When David Frank formed Dial Square 86 after leaving Zodiak Media in 2013, he set out to invest in disruptive digital companies. But that has now changed. David’s brother Matthew joined Dial Square the following May, sparking the new company to look at the content sales sector. “We looked at large, medium and small companies, and realised the opportunity was not in buying a distributor but in disrupting the market itself,” says David Frank. “It became clear that everything else in the content market has changed dramatically in the last ten, or even five years. The one thing that hasn’t changed at all is distribution.”
This was the rationale for TRX, an online trading platform that will connect buyers and sellers in an eBay-like environment. Management hope the platform, which is now the sole focus of Dial Square, will be ready for a MIPTV 2016 launch.
TRX is designed to be a place where secondary rights – those left on the table after the primary broadcast deal and any presales are done – are traded. There will be about 10,000 hours on the system at launch and Matthew Frank says he expects many of the top distributors to participate. TRX has also made an effort to bring the US channel-operating groups on board and Discovery Networks International, PBS Distribution and Turner are taking part in the beta test. Distributors including Cineflix Rights and Sky Vision are also among the beta testers.
There are, according to Matthew Frank, a growing number of acquisitions folk in the content business who need a system like TRX. He says: “When I left Zodiak Rights there were 400-500 registered buyers on the [company] system. We estimate there are now 14,000-15,000 content buyers and a lot of people not even on the radar of distributors.”
While not specifically aimed at buyers from smaller territories and services, an online platform does allow acquisitions execs with more modest budgets access to sellers. Equally, for sales execs, a series of online transactions in territories they cannot regularly visit, makes sense. “If you are a smaller VOD buyer, or smaller platform buyer in a far-off market and you can’t actually get a meeting with most of the distributors at a market, then it does not make sense to spend all of that money going,” says Matthew Frank. “TRX allows any registered and verified buyer, no matter how big or small, to trade. A lot of people out there want to buy content and struggle because they can’t access the libraries of the bigger distributors.”
When a deal is agreed on TRX, a 21-day window opens. In that window, buyer and seller must agree payment terms, delivery specs and contractual terms and definitions. Assuming these are satisfactorily concluded, the deal is done and TRX takes its 10%.
At the premium end of the content spectrum, however, distributors do not want to see their product, and a price range, listed side-by-side with that of their peers. That is why TRX has recently added private marketplaces (PMPs) of the kind that exist in some advertising sectors.
“People are happy to have the longer-tail and back-catalogue content in the open market but for the more premium content, where pricing becomes more sensitive, there are private marketplaces, which are like a private meeting room in a booth in Cannes,” Matthew Frank says.
The digital trading space is not crowded, but TRX will not be the first to market. Berlin-based Mediapeers was sold to Deluxe last year and runs the MPX business-to-business marketplace. It counts Lionsgate, MGM and FremantleMedia among its customers. UK-based ScreenHits also has a B2B platform and has launched a consumer-facing service to allow content companies to test programming with the public and sell directly to them. LA-based Filmtrack, meanwhile, has clients including A&E, National Geographic Channel and HBO.
The physical markets appear to have the most to lose if buyers and sellers move to TRX or any of the abovementioned systems.
Understandably, Laurine Garaude, director of MIPCOM organiser Reed Midem’s TV division, begs to differ. “MIPTV and MIPCOM bring together the global content ecosystem and are where television producers, distributors and acquisition executives from around the world come to do deals,” she says. “Face-to-face remains a critical element of the business process. In addition, these relationships increasingly involve projects at the early stage, where investments and coproduction alliances are discussed or format deals imagined.”
The markets are also, increasingly, about more than just buying and selling. Garaude says: “When you factor in the extraordinary learning possibilities offered by the MIP conference programmes, the opportunities to meet with start-ups that are transforming the entertainment industry and the long-term relationships that are formed at the MIP events on a truly global level, we are confident that they have a healthy future.”
Matthew Frank agrees with the MIPCOM chief and says TRX will not replace the need for physical events. “In fact quite the opposite,” he says. “TRX allows people to transact very quickly in an online environment, but it doesn’t market or promote shows. That is the function of MIPCOM or Natpe or ATF. TRX kicks in as those markets finish.”
One issue for time-poor distribution execs is the effort required to get content on a digital system. TRX execs say they can partly automate the uploading of metadata and, acknowledging that it is a chore, will help companies to get their complex rights details on the system. TRX is placing a big bet that it can persuade sellers its system is worth that investment in their time. “The benefits of going through that are worth it if dealing becomes much quicker and then you are monetising content that was gathering dust,” says Matthew Franks.
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20 June 2018 @ 12:15:00 UTC