Barely 3 years old, the Los Angeles-based TV arm of indie Entertainment One has made a mark in the network and cable biz by bringing to the table that most precious commodity: financing.

eOne Television, headed by CEO John Morayniss, leverages its heft as a producer and distrib of film, TV and home entertainment fare in Canada, the U.K. and other territories to cobble together coin for TV series in the same way that many indie features are funded, through a combo of foreign pre-sales and advance commitments. It mines the lucrative Canadian system of production incentives and premium license fees given to shows that lense in Canada but also air on a major U.S. network.

This patchwork quilt of funding sources allows the company to offer some series to U.S. networks at a steep discount, often in exchange for big upfront commitments. Its highest-profile series to date has been the adaptation of John Grisham novel “The Firm,” which landed at NBC with a 22-episode order.

The legal ensembler wasn’t that much of a gamble for NBC at a license fee said to be around $1 million, less than what top cablers pay for original drama skeins. Between the coin received from Canada’s Global TV and a big sale to Sony’s suite of AXN-branded international channels covering more than 140 countries, eOne didn’t need big bucks from the U.S. to cover its costs; it needed the outlet to attract name thesps (notably Josh Lucas and Molly Parker) and to ensure the premium license fees from its other partners.

“There’s a proliferation of channels that are hungry for American programming that is a certain genre and tone,” Morayniss said. “When an opportunity comes along get a branded series like ‘The Firm,’ Sony’s AXN came in without the condition of a U.S. sale because they knew we were heavily in this market.”

In many respects, “The Firm” will be an interesting test case for whether the eOne model can survive the big leagues of network primetime. The Big Three have been experimenting with Canadian imports for the past few years, but most of these shows have been relegated to summer runs, as ABC has done with eOne’s cop drama “Rookie Blue.”

“The Firm,” on the other hand, landed a regular-season slot and was touted at NBC’s upfront presentation last May. On the downside, “The Firm” has been mostly panned by domestic critics and got off to a weak start (a 3 share in adults 18-49 weak) in its two-hour premiere Sunday. It will face tough competish in its regular Thursday 10 p.m. berth.

But even if “The Firm” doesn’t go the distance, the eOne model has piqued the interest of the creative community. Indeed, it was Grisham, scribe Lukas Reiter and his reps at CAA that brought the project to eOne after seeing what the company had done with “Rookie Blue” and the Syfy drama “Haven.”

NBC, for one, is negotiating with eOne for a multi-episode commitment to another drama, medical vehicle “Saving Hope,” that has also been ordered by Canada’s CTV. Filmmaker Paul W.S. Anderson came to eOne last fall with a concept for a supernatural procedural drama, “The Reel,” that will be shopped overseas long before it seeks a U.S. home.

Timing was everything for eOne’s push to build its U.S. TV business. In fall 2008, the company bought Blueprint Entertainment, the production shingle run by international TV vets Morayniss and Noreen Halpern, who is now eOne’s prexy of drama programming. Morayniss and Halpern had been pursuing the Canadian content/foreign financing model on their own, but the backing of eOne gave them deeper pockets.

Moreover, eOne’s rollup of Blueprint and other TV companies came on the heels of the 2007-08 writers strike, which was the shock to the system that spurred the major nets to look for new and cheaper sources of programming.

“We’d always had a more global approach,” Halpern says. “All of a sudden that coincided with an interest in the U.S. of putting shows together in a different way — bringing financing out of international markets, using the advantage to be able to bring a significant amount of money out of Canada and other countries as a way to do high-end shows for lower license fees.”

This article first appeared on Variety.com.

http://bellfund.ca/annual-reports/2010/en/home.html

2010 Highlights

·         $11,133,214 was invested in the production of 83 cross-platform television and interactive digital projects

·         $860,575 was invested in the development of 22 projects

·         $122,000 sponsored 22 professional development activities across the country

1997-2010 Highlights

·         $93,222,308 invested in Canada’s cross-platform industry

·         $86,072,915 has been invested in the production of 614 cross-platform television and interactive digital projects

·         $6,291,833  has been invested in the development of 175 projects

·         $857,560 sponsored 149 professional development activities across the country

The Board of Directors salutes its Vice Chair and Treasurer for the past decade, Chris Frank, as he retires from his various duties this year.  Thanks to Bell TV’s contributions to the Bell Fund and his dedicated participation in Bell Fund activities, the Fund has invested $93 M in 938 cross-platform television and interactive digital media projects, since 1997.

Sure, fans can be evangelists for your brand, your distribution channel or your content. Fans can friend you on Facebook, critique you on Twitter and mash up your stuff all over YouTube. Fans can help you with your core business, secure second season pick-ups or boost international television sales. Fans can also inspire you take your entertainment business in new digital directions: onto apps and consoles, social networks and social games. Next up: fans will stand up and count for investors.

Soon, fans will be part of your business valuation, M+A strategies and financings. Here are some reasons why, based on some trends FanTrust tracks:

• The average value of a fan is as high as $136 bucks, based on product spending, brand loyalty and willingness to recommend.

• Fans are more likely to remember brand messaging than other audiences, a powerful reason to build a fanbase as part of any campaign. This is especially true when it comes to mobile fans, according to big brands like Marks & Spencer.

