Fremantle’s senior leadership has stressed the “great opportunity” and potential for “enormous upside” from investing in feature films.
In a keynote Mipcom interview, Fremantle CEO Jennifer Mullin and group COO Andrea Scrosati talked up the company’s growth in scripted TV and film.
Fremantle has invested heavily in the sector in recent years, acquiring companies such as Ireland and UK’s Element Pictures and Italy’s Lux Vide and Wildside.
In particular, the global production and distribution giant has ramped up its film slate, and produced 33 features in 2021. Its Venice titles this year included Luca Guadagnino’s Bones And All, Emanuele Crialese’s L’Immensità, and Joanna Hogg’s The Eternal Daughter.
Scrosati said: “A group like us needs to take risks. The movie business is an interesting business, because the risk can sometimes bring an enormous upside.”
He stressed Fremantle was not competing in the big budget, Hollywood blockbuster arena – and that its films had a maximum budget of $25m.
He said Fremantle can spread its investment risk across multiple scripted projects, and positioned the company akin to “portfolio manager” but for film and TV productions.
“It sounds a bit cold. But you’re betting on 150 -200 little companies, because every movie, every drama is a little company. And your job as a portfolio manager is to get that kind of bulk that actually delivers what it should deliver. There is a failure component and you need to be ready to fail and actually learn from that fail. Then it’s all about the top 10 to 15% over performance. If you’ve managed to get that you are good and have managed to do a great job.”
Scrosati added that the feature film ecosystem today is completely different to three years ago, and stressed the opportunities for companies like Fremantle operating in the sector.
“Today you can obviously go the traditional [theatrical] route, you can go direct to a screamer. But what I find fascinating is hybrid solutions - where you can have accelerated windows, or theatrical in certain territories and direct to platform in others.”
The movies business was enormously disrupted by Covid lockdowns and the pivot from theatrical to streaming. “Literally in 72 hours, a model that has lasted for 50 years was wiped away,” said Scrosati. “Frankly, I think it was an enormously positive thing. Today, you can monetize the movies across hundreds of different combinations. And it’s not only great for a company like ours, it is also great for talent.” Previously “the value of your entire work depended on how a movie did in the first weekend in box office…Today that’s not the case and that’s why it’s a great opportunity.”
Angelina Jolie deal
The pair also addressed the three-year deal that Fremantle struck with actor and director Angelina Jolie in March to produce a slate of films, TV series and documentaries. Negotiations took place over Zoom after Fremantle learned that she was looking for a producing partner.
“Firstly, Angelina is global, and we are global. She has an impeccable taste, she wants to tell ambitious stories and impactful stories. And so all of those notes and tones really aligned with what we want to do,” said Mullin.
Mullin said that in return, Fremantle offers Jolie creative freedom and independence. “She can tell any story she wants, we can put it anywhere in the world, we can partner her with our creatives around the world. She really felt that Fremantle would offer her the most flexibility, and a home where she could do her very best work.”
Within a week of signing the deal, Jolie went into pre-production on new film Without Blood, starring Salma Hayek and Demián Bichir. The drama shot in Rome this summer, and is now in post-production.
International growth
Elsewhere, Mullin and Scrosati cited Latin America and India as key priorities for growth for Fremantle.
“Latin America and India are priority areas for us right now. We are looking to expand, so we are putting some resources into seeing where there’s either organic growth or transactions that makes sense,” said Mullin.
Mullin and Scrosati said that Fremantle is on target to hit an ambitious €3bn revenue target for 2025 set by its parent company RTL Group.
Asked if Fremantle was “buying revenue” through its acquisitions, Mullin said: “We are not buying revenue, we are looking to grow – that is for sure. We have ambitious growth plans…we have made a very concerted effort to look at businesses and creatives and companies that feel like a good fit for us and that are complementary to the type of content that we’re already producing. It’s very much a portfolio effect.”
Scrosati said that for every one deal that Fremantle has completed “there has probably been ten deals where we have passed.”
Fremantle was cited in a Financial Times report on Saturday as a possible buyer for ITV’s production arm, ITV Studios, whose future is reportedly being reviewed by the UK broadcaster.
Mullin refused to be drawn on the subject. “We read the same thing you read – we read it in the press,” she said.
Inflation threat
Mullin and Scrosati also addressed the likely impact of the cost of living crisis, and possible recession, on the entertainment business.
Scrosati noted that the entertainment industry is “very resilient and capable of adapting.”
He said that Fremantle closed down 420 sets in one day in March 2020 amid the Covid pandemic, and was back in production in September. The following year, 2021 was “the best for Fremantle,” he said.
Inflation, he said, is a “real issue” for the industry, and that rising costs are hitting both Fremantle and its clients. Consumers would become more cautious about subscribing to streaming services amid rising energy bills. “Ultimately, it’s all about the final consumer because that’s where it really hits. And I think that there is going to be work between us and our partners to find a solution to this.”
Scrosati noted that Fremantle’s international reach, operating in 26 countries, was advantageous in helping it deal with the challenge posed by inflation. “There are certain countries where this is a real issue. There are other countries where it’s less. I think we need to be truly global in the way we approach it.”
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