Pre-MIPTV interview series: John Rossiter, Sony Pictures Television Networks

John Rossiter

Sony Pictures Television Networks’ general manager for central Europe, John Rossiter, talked to Andy McDonald about the expansion of its linear channels business and the importance of SVoD. 

Sony Pictures Television (SPT) Networks started the year with what John Rossiter, general manager for Central Europe, described as a  “milestone” deal that would boost its audience share in Hungary and across the region as a whole.

In February, SPT Networks agreed to buy Hungarian TV channels Viasat3 and Viasat6 from Modern Times Group, taking SPT’s Hungarian offering to five linear networks, with the stations sitting alongside existing brands AXN, AXN White and AXN Black.

Speaking at the time of the deal, Lyle Stewart, senior vice president, SPT Networks, for the CEEMA region, said that the agreement “clearly strengthens SPT Networks’ position in the Central European market”, adding that “SPT is focused on further growing our business over the coming year”.

However, the deal exemplifies just one of two main growth areas for SPT Networks in this region. The further rollout and expansion of SVoD service AXN Now, which SPT Networks provides in partnership with central European operators, is also a major focus for the company, helping to grow its business at a time of changing consumption habits.

Linear opportunity 

Discussing the Viasat channels deal, Rossiter says that the rationale behind taking over the stations was based on “reach and market share” and claimed that, should another similar opportunity arise, SPT Networks would look to “replicate the strategy”.

“We realised the channel business is getting much more competitive and we understand that we need a certain level of scale,” says Rossiter, citing the relatively high market share of Viasat3 and Viasat6 and the strong crossover potential the networks have in terms of audience. “What we also liked about Viasat3 in particular is that it’s more of a general entertainment channel. AXN is focused on action and drama and this GE channel allows us, particularly from a production standpoint, to have more options. So we can look at everything from comedies, to realities to crime dramas,” he says.

Last year, AXN in central Europe started producing of its first local Polish content – a three-part mini-series based on Swedish crime production Morden i Sandhamm, directed by Greg Zglinski and produced by Opus Films. Rossiter describes this as SPT Networks dipping its toe in the water, but says “production is becoming more important in this more cluttered world”.

Rossiter is based at SPT Networks’ regional Budapest headquarters and his remit covers localised feeds across Poland, Czech Republic, Slovakia, Hungary, Romania, Bulgaria, Slovenia, Croatia, Serbia, Bosnia and Macedonia. Discussing key growth markets in his footprint, he points to Hungary, Poland, and Romania and says that, should an opportunity like Viasat3 and 6 – an attractive business with willing buyer and seller opportunity – emerge again, SPT Networks “would definitely look at it.” He says that building market share is becoming increasingly important and “you have to find your opportunity in a market that’s so competitive.”

Online opportunity

In addition to its linear channels, SPT Networks’ digital business in central Europe includes catch-up service AXN Player and its subscription video-on-demand service AXN Now. The latter is offered through operator partners and is a major component of SPT Networks’ overall strategy in the region.

In the digital space, SPT Networks has two major factors playing to its advantage. First, in Sony Pictures, it has a wealth of content to draw from, and it is supplementing this by acquiring additional programming for AXN Now. Second, in central Europe, SPT has something of an advantage as the major brands that are creating waves in the SVoD market in western Europe – namely Netflix and Amazon – have not entered the region – at least not yet.
In January Netflix said it plans to complete its global expansion over the next two years, outlining plans to up its footprint from 50 to 200 countries. In a letter to shareholders to announce its fourth quarter 2014 results, the streaming media company said it would launch in Australia and New Zealand in late Q1 2015 and then go live in “additional major countries” later this year.

Rossiter says that the current absence of “those larger scale brands” in the SVoD space has provided an opportunity “to bring great products” into the market. “We’ve got a lot of benefits, because we know a lot of the players in the market, we know the price points, we know that we have the partnerships. We see an opportunity to build a business that’s very beneficial for both and we can acquire from a wide range of content producers, because we understand [that],” he says. “Take AXN Now, we’ve got some great SVoD titles, the best that you can get, and we’re flexible. One of the ways [we do this] is we could buy from a wide range [of sources] and we could pick shows much more like an over-the-top independent business can do.”

As Rossiter points out, Sony Pictures Television has itself been a “prolific producer” of series that have performed well on SVoD services. Breaking Bad is a case in point, picking up a huge following on Netflix following its initial run on networks such as AMC in US. House of Cards, a Netflix original drama, meanwhile, is distributed internationally by Sony Pictures Television. Both shows feature on AXN Now.  “The great thing about AXN Now is it allows us to utilise that great product that we wouldn’t be able to even put on air just for commercial purposes, because it’s a different target market,” says Rossiter, claiming that certain Sony-produced content, though high quality, “doesn’t work on our linear channels”.

“We see content very broadly as one big hub,” says Rossiter, claiming that the question is “what’s the best way to get it to market?” He says that certain kinds of content can reach the viewer in some ways better than other types of programming and it is important to work this out. “We have linear TV and we have people that want to be entertained; they want lighter entertainment, and maybe something that they don’t have to tune into all the time in our markets. Whereas on the other side you’ve got that binge viewing, which is served better by SVoD,” says Rossiter.

AXN Now expansion

AXN Now started life two years ago in an effort, says Rossiter, to create a service “without thinking about limits”, that would offer “1,000 hours of the best series” without charging the earth.” Though the AXN Now is still rolling out, SPT Networks secured a number of new distribution deals for it in 2014 – for example it is available on UPC’s MyPrime service in Poland and Hungary, via nc+ in Poland and through Telenor in Hungary. “The service is available via most top platforms in central Europe and [there will be] more deals to be done,” says Rossiter.

“We found a business model that works, which is bundling it in on an a la carte service, and we believe that the bundle, working with operators on their bundle, is a win-win for us,” says Rossiter. He claims that continuing to roll out AXN Now is a focus and that SPT Networks is continuing to have discussions with “very big players across the region”.

Discussing SPT Networks’ focus for the year ahead, Rossiter says that the further rollout of AXN Now and SPT Networks’ integration of the Viasat channels in Hungary are its top two priorities. Expanding the linear and SVoD sides of its business are equally important, he says, adding that “one is not hurting the other.”

“I think that, because we’re in quite a unique position, we could build two businesses and there is content that crosses over. So I think they’re equally important, because viewer habits are changing and there are opportunities to be a first mover,” says Rossiter.

“We were able to have different kinds of discussions on that SVoD side because we were first mover. At the same time, when you look at an established business like what we have with Viasat and AXN, you know that the bigger you are, the more reach you have, the more attractive you are to advertisers [and] the more attractive you are to distributers. So I think that it’s equal.”