How can premium content cut through a media space so fractured and noisy? FremantleMedia’s CEO, Cécile Frot-Coutaz, joined us to address this question in a session moderated by commentator Kate Bulkley.
FremantleMedia enjoys a group turnover of €1.6bn, and produces 9000 hours of programming per year. Frot-Coutaz became CEO in the summer of 2012; prior, she’d been CEO of FremantleMedia North America. Under her tenure, she executive produced American Idol, America’s Got Talent and X-Factor USA.
One of the main themes of the discussion was FremantleMedia’s focus on multi-channel networks (MCNs). Last month it announced a strategic partnership with European MCN Divimove, which provides content monetisation tools for over 950 YouTube channel content creators (generating over 150 million views monthly).
“We’re very bullish on digital,” said Frot-Coutaz. “Our view of it is that you cannot ignore the views, creativity or economics“, either in the short- or long-term.
“The time (young people) spend watching TV has gone from 4 hours to 2 hours,” a figure that FremantleMedia considers significant. “As a company we want to make a play quickly and quite aggressively.”
Regarding their focus on sealing MCN partnerships, she added, “Our view is to get scale in distribution. That’s what these investments do for us.”
Once a distribution backbone is established, the next step is targeting verticals of interest. “We’ll be choosing verticals that our MCN partners (are involved with) but also verticals that fit our core competencies,” Frot-Coutaz explained.
Pressed by Bulkley for what verticals they’re looking at, Frot-Coutaz pointed to food, fashion and automotives, but that’s hardly where the list ends.
“That’s why scale is important.” This was a point she would make repeatedly. “If you’re going to do something like fly fishing, you have to do it on a global scale, otherwise it’s not monetisable.”
She added that FremantleMedia’s priority is in producing premium content for the verticals they ultimately select to focus on.
“It’s going to be about scale, global and premium content. That’s the business that we’re in.”
Bulkley then asked whether the approach FremantleMedia wishes to take is monetisable, and Frot-Coutaz said that they are already making money — not much, she clarified, but it’s a start.
“If you look at what’s happening in the music business, I think there’ll be several business models: subscription, advertising and a mix. I don’t think there’ll be one single business model in this world.”
On whether FremantleMedia will redistribute resources from its legacy operations, Frot-Coutaz was clear: “Our old business isn’t going anywhere. However, there’s this new world of born digital content… it’s a producer’s dream. For everybody who’s been a producer, it’s freedom, right?”
As for streaming services like Netflix? “They’re another platform,” she said. “Obviously we sell to them, we partner with them, we buy their product” — they currently have a strategic partnership with Hulu — “we’d love to be in the production business for these platforms.”
That she mention this is timely, given that Netflix has begun making waves with its own content: House of Cards and Orange is the New Black, both distributed exclusively by Netflix, were big references this week.
“The great thing about a platform like Netflix is it changes the game: it’s not about being everybody’s favourite programme, it’s about being somebody’s favourite programme,” Frot-Coutaz said.
“This new world enables different kinds of programming to be able to exist. 15 years ago, you could only survive if you made shows that appealed to everybody. Creatively this is really exciting.”
Naturally, this may lead to concerns about rights-holding with existing partners. Frot-Coutaz acknowledged the worry: “The fight for rights is as fierce as it’s ever been, everybody’s trying to hang on to their rights as they always have.” But now, she points out, content is funded differently. This is where she believes the opportunities are: securing access to different platforms.
“That’s why, for us, it’s a diversification play. That’s why it’s so important that we position ourselves there.”
But, Bulkley wondered, what long-term advantages can companies like FremantleMedia possibly imagine by partnering with online entities? Is it really a sustainable decision?
Frot-Coutaz pointed to the Susan Boyle phenomenon, some years ago, when she captivated the world with her unexpectedly strong performance on Britain’s Got Talent.
“YouTube made Susan Boyle,” she said. “And the franchise Got Talent got a huge kick that year because of her. ITV got greater ratings: it was the highest-rated of all the seasons because YouTube promoted SuBo. Who won that? ITV won that: YouTube didn’t make any money, ITV did!”
Despite that, Frot-Coutaz emphasises that “at some point, this is going to happen. It’s not going to go away. So it’s about how you use these platforms. How do you make the most of it as a way to have a conversation, to have multiple touchpoints with your audience?”
People have less time, she said. We need to take advantage of these new touchpoints to ensure they’re engaged when they’re not in front of the TV.
Bulkley also asked her about her recent decision to restructure the business and eliminate some senior staff.
“I don’t like big centres. I don’t like overhead,” Frot-Coutaz laughed. More seriously, she explained that before her restructuring FremantleMedia organised its production and enterprise businesses on separate sides.
“That was good,” she stressed. “Fremantle wouldn’t be where it is if we hadn’t organised the business like that 10 years ago. But I also believe companies should change their structure at least every 5 years — sometimes just for the sake of changing it.
But her reasons for restructuring the company recently were very specific. “I believe in today’s world you cannot work in silos. You can’t have your creative people on one side and your sponsorship people on the other side.”
She said it was important for managers to have a holistic view of the country and of franchises.
“If you’re gonna create a franchise, it’s going have some digital components. You can’t do that if those guys are in another office with another agenda, another objective.”
Moving forward, Frot-Coutaz hopes to go on scaling the company and building across new genres. “Digital will be part of that,” she said, but she also wants to focus on geographic spread.
“In the future we’ll have to be investing more of our own capital. If we’re going have to take more risk, we need to have more scale. Scale matters,” said Frot-Coutaz.
Notably, today FremantleMedia announced a multi-year deal with Youku, a Chinese VOD platform. The relationship covers over 200 hours of programming.
“If you take a backseat view, growth is more likely to grow out of these places (China) than, say, continental Europe,” said Frot-Coutaz.
But she was reluctant to commit to a hard assessment of FremantleMedia’s five-year plan.
“We’re in a business that changes continuously. Even in the best laid-out plans you’ll get hit sideways. I think you have to best be prepared to be opportunistic.”
She nonetheless emphasised the importance of goal-setting. “When you’re clear about what you’re going to do, and more importantly what you’re not going to do,” you have a better shot at arriving where you hoped to be, she said.