Feasibility Study of a Digital Platform for the delivery of UK ... - BFI

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would have fallen into the UK independent and specialised film category (equivalent to 27 per cent). Predominantly all had either had a
theatrical release, or had a star attached.
The pay-TV and free-TV scenario is somewhat different. These deals are far more important than on-demand deals to independent and
specialised content owners in terms of their monetary value. For some of the larger independent distributors, 80 per cent (and sometimes
more) of libraries have been exploited in either the pay-TV window or for free TV. In terms of the traditional free TV windows, with the
advent of digital multichannel television, there are now more buyers than ever before. As a sign of the times, channels such as BBC4 and
More4, are using independent and specialised movies as part of their more ‘adult-orientated’ remit. More4 notably used a series of high
profile independent titles in late 2005 to drive its launch campaign --- including ‘Touching the Void’, ‘Super Size Me’, ‘Spellbound’,
‘Downfall’ and ‘Gosford Park’.
TV channels that do not benefit from the backing of a major UK broadcaster tend to benefit from sub-licensing deals struck by the
primary buyers of a title in the free TV window (such as the BBC). The resulting revenue is then split between the broadcaster and the
distributor. As an example of this, Pathe’s ‘Chicken Run’ and ‘Two Brothers’ --- two animal related movies --- were recently sub-licensed
to the Discovery Channel’s Animal Planet.
Importantly, many of the pay-TV and broadcast deals signed by independent distributors have an unwritten exclusivity that effectively
constrains or completely rules out prior PPV and/or VoD exploitation. The net effect is that if some content owners --- even those with a
certain degree of clout in negotiations --- choose to exploit their content elsewhere in the prior on-demand window, then the value of
their broadcast deal will be directly compromised (although it may not be a ‘deal-breaker’ as such). From what Screen Digest
understands, this is the case in Sky’s pay-TV deals with a number of independent distributors, as well as a strategy adopted by both BBC
and Channel 4. This is not an area that can be easily regulated as the restrictions imposed generally take the form of an unwritten
‘general understanding’ and not something that is directly written into supply contracts. The BBC’s situation is more clearly an issue given
its role also as a financier and its ability therefore to tie up TV rights in advance for very little outlay --- which it chooses to do --- a
scenario that puts independent producers between a rock and a hard place when trying to get their film made and fully exploit their
content at the same time.
In Sky’s case, the position goes a step further, following the recent announcement of the satellite operator’s plans to move ahead into the
in the on-demand sphere (see below). As a result, Sky is now focussing a great deal of attention on not only clarifying its on-demand
rights position in the PPV (a la carte VoD) and the pay-TV window (subscription VoD), but also aggressively acquiring Internet rights.
According to a number of distributors however, there is now more interest from both Sky in independent titles than ever before --- as the
operator seeks to build a library for its VoD platform. It also appears the case that some terrestrial broadcasters may be following a
similar pattern of behaviour --- though not as aggressively --- in trying to acquire Internet rights within their Free TV window.
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