AAM Scales Down Alternative Content Division
Submitted by Nick Dager on Fri, 01/13/2012 - 11:39.
By Melissa Keeping
In a move that’s certain to surprise the industry, it’s been reported that market leader Arts Alliance Media have dramatically cut their UK-based Alternative Content Division.
Although this has yet to be formally announced, vice president Elizabeth Draper is allegedly no longer with the company, and several of her colleagues have also found their roles made redundant. There is still a skeleton crew of staff handling ongoing theatrical releases but the future acquisition and marketing of content on a large scale has been cut.
Arts Alliance Media declined to comment on the reasons for this action, but sources close to AAM say that all indications so far point to the division’s high overheads. While its output of alternative content was impressive, with Pearl Jam, Chasing Legends, Iron Maiden’s Flight 666 and most recently George Harrison’s Living in the Material World biopic among its hits, the box office results were evidently not substantial enough to sustain the business long term. Others claim that there’s been a change in key strategy, and that the core business of AAM as a technical and VPF provider, is considered profitable enough to focus on entirely without diluting the brand and spreading itself too thin.
Arguably this won’t be the last of the alternative content distributors to shut its doors. In a business so uniquely niche and untested at this point, there are operators springing up all over Europe and North America all claiming to have the key to breaking this tricky market, and yet at this point, nobody has quite cornered it, and there will inevitably be casualties as the market develops and matures (not to be confused with content providers like the Met, who have most definitely cornered the market in their own field, opera).
Companies like Arts Alliance Media, with a background in VPF financing and as technical providers, would have evaluated the risk involved in moving into the highly unpredictable area of theatrical distribution, and unfortunately have decided not to proceed further; perhaps the risks outweighed the benefits.
The acquisition of premium content remains the holy grail for distributors at present, which can take years of relationship-building and negotiation, and once that has been achieved there is the magical combination of strategic low-cost marketing, the buy-in and co-operation of the participating cinemas and sufficient publicity to garner a decent box office result, and like any theatrical release, the results are never predictable. Combine that with the competition of an increasingly crowded marketplace, and perhaps AAM have decided that the margin is just too low and uncertain to sustain continued investment for the time being.
On the plus side, the alternative content industry has never been so buoyant, and this news should not be taken as indicative of the industry as a whole. The cinema-going public is becoming more savvy and particular as time progresses, raising the bar for distributors who can no longer offer poorly produced alternative content, which has happened on occasion in the past, and raising expectations as a whole. Content providers are now much more aware of the potential profit in a theatrical release and are beginning to build this into their schedules alongside a world tour and a new album, something which even two years ago was a rarity.
With operators now choosing to specialise in one or two content areas rather than offer a bit of everything, the market is beginning to demarcate itself into a premiership of several larger key players and a first division of smaller boutique agencies. In time it’s possible that the smaller companies will be swallowed up into the main competitors, bringing with them the niche experience and the key contacts that make this business what it is, and the industry may begin to resemble the mainstream studio business, though without the monolithic infrastructure and gargantuan budgets.
Overall though, it’s best to remember that this is a business very much still in its infancy; after all, it really only spluttered to life about 5 years ago and is far from peaking yet. The industry is in a state of flux and this is as much to do with the web of complex issues outlined here as the wider state of the economy, not least the wobbly condition of the single European currency. Wry images of a beleaguered Angela Merkel, German Chancellor, endlessly searching for answers in her handbag abound in the British press at present, reflecting uncertainty everywhere. Budgets are being cut at all levels and like much of the media industry in recession-hit regions, content providers, distributors and exhibitors are understandably proceeding with caution. But with the infrastructure looking more settled and solid than ever, content more readily available and the mood of distributors positive and excitable, the future, if perhaps not the present exactly, is looking bright.
In a move that’s certain to surprise the industry, it’s been reported that market leader Arts Alliance Media have dramatically cut their UK-based Alternative Content Division.
Although this has yet to be formally announced, vice president Elizabeth Draper is allegedly no longer with the company, and several of her colleagues have also found their roles made redundant. There is still a skeleton crew of staff handling ongoing theatrical releases but the future acquisition and marketing of content on a large scale has been cut. Arts Alliance Media declined to comment on the reasons for this action, but sources close to AAM say that all indications so far point to the division’s high overheads. While its output of alternative content was impressive, with Pearl Jam, Chasing Legends, Iron Maiden’s Flight 666 and most recently George Harrison’s Living in the Material World biopic among its hits, the box office results were evidently not substantial enough to sustain the business long term. Others claim that there’s been a change in key strategy, and that the core business of AAM as a technical and VPF provider, is considered profitable enough to focus on entirely without diluting the brand and spreading itself too thin.
Arguably this won’t be the last of the alternative content distributors to shut its doors. In a business so uniquely niche and untested at this point, there are operators springing up all over Europe and North America all claiming to have the key to breaking this tricky market, and yet at this point, nobody has quite cornered it, and there will inevitably be casualties as the market develops and matures (not to be confused with content providers like the Met, who have most definitely cornered the market in their own field, opera).
Companies like Arts Alliance Media, with a background in VPF financing and as technical providers, would have evaluated the risk involved in moving into the highly unpredictable area of theatrical distribution, and unfortunately have decided not to proceed further; perhaps the risks outweighed the benefits.
The acquisition of premium content remains the holy grail for distributors at present, which can take years of relationship-building and negotiation, and once that has been achieved there is the magical combination of strategic low-cost marketing, the buy-in and co-operation of the participating cinemas and sufficient publicity to garner a decent box office result, and like any theatrical release, the results are never predictable. Combine that with the competition of an increasingly crowded marketplace, and perhaps AAM have decided that the margin is just too low and uncertain to sustain continued investment for the time being.
On the plus side, the alternative content industry has never been so buoyant, and this news should not be taken as indicative of the industry as a whole. The cinema-going public is becoming more savvy and particular as time progresses, raising the bar for distributors who can no longer offer poorly produced alternative content, which has happened on occasion in the past, and raising expectations as a whole. Content providers are now much more aware of the potential profit in a theatrical release and are beginning to build this into their schedules alongside a world tour and a new album, something which even two years ago was a rarity.
With operators now choosing to specialise in one or two content areas rather than offer a bit of everything, the market is beginning to demarcate itself into a premiership of several larger key players and a first division of smaller boutique agencies. In time it’s possible that the smaller companies will be swallowed up into the main competitors, bringing with them the niche experience and the key contacts that make this business what it is, and the industry may begin to resemble the mainstream studio business, though without the monolithic infrastructure and gargantuan budgets.
Overall though, it’s best to remember that this is a business very much still in its infancy; after all, it really only spluttered to life about 5 years ago and is far from peaking yet. The industry is in a state of flux and this is as much to do with the web of complex issues outlined here as the wider state of the economy, not least the wobbly condition of the single European currency. Wry images of a beleaguered Angela Merkel, German Chancellor, endlessly searching for answers in her handbag abound in the British press at present, reflecting uncertainty everywhere. Budgets are being cut at all levels and like much of the media industry in recession-hit regions, content providers, distributors and exhibitors are understandably proceeding with caution. But with the infrastructure looking more settled and solid than ever, content more readily available and the mood of distributors positive and excitable, the future, if perhaps not the present exactly, is looking bright.
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