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Cross-border Transactions: Pain Points and Solutions

Cross-border Transactions: Pain Points and Solutions

Top studios in the US, Brazil, India, and other major markets are reluctant to license their best work as they plan their own streaming services.

Team Vitrina
August 23, 2021

Industry Pain Points

Lack of data is the biggest pain for the industry

Every year, the global entertainment industry spends about $255 billion buying and producing content.

Where does the money go? Which stories and genres are getting funded, and in which markets? Which are the rivals Netflix is encountering as it chases storytellers, talent and studios in different countries? Which content, originally produced for a local audience, is being picked by global streaming players? 

There are simply no deals data to track the what and where, and explain the why. An information that is critical today when global content budgets are in a state of flux.

Media deals that are top of market today may not be the core focus next year

Top studios in the US, Brazil, India and other major markets are reluctant to license their best work as they plan their own streaming services. 

Covid-19 has had a crushing impact on box-office launches, and has changed the traditional pattern of theatrical releases.

The economics of content production and content acquisition are not insulated from such shocks, and beg for deals tracking.

Scale of content production has been growing tremendously year-on-year

Over 100,000 TV channels, streaming platforms, studios, cable and satellite companies worldwide are furiously adding more than a million new video content titles every year to an existing basket of about 15 million.

Data on these production, acquisition or distribution deals are disaggregated and unstructured. Or, simply, unavailable.

Predicting content potential based on current trends is a challenge

There is a constant battle to predict what content is ‘in demand’ for acquisitions. Industry players have been resorting to crude methods to track patterns and trends. 

Interns and new recruits are asked to tabulate last known deals by competitors, streaming companies and major studios.

Anecdotal calls to ‘experts’ for ‘signals’ is yet another means.

Incomplete information leads to incomplete conclusions

Extracting details of deals is also complex and time-consuming. The data sets are either buried in press releases or are often semi-structured, owing their origin to industry bodies that track deals only for specific markets. 

Most of the information is circumstantial at best.

Unavailability of financial specifications of ongoing deals leads to non-standard pricing models

In any cross-border deal, while the bulk of the funds is spent on production and acquisition, distribution often forms a major part of the money trail.

While distributors are not shy about announcing the deals, they keep the financial specifics close to their chest. Dearth of details leaves the streaming giants at a disadvantage while negotiating.

Leakage of information via grapevine creating misinformation

Sometimes, small local studios that are already under exclusive content contracts, continue dialogues with rival streaming companies to gather intelligence, leaving parties on the other side of the table vulnerable. 

The Vitrina Way

Using technology to convert unstructured information into structured data & analytics

There is a certain way that money flows into the video entertainment industry. 

Vitrina aims to use its proprietary AI and analytical expertise to trace this path: from where the money is coming in, and where it is going.

A system is being created to capture data that would indicate what content is getting funded, in which markets, in which genres, and by which companies. Also, who the recipients are.

The information culled from published sources and industry experts would explain how the industry is structured, and which constituents are critical in the flow of the big bucks: the countries, studios or the distribution companies

Connecting the dots across all aspects of content funding life-cycle

What kind of stories should get funded, or the nature of content that must be created is a function of what content is being traded.

Vitrina aims to piece together the entire story. From the source of the money to what type of content is attracting more funds, which the top markets are, and the diverse choices that an entertainment company might be making in different regions.

Vitrina would also pick out the prominent dealmakers in different markets, and examine the nature of their deals.

Not limiting to specific deal makers; Vitrina is covering the longtail across regions

Vitrina would go beyond Netflix, Amazon or Disney and dig deeper in order to identify the mid-sized or still smaller players in different geographical areas.

Its pecking order would also include local, pan-regional or regional companies which might be regularly spending substantial money to produce content.

Vitrina would examine the size of such deals, genres that are drawing the funds, and regions that are seeing maximum action.

In the course of its search, Vitrina would also identify the biases, prejudices and preferences in language or genre. Were certain studios or themes being patronised more than others?

Vitrina Deal Intel’s winning formula is to deliver accurate information every time

Such deal intel, combined with an AI-powered robust supply chain search, would give Vitrina its winning formula.

At every step, Vitrina would read authentic information from appropriate indicators to improve the quality of choices in the selection of content, partners, and markets in cross-border transactions.

This would remove the ambiguity that exists in cross-border transactions today.

Verifying credentials of partners is a challenge in new markets. There are no proven reputation indicators to verify the specializations and genuineness of partners in trans-border deals. 

Popular search engines are still the default tools and, at best, their results can be cross-checked with the target’s business associates.


Ratings disparity

Algorithms apart, there is disparity in the supply chain itself that slows down the evaluation process in developing markets. In the U.S. or the U.K., for instance, services such as concept and scripts, sound effects or animation are standalone services offered by super-specialists. So, vetting is easy. 

Contrast this with unorganized markets such as India or Poland, where one service provider offers all those services. Comparing companies on a specific expertise becomes complex, if not impossible.


Name-dropping

With no established processes, local service providers often resort to unprofessional means to snare contracts. Name-dropping is one. To impress clients, they boast about their links with local celebrities and prominent persons, and claim to have made big contributions to successful shows. It is difficult to ascertain the veracity of their statements.

