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  • "Mad Men" Creator Matthew Weiner Explains How SVOD’s International Distribution Changes TV’s Economics

    “Mad Men” creator Matthew Weiner explained how Netflix’s and Amazon’s international distribution capabilities are changing the TV industry’s economics as well as mitigating domestic viewership fragmentation, in an interview he did with Videology’s Chairman and CEO Scott Ferber at the company’s “Full Frontal 2017” event on March 8th.

    It’s no secret that both Netflix and Amazon are aggressively promoting their SVOD services in approximately 200 different countries around the world. But Weiner explained how having their own international distribution footprint distinguishes them from other networks, enabling them to pursue projects with the intention of globally distributing the programs without the necessity of having partners.

    This contrasts with the traditional TV model, where the studio would retain the international rights and then have to sell the show with partners into multiple markets. Weiner explained that the enhanced control that Netflix, for example, now has, enables it to negotiate differently, choosing to cover the production costs plus a 25% margin to the writers, in exchange for global rights.

    Weiner said that an intriguing byproduct of this arrangement is that it enables international markets to play a role in offsetting the viewership fragmentation occurring domestically, with the proliferation of original programs. To be sure, Weiner said that domestic success is still a very important contributor to building an international following. But he noted that a TV show can now have a much smaller domestic audience than in the past and still be a big overall success because of the growing contribution of international viewership.

    This dynamic underscores not only why Netflix and Amazon have been racing toward global expansion as their originals budgets have soared, but also how the two SVOD providers are differentiating themselves from other studios and networks. The latter have much more heterogeneous international strategies, working with various pay-TV operators and local broadcasters to distribute their shows. Weiner noted that HBO actually distributed “Mad Men” internationally for AMC, the network it was carried on domestically.

    More broadly, Weiner observed that the explosion of providers and platforms has led to the upside of “more writers working for less money on more shows.” Overall he was very bullish on the role technology is having in providing new viewing experiences, especially binge-viewing.

    Weiner said that whereas outsiders in Hollywood have often been viewed as “dumb money,” technology-driven companies like Netflix, Amazon, Facebook and Google are well-respected because of their sophistication and the new distribution paradigms they enable. He was particularly optimistic about Netflix, which he sees as a “bottomless pit of success,” deftly using its user interface to carefully present programming choices, and about Amazon, which he sees as already having success with its movies that add to its multiple customer touch points.

    As far as advertising, Weiner was also optimistic, saying that the “audience’s tolerance for ads is the highest in my lifetime” as well as highlighting his own four kids’ practice of not skipping ads in YouTube and elsewhere even when they’re able to. That said, he also cautioned that viewers’ patience should not be tested. He recounted a recent personal experience of watching “Feud: Bette and Joan” via his pay-TV operator’s VOD service and having too many non-skippable ads inserted, which diminished his experience.

    Weiner also discussed “The Romanoffs,” his upcoming big budget series for Amazon, which will be an episodic anthology (new characters and plots every episode). He explained the format choice was inspired by the success of Netflix’s anthology “Black Mirror” and his desire to differentiate it from other dramas where binge-viewing previous episodes is required in order to catch up.

    Weiner shares lots of other thoughts about where advertising fits in and how it can continue to succeed, among other topics. He wraps up by encouraging risk-taking, noting that he’s seen that rewarded again and again in his career.

     

     
     
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