionary measures in line with advisories issued by the Singapore government, including strict adherence to Stay-Home Notices and Quarantine Orders, and the implementation of split-team work arrangements, mandatory travel declarations and safe distancing measures for all cast and crew’.

On the contrary, due to the State-wide lockdown for the next 21 days India’s Zee has stopped all shoots in the timelines stipulated in the directive. ‘In times where social distancing is the need of the hour to curb the outbreak of Covid-19 and people are spending more time indoors, the idea is to provide audiences with the most engaging entertainment for the entire family. Everything is changing very rapidly, while the content consumption is likely to go up across various platforms – there is also an economic downturn that most countries are facing’, commented Vibha Chopra, Business Head - Global Syndication & International Film Distribution.

GMA Network (Philippines) Chairman and CEO, Felipe L. Gozon, said the company is operating on a ‘skeletal work force’ and has temporarily suspended the production of all network-produced entertainment programs, while it continues to deliver news and information programs. ‘To help ensure the well being of our employees (both regular and project-based) and talents, we have earmarked P350 million (some USD 6.85 million) worth of financial aid for them’.

‘While broadcasters are hoping that the increase in TV viewership will translate to increase in ad sales, industry monitors are reporting otherwise. In the Philippines, the private sector plays an important role in combating the social and economic effects of the virus. A number of major advertisers have decided to “go off-air” to re-channel their advertising budget to relief efforts. More than the ad investment, however, increased content consumption also means increased media options for the consumer. It now becomes a race as to who is the most credible, who is the most creative, and who is the most innovative in delivering compelling content’, concluded Gozon. 

Educational
Due to the increase of COVID-19 infections, schools have closed in Japan, USA, UK, and also in Latin America. Japan’s NHK Educational has created new subchannels and websites to provide a range of kids programs for school. Company has redesigned its services so that they can be used by as many people as possible on an anytime-and-anywhere basis. These services include the domestic VOD NHK Plus, which began trial operation on March and will go into full operation on April 1. 
‘We offer educational content in the mornings and programs that help kids stay healthy by encouraging them to dance, sing, and do physical exercise in the afternoons. Our satellite TV channels are focusing their programming on science and history content that's educationally beneficial for students at junior high schools and high schools and on content that children and their parents can enjoy together’, explained to Prensario.

The Ministry of Education in Argentina, Educar S.A. and Contenidos Públicos S.E. have created the portal Seguimos Educando, which includes the production and broadcast of programming of the networks that depends of the Ministry, Canal Encuentro, Paka Paka, DeporTV, Radio Nacional and OTT Cont.Ar. On the other hand, production and distribution of printed material was also ensured for educational communities without internet access, prioritizing those in situations of isolation, rurality and contexts of high social vulnerability.

An article from Kidscreen informed that PBS KIDS (USA) is offering a variety of free resources to support families, including its PBS KIDS 24/7 channel, video app and games app as per usual. A daily PBS KIDS newsletter is available, starting this week, for parents that offers content, activities and tip to keep kids learning and entertained if they’re home from school. It also has the PBS LearningMedia free resource for preschoolers up to grade 12 to support distance learning.

As for the BBC, it is set to launch a new iPlayer experience for kids with more educational content, and is adding more newsround content to CBBC, as well as expanding its BBC Bitesize content. The changes these pubcasters are making are similar to ones made by Italian pubcaster RAI last week, which released new kids content across its channels in the coming weeks and launched a new family-friendly block on its RAI 2 channel.

Future
This global crisis occurs at a time when the industry is evolving in “direct-to-consumer” offerings: two services were launched last November, Apple TV+ and Disney+, but there are two to come in the coming months: NBCUniversal's Peacock in April, and WarnerMedia's HBO Max in May, completing the majors map.

The Disney+ mobile app is off to a roaring start in Europe since March 24 and in a couple of days earned +5 millions subscribers, according to analytics firm App Annie. The OTT is available in Austria, Germany, Ireland, Italy, Spain, Switzerland and the UK, while it will be available in France since April 7. 

Cinema is one of the biggest losers. The US box office posted its worst weekend in 20 years on March 14-15, according to Comscore. There AMC Theaters, among other chains, have announced indefinite closings, as has Cineworld in the UK and Ireland. In this context, Hollywood studios launch alternatives. In a bold and pioneering move, and in the face of movie theater collapse, Universal Pictures announced on March 16 that its films will be available in the home the same day as its global releases, beginning with DreamWorks Animation's Trolls World Tour, which will be released on April 10 in the USA. It will also make available the Elisabeth Moss horror film The Invisible Man, the satirical thriller The Hunt, and the period comedy-drama Focus Features’s Emma.