Has Animation Distributor’s Business Model changed? What causes the change?
(A question posted on our Facebook group)
As the TV Licensing fee continue to drop, producers have difficulties raising money to create new content for TV. As a result, this affects the business of some distributors. Sometime back, I heard some executives lost their jobs as distribution companies start to cut back on their overhead.
Producers are also getting more and more savvy these days. With their government support, many are going to markets on their own now to build relations with the broadcasters. They no longer depends solely on distributor’s assistance for distribution. In Asia, I do know a few production companies that has the ability to self distribute their own content. This is another reason how it affects the distributor’s business.
Though producers have the ability to speak directly to broadcasters, this does not completely change the whole distribution model. Some broadcasters buy content in bulk for their channels. And they prefer to talk to distributors who has a huge catalogue than dealing with producers one by one.
Now that OTT (Over the top like Hulu, Netflix) is slowly catching up, many producers still depend on distributors to reach out to them. Example: Base on our own experience, it is not easy to reach out to Netflix on your own. They will never talk to you if you are a new producer with no track record. A few years ago, I manage to seal the deal and build a relationship with Hulu when it first came out. I was told by some Korean producers that it is no longer as easy as before. I heard YouTube talks to content aggregators. Content aggregators practically serve like distributors to get bulk content for online platforms. They will never talk to individual producer unless you have the relations with them or you are a reputable one.
All in all, things are always changing in the market. Some distributors I know have started to produce their own series and self distribute it. Once the series get popular, they will start to make money from licensing / merchandising. With this change, they no longer depends solely on distribution fee of others content.