• Facebook fans of big brands like Starbucks and McDonalds spend twice as much as other customers.

• The estimated value of Starbucks’ Facebook Audience: $1.8 Billion.

The right number of fans can not only help you to secure deals with brands, broadcasters and distributors, but increasingly fans are part of the investment mix. Producers raising money to finance media properties need more than just great content for the right demographic, they need a baked in fan-base or at the very least accurate projections about audience reach.

For the past ten years FanTrust has seen lots of business models (and many strange bedfellows) — but only recently an increased attention to audiences, and fans in particular.

We’ve witnessed and advanced this steady rise in both television and new media companies valuing their fans, fan relationships and fan communities.

This is an important development in an entertainment industry where audiences have traditionally been seen as amorphous blobs, like ratings or bums on seats. Valuing fans will bring media rights holders, brands and investors closer together, speaking a common language and putting the committed consumer first.

Next time on the FanTrust blog, FanTrust’s top tips for connecting content creators with distributors and brands.

• The online media sector raised $3.5 billion USD in venture capital in 2008, a 22% increase over the $2.9 billion in capital raised in 2007.
• The “enabling” sector saw the largest increase in capital raised, up 124% with $892 million in 2008.
• The mobile sector also saw big gains in investment capital, with $341 million – a whopping 488% increase over the $58 million raised by the mobile sector in 2007.
• The top five sectors in terms of transaction volume (not reported deal value) for equity raises in 2008 were:
  • Video & Online Games – 59 capital raise transactions;
  • Social Networking – 57 capital raise transactions;
  • Web Applications/Enabling/IT – 47 capital raise transactions;
  • Mobile – 35 capital raise transactions; and
  • Blogging/User Generated – 27 capital raise transactions.

Read the report, available as a PDF download.

Welcome to the FanTrust guide to digital success – Setting Your Digital Resolutions for 2009. December is traditionally a time for reflection and goal-setting, both personal and professional. Though you know what it takes to reach your goals for, say, losing weight (less eggnog, more yoga) or having fun (more eggnog, less yoga) –what if you’re venturing into uncharted business terrain?

Over the last two weeks, we’ve walked you through short, simple exercises – complete with case studies and success stories – intended to spark transformation in your company or division with overall corporate and business goals; digital capacity; market niche and fan engagement strategies.

With more than two decades of experience in digital media, FanTrust can help you grow your digital lines of business. Our hope is to leave you inspired and invigorated for a happy, healthy digital business in 2009.

All the best!

Week 4: Put Your Ideas into Action

Like any resolution, intention without action is useless. In this December blog series, FanTrust has helped your company to articulate digital goals for 2009; identify the niche value offered to your fans; and better understand your fan base. In this final blog, we discuss the need for a digital action plan.

No doubt you’ve identified many digital aspirations for the New Year. A long term vision prioritizes these goals, and assesses the time, financing, man power and strategic partnerships needed to achieve them.

To get started, ask the following questions for each digital goal or project you’ve identified:

• How will I define digital success? New audiences? Direct revenues? New or strengthened business partnerships? Is the project monetizable?
• What are the financial costs associated with this digital venture? Be sure to factor in time for planning, business meetings, securing necessary funding, etc.; employee/ executive time vs. third-party outsourcing.
• What funding/ financing options are available for this project? Canadian content producers can tap into several funding sources; entertainment companies can also underwrite projects through sponsorships, strategic partnerships or smart money. FanTrust can help you select and pursue the best options.
• What is the ROI for this digital project? Is the cost of implementing an idea justified by the payback: market exposure, revenue generation or social impact?

Answering these questions will help you set priorities and benchmarks for success. You’ll know you’ve achieved your goals when you track your results against pre-set, concrete, measureable targets. Good luck for a prosperous 2009!

FanTrust is a full service management consultancy laser-focused on digital entertainment.  We deliver a comprehensive range of services in all areas of new media and multiplatform development, production and distribution – as well as corporate strategy and business development to position your entertainment company in our digital age. For a full list of FanTrust services, visit the Impact + Clients section of our website.

Investors the world over all seem to look for the same things, whether you are in the old-fashioned widget business or the digital media business. Investors that I have worked with over the years all want to see:

• A great management team – source world-class talent
• A specific niche within the competitive landscape – you want some competition; Pepsi isn’t Pepsi without Coke
• A solid business plan and revenue model – use standard financial models, especially when projecting crazy-strange digital ideas
• Audience and Traffic; including community-building potential – valuations can be made or broken on these stats! It is worth noting that investors valued AOL customers at double what they valued Time Warner’s because of the profound AOL/ consumer relationship.

Of course, it’s just as important for entrepreneurs to carefully research and identify the right VC for their company. BusinessWeek recently wrote a great article on the topic, recommending that investors take into account (among other factors) the fund size, M&A/IPO exits and company shutdowns of VC firms in consideration.

Ultimately, creating a winning digital entertainment business is a trust-building enterprise. Amazon’s CEO Jeff Bezos would be the first person to tell you customer relationships must be earned — and re-earned — every day. Trust your fans. And, above all — as with all great entrepreneurs – trust your instincts.