“Disney has decimated their distribution business in terms of programming they sell,” said Jack Davison, EVP at 3Vision – a content consultancy company. At Connected TV World Summit last month, Davison reviewed data collected from the company’s ShowTracker service, which points to a massive shift in the studio’s distribution strategy towards selling to its own services. In 2022, across ten markets (Australia, Canada, France, Germany, Italy, India, Mexico, Spain, Sweden, UK) 100% of Disney’s scripted TV series premiers were distributed to its own services. The largest leap in the direction of sell-to-self came between 2020, where the studio only sold 31% to its own services, to 2021 where that figure jumped to 89%.
By market, in 2021, Disney sold 100% of its scripted TV premiers to itself in Italy, India, Spain and Sweden, while in the UK and France, the studio sold 96% and 88% respectively. The market in which it distributed content to third party services at the highest rate was in Canada, where the studio only sold 60% to itself.
The shift in distribution strategy is partly explained by the company’s ambitions in the streaming wars. Davison said: “To get Disney+ off the ground, they pretty much pushed everything into it.” He also believes that it is the only major player that was “big enough or had broad enough shoulders” to integrate content and production pipelines to the degree it did.
Lionsgate has also shifted towards a sell-to-self strategy, distributing content to its streaming service, Starz. 3Vision data shows that n 2022, across ten markets, 83% of the company’s U.S. commissioned scripted TV series premiers were on services it owned, up from just about 70% in the previous two years and 37% in 2018. In France, Germany, Italy, Spain and Mexico, 100% of its U.S. commissioned TV series premiers went to services it owned.
Other studios have been less committed to sell-to-self, the 3Vision research shows that this year for Warner Bros. Discovery, across ten markets, 45% of its scripted TV premiers went to its own services. The proportion was the same for the previous year, and only slightly above the 38% figure for 2020. Davison notes that the rollout of the company’s streaming service – HBO Max – and the distribution of it content onto that service, has been stymied by “the fact they have a lot of pre-existing deals in the market.”
He elaborates: “In the UK, content is going to keep flowing to Sky until 2025, and in Italy and Germany which are Sky markets too. In the Middle East there is OSN.” According to 3Vision data, 27% of Warner scripted TV Shows in 2020/2021 were distributed to third parties as part of a volume deal.
In 2022 in ten markets, 40% of Paramount’s scripted TV series premiers were on its own services (although this figure is expected to jump to 48% upon the roll out of Paramount+ in the UK this June). In 2021, this figure was 47% – a significant rise from the previous two years when it sat at 21%.
Despite Paramount’s increase in sell-to-self, Davison predicts a return to a “more pragmatic” approach soon. He said: “Paramount has been a little more transparent from quite early on about what they were doing with content, talking about how they are looking to window content, doing co-exclusivity, still doing other deals with shorter windows.”
For its UK launch, Davison believes that Paramount could decide to pursue different distribution strategies for its Showtime and Paramount+ originals content, and its CBS content, selling much of its procedural programming (such as CSI Vegas, FBI International etc.) on the free TV market on the basis that it may not suit its streaming proposition.
The aggregated figures for studio scripted TV series premiering on owned serviced over ten markets reveal a very significant degree of vertical integration of pipelines. Between 2018 to 2022, the figure almost tripled from 23% to 60% respectively. By market, the most sell-to-self activity is happening in India, Mexico and Brazil (81%, 79% and 71% respectively) with lower rates in France (35%) and South Korea (33%).
Despite the widescale adoption of the sell-to-self approach, Davison believes that the increased pressure on streaming services for profitability – particularly in the wake of Netflix experiencing its first global negative quarter after 46 quarters of consecutive growth – may encourage studios to sell more to third parties and explore new windowing paradigms.