Television revenue model proves winner for Decode’s digital program extensions

Toronto’s Decode Entertainment Inc. is bringing a proven revenue model for television to an ambitious new web project that could push the envelope of co-branded content. Building on the popularity of its show The Zack Files, broadcast on YTV in Canada, Decode is building a unique interactive component for the show, live-action shooting for which will start in the next few weeks. Like its other extended web properties, Decode is counting on competitive licensing fees charged here, in the U.S., and Europe in multiple territories to cover production costs. It’s a model the company has already successfully employed for properties such as Angela Anaconda, and interest has proven high enough in other markets that the company is already predicting success. While the model for making money may seem familiar to those who have watched recent successes by fellow Toronto company Snap Media and Halifax’s Collideascope, the scope of the project represents a first in Canada. It will be the first time live action will be made interactive on the web in conjunction with traditional broadcast content. The project poses some technical challenges, but Dan Fills, director of Decode’s interactive division, says extensive testing of the technology leaves him confident the system will work. He says the background set will be downloaded as a still image to save bandwidth, and only a fraction of what users see on screen will be live action. For the first time, he says Decode is specifically targeting broadband users who can best take advantage of high-download speeds to interact with the actors. "What we’re doing is almost treating it as animation," Fills tells Canadian NEW MEDIA. "There are live action actors, we’re shooting it as live action, but what we’re actually going to do is hold a still frame of the set behind the actors…there will only be this small box where the actors are moving and interacting. That’s the only part that’s going to need to be downloaded as video. The reason we’re doing this is that it makes it so much more efficient to download. It would take hours to try to get a whole episode of the show online. And, it keeps the file size down, so costs are down as well." The broadband project will use Zack Files actors and writers to shoot several linear movies, which users will navigate as they make choices about how the action will flow. The object is to make 10 correct decisions at the various stops to arrive at a successful conclusion of the narrative. Some choices will be simple, says Fill, but others will be aided by content and clues hidden in the web page and some clues will be disseminated during the course of the TV show, of which production of the second 26-episode season has just concluded. The narrative will also be helped along in Zack’s "community", an online forum for discussion of the show. Fills says projects such as these have been made more promising this year as a result of new models that include both broadcasters and digital content players. He notes that media consolidation has resulted in greater funding available for digital experiments as the biggest players such as Shaw Communications Inc. and BCE Inc. vie to fill their pipes with content. "They’re banking on the future," says Fills. "Eventually, there might be a good revenue stream… It’s not like they’re making an investment that isn’t going to be recoupable in the future. What we’re trying to do right now is make it very palatable for broadcasters who are saying, ‘ok, this isn’t 1999 anymore. We don’t think we’re going to make $2 billion in ecommerce sales off the site, which will add to the $800,000 in advertising revenue, as well.’" As a result, Fills says working with broadcasters to improve their value proposition is key to taking advantage of new opportunities to sell digital narrative content. "(Broadcasters) know there’s a large audience that’s online right now. They’re not going to go somewhere else. So, why don’t we give them some content at a very reasonable rate that will bring value to the station. That’s one of the big things with us. We’re very humble in the belief that it’s more important that the audience knows it’s Zack Files on YTV in Canada, than it knows Zack Files was produced by Decode." He says charging low licence fees improves the odds of picking up multiple territory deals to cover costs, a task made easier by the funding available in Canada for digital/TV production. He cites the new Telefilm Canada New Media Fund, the Bell Broadcast and New Media Fund, and Vidéotron’s Fond du Savior as three "smart" funds to which companies can turn. He says that, even more so than for TV, a large portion of the funding for such projects can be raised within Canada. Besides licence fees, the company also garners revenue on such jobs as translating the sites for other territories, re-shooting for foreign markets or adding sub-titles. "We’ve come up with our own little model that’s generating a lot of interest from independent producers and broadcasters. It’s not that we’re that smart. All we did was take a model that’s very similar to television distribution. You have a budget for your project and you licence a regional version of the content for a fraction of what it costs to produce it. Then, over a number of territories, you recoup your investment. Luckily, in Canada, we’re in a great position because we’ve got the Bell Fund, which gives us some assistance. Canadian broadcasters have really started to come around to the idea of making a small investment."

Television revenue model proves winner for Decode’s digital program extensions

Broadcast | December 21, 2001

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