As Power To The Pixel’s London Cross-Media Forum kicks off today, beActive’s Nuno Bernardo presents one model for financing development of transmedia projects.
Liz Rosenthal, founder and CEO of Power To The Pixel, opened the fifth London Cross-Media Forum by remarking that the biggest challenge facing the growth of transmedia was financing.
“It’s is a huge challenge finding finance for these projects even though there is a huge demand for them from audiences, she noted. She added that with the economic crisis, “cross media funding is the first to go.” [The exception to the rule is in Canada, where new multi-platform funding rules are making it the transmedia envy of the rest of the world.]
So there was a lot of attention on Nuno Bernardo, producer and & CEO beActive and author of The Producer’s Guide To Transmedia, as he presented his talk to PTTP about how to finance transmedia projects.
Firstly, he clarified that making money out of transmedia and finding financing to produce transmedia were two different things.
He noted that the question he is most asked is “What is the business model for transmedia?”
His answer? “It’s the same model that is always was, audience or advertising — you can make revenue if your audience pays for your content or you give away content for free and have a big enough audience for advertisers to pay.”
Bernardo continued: “If this business model exists, why do we keep saying there is no business model in transmedia? I think we are confusing that with ways to finance the content. There is a lack of an established financing model.”
The old models of funding film and TV (through a combination of film boards, sales agent MG, local broadcaster, equity, tax credits, co-production incentives) don’t work for transmedia, he explained. And the new distribution partners — the likes of YouTube and iTunes — “allow you to reach a global audience but they are not the ones who want to take the risk [for production funding], they want the producer to take the risk. So that starts the problem of how we are able to fund our productions.”
He added: “Also these platforms don’t recognise the old traditional way of selling content on a territory by territory basis…when we have global shores, this notion of territory just doesn’t work.”
So, he suggested, the new financiers of transmedia wil be (in order of activity now) advertisers, broadcasters, film boards, MEDIA, co-production, sales agent MG, equity and tax credits.
In the same way that advertisers were relucantant to pay for TV advertising when that was a new medium, they are now skittish because the audience for transmedia needs to be proven. He said in no uncertain terms: “the biggest asset you have is your audience.”
He added: “IP [intellectual property] is not just a good idea or a good story, it’s the idea or story matched with the audience. The audience is what makes it IP.” That approach is based more on the R&D model used in the pharmaceutical industry [with funding tied to potential patients] than traditional media financing.
Bernardo also noted that when he is negotiating for financing, he uses figures and audience numbers for convincing. “I try to avoid having creative discussions, I go there with products, people know how to invest in products,” he said.
Bernardo said his company has been using the following sources of finance to develop its transmedia projects: R&D funds, tax credits for private investors such as EIS schemes, start up seeding capital/angel investors, private equity, and regional/national film boards and funds (although not all of the latter are enabled to back transmedia projects).
That funding is then used to: develop the storyworld, create the pilot, test and create the audience, invest in marketing, and protect/patent brands.
At the end of the development, a producer has: scripts, pilot, audience, a brand, a sales pitch and business plan.
In his model, the return on investment comes from any of the following: selling content, advertising against content, product placement/brand integration, format licensing for TV, games, books, film or other products (such as toys), or selling IP to a studio or network.
beActive, which has operations in Portugal, the UK, Ireland and Brazil, has worked on projects including Sofia’s Diary and Flatmates.
Bernardo is also involved in Portugal-based Invicta Angels, which backs new creative ventures. That outfit currently has a Euros 1.5m fund, which increases to Euros 6m in 2012.
Power To The Pixel’s Cross-Media Forum continues Wednesday with pitching sessions and Thursday with a new think-tank.