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The Most Important Thing To Remember At Cannes

4/27/2014

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My firm is all about helping companies build and realize their highest value; whether it is in film, television, music, video games, publishing or online.  As you get ready to go to Cannes I want you to think about what makes your company valuable and consider what you can do to enhance that value as you do your work of buying and selling films.

The single, most important thing that you should think about as you prepare for Cannes is...

What is our brand? 

Many companies go from show to show, building their catalog and selling territories without really giving much thought to their overall company image or “brand”.  But your company needs a brand; it needs to be known for something more than just an eclectic collection of films.  That in fact is what a lot of the foreign sales companies have become:  A mixed assortment of movies and documentaries.  You cannot discern much of a plan or corporate image from their list of titles, accumulated over the years.  Most were picked up because they were priced right and expedient, and the acquisition team knew that they could sell them to a certain number of buyers.  Not much thought was given to how this or that title fits into the overall company “brand” or how a title will enhance the value of the corporation as a whole.  It often gets down to price, terms and sell-ability.  Deal done. 

But that is not the end of the deal.  That title will become part of your company’s long term identity.  You know the phrase “you are what you eat,” well… you are what you sell. 

Building your corporate brand is crucial to the long term successful growth and financial health of your company.  What are you known for?  Why do buyers want the films that you take to market?  When you want to recruit top talent to your team, why do they want to work for your company? 

I started my career at the Walt Disney Company.   Arguably, the most brand conscious corporation in the entertainment industry.  We were always fastidious about building, enhancing and protecting our brand.

You need to do the same. 

Buying and selling films is just as much about personal relationships as it is about marketing entertainment properties.   Often films are picked up from this producer or that one because you sold their last film and may want their next one.  But how does that help your company?  Ten years from now will you look back and be really glad that you acquired and sold that film, or will it just be another brick in the wall?    

Build your brand.  They are not bricks.  Acquire only films that will enhance the overall value of your company and give you a catalog of titles that others would admire and wish they had acquired. 

It does not matter if you have the best collection of creature features, Anime, romantic comedies, rock docs, international spy thrillers… or kid vid.  Be known for something.

A lot of people talk about branding, but few companies in our business are really serious about it.  As you get ready to embark for France, think about your long term objectives and what you want your company to be known for, and do not compromise on that vision.


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People Prefer Watching Live TV but Steaming is Gaining Fast

4/17/2014

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Poll underscores the fact that unlike in U.S., most global viewers prefer live television.
Almost 90% of viewers prefer watching live television, although other modes of consumption, including streaming or downloading from a computer (27%), streaming from the Internet to TV (16%), using a DVR or other recording device (16%), and via mobile device (11%), are gaining in popularity, according to new data from research firm Ipsos.

The survey of 15,551 adults in 20 countries (including the United States) conducted Feb. 4 and Feb. 18, 2013, found that traditional ‘live’ TV watching is more popular (91%) among older respondents ages 50-64, compared with those younger/middle age 35-49 (88%) and under 35 (81%).

Indeed, watching TV programming on computer and laptop is most popular (35%) among respondents under 35 — a percentage that diminishes as viewers’ ages 35-49 (25%) and 50-64 (17%) increase.

Streaming TV content from the Internet was preferred by 20% of respondents under 35; 16% among respondents 35-49; and 11% among the 50-64 demo. The percentages fall even further watching TV on mobile devices. About 15% of respondents under 35 watch TV on a portable device; 10% among the 35-49 demo; and 5% among those 50-64.

Using a DVR or other recording device is most popular with those 50-64 (18%) compared with 35-64 (16%) and under 35 (15%).

Countries whose residents are most likely to choose watching live TV programming include France (93%), Spain (93%), Germany (92%), Turkey (90%), Argentina (89%), Sweden (89%) and Australia (89%).

Those rounding out the middle of the pack are from Brazil (89%), Italy (89%), South Korea (87%), Great Britain (83%), Mexico (82%), Poland (82%) and India (82%).

Those least likely to watch TV programming live are from Japan (82%), Russia (81%), South Africa (81%), U.S. (81%), China (80%) and Canada (77%).

The results seem to support a recent Rentrak Corp. study that found that nearly 67% of primetime network viewing occurs three days after a show’s initial broadcast.

Watching TV on computer or laptop was chosen most often by respondents from China (52%), Russia (43%), Turkey (42%), India (40%), Sweden (35%), South Korea (31%) and Great Britain (29%).

Less inclined are respondents from Poland (27%), South Africa (26%), Canada (26%), Germany (24%), Mexico (24%), Spain (23%) and Brazil (21%).

Respondents from Argentina (20%), the U.S. (20%), Australia (19%), Italy (17%), Japan (14%) and France (12%) is least likely to watch TV on a computer or laptop.

