Licences for Europe Cross-border working group – 1 March 2013

Agenda What we do Opportunities and obstacles Digital distribution schemes Examples Thoughts and suggestions  What are you doing to improve cross-border access to content and content portability?  What are the main problems or obstacles you are facing?  What contractual or technological solutions could improve the situation?

3 What we do Opportunities and obstacles Digital distribution schemes Examples Thoughts and suggestions Under The Milky Way: a global VoD aggregator Under the Milky Way services Worldwide Digital Distribution Concretely…

Rights holder Theatrical distributor Video editor Sale agent Producer VoD AggregatorGlobal VoD Platform Under The Milky Way: a global VoD aggregator What we do Founded in June 2010, Under The Milky Way (UMW) is a service company dedicated to the digital distribution and marketing of feature films. Mission Statement: To ensure that films are delivered and exploited as effectively as possible on the most prominent VoD platforms in the world. Opportunities and obstacles Digital distribution schemes Examples Thoughts and suggestions

LEGAL We ensure industry-standard terms through pre-negotiated deals with VoD platforms, We offer non-exclusive mandates, tailored to each platform and film, TECHNICAL We coordinate the digital supply chain with approved encoding houses, EDITORIAL We maintain on-the-ground relationships with the platforms’ local programmers, MARKETING & COMMERCIAL We create adapted commercial and marketing campaigns in coordination with the platforms, We ensure proper placement on the store, FINANCIAL We provide transparent reporting with a fully detailed breakdown. 5 What we do Opportunities and obstacles Digital distribution schemes Examples Thoughts and suggestions Under the Milky Way services

UMW has developed an international network of 10 local representatives covering 24 countries: What we do Opportunities and obstacles Digital distribution schemes Examples Thoughts and suggestions Worldwide Digital Distribution

Worldwide deals with the most important global VoD platforms  “Preferred Aggregator” status on iTunes / More than 1100 films exploited in over 60 countries, Deals with more than 250 rights holders worldwide, including producers, theatrical / video distributors and international sales agents. What we do Opportunities and obstacles Digital distribution schemes Examples Thoughts and suggestions Concretely…

No physical barriers and financial obstacles for cross border distribution, Flexible technological solutions:  Geoblocking,  Mezzanine compatible files,  Multilingual packages… Room for niche content (long tail), Pan-European VoD platforms:  Centralized digital supply chain process,  Economies of scale. What we do Opportunities and obstacles Digital distribution schemes Examples Thoughts and suggestions Opportunities

Large volume of movies and transactions: absolute need for efficient processes, Complexity of the information:  rights holder, film, platform, country, language, media, currency, shared packages… Small margins, Lack of local subtitles, Multi territorial rights access: VoD rights are fragmented across companies / territories. What we do Opportunities and obstacles Digital distribution schemes Examples Thoughts and suggestions Obstacles

10 1.Local rights / Local exploitation 2.Aggregated rights / Multi territorial exploitation 3.Multi territorial rights / Multi territorial exploitation What we do Opportunities and obstacles Digital distribution schemes Examples Thoughts and suggestions

Local rights holder (Theatrical distributor or DVD editor), Rights limited to one country or group of countries, No immediate economies of scale.  Traditional model What we do Opportunities and obstacles Digital distribution schemes Examples Thoughts and suggestions 1. Local rights / Local exploitation

Local rights holders exploit the same film through the same aggregator, Asset sharing / cost sharing (according to the material),  Interesting but high level of organization required What we do Opportunities and obstacles Digital distribution schemes Examples Thoughts and suggestions 2. Aggregated rights / Multi territorial exploitation

Direct deal with the producer or sales agent, One rights holder, one package, Wide coverage and strong economies of scale, Opportunities to run transversal marketing campaigns (ex TIDE), Only limitation: the availability of linguistic versions.  An emerging scheme but stakeholders still prefer the all rights / per territory sales What we do Opportunities and obstacles Digital distribution schemes Examples Thoughts and suggestions 3. Multi territorial rights / Multi territorial exploitation Sales agent / Producer Sales agent / Producer

14 Tintin: simultaneous digital releases in Europe Peter & the Wolf: Worldwide release Tide: Day and Date release experiment What we do Opportunities and obstacles Digital distribution schemes Examples Thoughts and suggestions

What we do Opportunities and obstacles Digital distribution schemes Examples Thoughts and suggestions Tintin: simultaneous digital releases in Europe Simultaneous digital release of 4 animated features films in:  8 countries in Europe: France, UK, Switzerland, Belgium Ireland, Austria, Netherlands, Luxembourg  5 languages : French, English, German, Dutch, Spanish  Now in 42 countries in the world Key points: 1 rights holder, Existing dubbed versions available, An European brand! A one stop shop organization.

What we do Opportunities and obstacles Digital distribution schemes Examples Thoughts and suggestions Peter & the Wolf: Worldwide release  Animated short film (32’),  No dialogues,  Costs of the operation: 650€,  One rights holder for a worldwide deal, but some territories are exploited on behalf of another rights holder. Simultaneous digital release in:  21 countries in Europe,  51 countries in total.

What we do Opportunities and obstacles Digital distribution schemes Examples Thoughts and suggestions Tide: Day and Date release experiment

What we do Opportunities and obstacles Digital distribution schemes Examples Thoughts and suggestions Tide: Day and Date release experiment The coordinator The sales agents The release team Reporting and presentation

What we do Opportunities and obstacles Digital distribution schemes Examples Thoughts and suggestions Tide: Day and Date release experiment The distributors

SALES AGENT VOD AGGREGATOR (UMW) Local VOD exploitation Theatrical Exploitation LOCAL DISTRIBUTOR What we do Opportunities and obstacles Digital distribution schemes Examples Thoughts and suggestions Tide: Day and Date release experiment Global VOD Platform Exploitation No MG Rights for local VOD and cinemas for 2 years 60% - 75% Theater Revenues 75% Local VOD revenues 75% Global VOD revenues Rights for global VOD for 2 years

21 What we do Opportunities and obstacles Digital distribution schemes Examples Thoughts and suggestions Alternative fragmentation of the rights matrix Alternative Value Chains for Digital Distribution

What we do Opportunities and obstacles Digital distribution schemes Examples Thoughts and suggestions Current standards for linguistic rights are not adapted for digital distribution (local communities, multilingual packages), The pan-European platforms need easy access to the fragmented rights to concentrate on their core competencies (and we need pan-European platforms to develop a single market), Producers deserve transparency, commercial circulation of their movies, however, the rights are often sold for a long period (5-15 years), Sales agents have mixed feelings about trying new distribution models, some are willing to experiment on a limited number of “unsold” films, Few integrated groups could manage pan-European digital distribution, Transversal / per media mandates?

France TheatricalVideoPay TVFree TVLocal VoD Italy TheatricalVideoPay TVFree TVLocal VoD Spain TheatricalVideoPay TVFree TVLocal VoD Germany TheatricalVideoPay TVFree TVLocal VoD … TheatricalVideoPay TVFree TVLocal VoD Global VoD What we do Opportunities and obstacles Digital distribution schemes Examples Thoughts and suggestions Alternative fragmentation of the rights matrix The all rights sales / MG / on a per territory basis scheme is not adapted to most of the European films,

What we do Opportunities and obstacles Digital distribution schemes Examples Alternative Value Chains for Digital Distribution Thoughts and suggestions

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