Lack of transparency

Another bane is the lack of transparency. Take the case of an independent producer from Jordan seeking to go west. When she reached out to distribution companies in Los Angeles, London and Amsterdam, they welcomed her content but refused to share details about buyers.Next, she learnt, her production had been screened at multiple film festivals. Accolades came, but little income.


Fixers and consultants

Hiring local fixers and consultants helps. Bigger companies also invest in local offices and operational hubs. While this could resolve some of the issues in the primary markets, problems persist in the secondary and tertiary ones.


Non-standardized forms

Adding to the verification dilemma are non-standardized forms for so-called Request for Information or Request for Proposal. Not only are they long, but are differently worded and nuanced. This prompts local vendors to devote their time and best resources on filling these forms, to bag big contracts.

‍ The Vitrina Way

A secure marketplace provides a platform where every buyer and seller has been thoroughly vetted, eliminating chances of fraud.

Vitrina ensures this by putting guard rails on its platform.


Internal team

Our team identifies bad actors or potential ones, and such companies are kept out of the platform. 

The team weeds out those that mis-represent facts, or make claims not backed by demonstrable proof.

The launch, for example, will exclude all freelancers from its database. Only companies will be featured.


Official Email IDs

One primary condition to qualify for the Vitrina platform will be an official email ID. In the absence of that, a couple of other documents will be required. 

Vitrina is in the process of outlining the list of documents. The documents required to prove the legitimacy of a company and its appropriate representative may vary for different countries. 


Setting triggers

Even when onboard, the platform will set parameters monitoring not just the credentials but the activities undertaken by the participants.

These would trigger alarms within the system if any member makes false performance claims.

In that case, they would be instantly removed from the system.

AI, the key pillar

Its proprietary AI has given Vitrina the confidence and scale to delve through massive volumes of unstructured data sets, find patterns and report anomalies.

For example, if a company offers a long and convoluted explanation about its work, the AI is able to dissect and identify the exact nature of services that the company provides, compare this with competing services, and club them in a specific category.

Pain Point: Supply Chain Mapping

The absence of multi-country mapping of the global supply chain is one of the biggest hurdles in  cross-border transactions. As streaming multinationals engage in buying and selling content across geographical boundaries, the paucity of information about prevailing norms, local parlance, and regional insights is pushing them to rope in indigenous partners. 


The challenge is picking the right allies from a host of studios, dubbing companies, production houses, distributors, translators, writers, actors, directors, and ancillary service providers, who together constitute the content supply chain. 


Data Scarcity

There is negligible data about these service providers in any market. The majority of sellers and buyers physically sift through distributed material, jot down names and contact details of potential collaborators, and then write to them individually. 

 
Subjective Choice

Inadequate assessment parameters delay the process of selecting a local vendor. Also, the absence of a curated list of the best and next-rung players leads to subjective choices. Bias is common, and the risk of the same names appearing repeatedly is high. By the time the verification is complete, a rival has taken the vendor.


No standardization

The lack of a standard format to seek information or negotiate is yet another stumbling block. Collaboration often involves long, complex questionnaires. There’s no uniformity of keywords across boundaries - ‘localization’ in one country could mean ‘sub-titling’ in another. 

Current scenario

Many streaming companies are asking their content search agencies for data that simply doesn’t exist. So, they have to rely on industry sources, keyword-based search engines, or hurriedly-culled directories and documents in private circulation. Commonly called trackers, these are spreadsheets and manuals resembling the early web directories. 

‍ The Vitrina Way

Vitrina’s primary objectives are to build a robust database and a secure search platform that are bereft of inherent prejudices.

Global census

As a first step, it conducted a simultaneous census of all the major global markets, and all companies within the content supply chain in those territories. 

A census meant no company would be favorably picked. The exercise culminated in an extensive list of 226,000 companies. 

This is being curated to build a database, which would include information about 60,000 production studios and content services companies across 30 countries, as well as 200 OTT platforms and television networks.

Vitrina plans to make the census a regular feature. “We hope to do a census of companies for markets of our choosing, and keep expanding to new countries,” Founder Atul Phadnis said.

Thorough vetting

To ensure the information about the companies in its database is accurate and unbiased, Team Vitrina cross-checks facts through multiple data sets, and gets past and current work profiles vetted from diverse sources.

Uniform taxonomy

As the data is segregated, many classification systems are at play, in content, services and within companies.

Team Vitrina has a deep understanding of data and metadata, along with an accumulated global experience of content data and industrial intelligence within the video content industry. 

This knowledge is coming in handy as it creates a single system of global supply chain classification for all companies. 

It is also compiling an accurate and exhaustive list of both the services and credentials of those companies, which will successfully remove vocabulary mismatches and move from a non-normalized taxonomy to a normalized one.

The result

When the census, classification system, past and current work profiles of companies in Vitrina’s database are linked up, the product will be a sophisticated search platform for the video industry.

This will enable the ranking and discovery of companies in different geographical locations, of diverse specializations, of specific genres and multiple language proficiencies.

ABOUT THE AUTHOR
Team Vitrina

Vitrina AI is a SaaS platform for the video content industry to facilitate & enable global cross-border transactions.

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