Streaming from the Internet to TV is most popular among respondents in Turkey (44%), Russia (36%), China (33%), South Korea (25%), India (23%), Sweden (19%) and Great Britain (17%).

Those in the middle of the pack are from Canada (17%), the U.S. (17%), Brazil (15%), Mexico (13%), Spain (12%), Italy (11%) and Australia (10%).

Respondents from South Africa (9%), Argentina (9%), Poland (7%), Germany (5%), France (5%), and Japan (3%) are least likely to choose streaming from Internet to TV.

Respondents most likely to use a DVR or other recording device hail from Japan (45%), the U.S. (40%), Canada (32%), Great Britain (31%), South Africa (27%) and Australia (25%).

Those in the middle of the pack are from Poland (18%), India (16%), Germany (11%), France (11%), China (10%), Mexico (9%) and Sweden (8%).

Respondents from Turkey (7%), Brazil (7%), Spain (7%), Italy (7%), Argentina (6%), South Korea (5%) and Russia (4%) are least likely to use a DVR or other recording devices.

Finally, watching TV programming on mobile device is most popular in South Korea (26%), China (25%), India (21%), Turkey (20%), Mexico (13%), Great Britain (12%) and Sweden (12%). And less so in the U.S. (10%), Australia (9%), Spain (9%), Brazil (8%), Canada (7%), South Africa (7%) and Italy (7%).

Least likely to watch TV on mobile device were respondents from Argentina (7%), Japan (6%), Poland (5%), Russia (5%), Germany (4%) and France (4%).


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Valuing A Single Film or Film Library

4/14/2014

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If you want to buy or sell all the rights to a film, you do not have to call an appraisal company to arrive at a fairly accurate value of the property.

My firm has been valuing film and television (intellectual) properties for more than 25 years and we have also studied the valuation techniques of many other firms as well, and for the most part, it comes down to “apples to apples”.

Step One
Break down the film, or films, by director, star(s), genre, original box office (or DVD) revenue and foreign/domestic exposure. 

Step Two
Contact other producers or distributors with similar genre films (with the same director/stars if possible) in their library.  These are called “comps”.  Find out how those films have performed over their lifetime.   You might be surprised how forthcoming most rights holders are with this information, they have nothing to hide and often gain valuable information about their own films in the bargain.

Step Three
Our firm gives each film in a library a rating (1 Worst – 4 Best) depending on the film’s past financial performance, the presence of known “movie stars”, the age of the film, and the film’s director, producer and debut reviews.   We total the points for each of these factors and create an average (Example: 2.3).  

Researching the past sale price of similar films is a bit tricky, but there is a lot of published and unpublished information about past film sales available on the internet.  Again, it is wise to turn to your friendly competitors and other rights holders.  You will probably find, as we do, that you can develop a consensus of thought about any particular film based on its genre, star and director.  So, if the consensus, general market value of films of a similar nature is $10,000, then you apply your multiple (for example purposes only: 2.3). 
Gross Value $23,000.

Step Four
Applying a discount.  You may need to discount the film’s value based on many possible factors; among them are the number of territories sold/unsold (and currently still under contract), the availability of clear chain-of-title information, and the quality of the original print.  If the print has not been digitized and is not in high definition (standard def), then that becomes a factor too.  We add up the discounts and apply them.  It usually comes in at .50 to .80.  This is your discount rate.  For example purposes only, let’s assume that we have created a discount of .67.  We multiply our film’s gross value of $23,000 times .67 to arrive at a Fair Market Value of $15,410.

That is a very accurate assessment of the value of this property.    

You may be wondering why we first create a rating point system and apply it to an average industry consensus of similar films, and then discount that gross value to arrive at a Fair Market Value.  We do this to make sure that we are treating each film fairly and accurately.  Just because a similar Kevin Sorbo or Mark Harmon picture sold for $22,500 in 2006, that does not mean that's what your film is worth;  you will need to rate all of the elements of the film and apply any discounts to be accurate.  

The days when DVD was king are over, and films today are very much valued on their digital distribution rights value.  If those rights, or elements, are not available, then the value can fall to the floor. 

We understand that this is not a cookie cutter valuation method, but it forces you to look at all the positive and negative aspects of a film and apply a numerical value to them.   I promise you that if you use this process you will feel that you have a handle on the true market value of the property. 

If you need any help with this process, or would like us to do it for your company, please do not hesitate to contact us. 


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    Author

    Stephen Kerr is president of BMC (Business Marketing Consultants), a subsidiary of Bel Age Medias. 

    He has 30 years experience in the media and entertainment industry. 

    ​See more on his LinkedIn profile.

    View my profile on LinkedIn

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