Simon Brown and Adrian Wills launch valuation service

EXCLUSIVE: Last year’s labor strikes may have finally convinced the major players to revamp their policies streaming residuesbut the debates over compensation are far from over or unique to the US

Through their young consultancies, British TV veterans Adrian Wils And Simon Brown are on a mission to help producers, talent and agents grab a bigger slice of the streamers’ pie.

Working closely with analytics company Digital-i, the pair, who between them have decades of experience working for the likes of BBC Studios and UKTV, have developed a formula to broadly work out how much certain shows are worth to a streaming service in terms of monetary value – future gold dust for in-the-dark content creators.

While especially the streamers Netflixhave recently become more transparent in looking at data, Wills and Brown are now using data and making use of it.

“We’re on a mission to help content producers get their fair share of SVoD revenue,” Brown said when Deadline caught up with the duo in Soho a few weeks ago. “The margins for a streamer are now enormous. If I were a content producer generating that level of revenue, I would expect a slightly larger share.”

Wills and Brown’s ‘content valuation service’ works by using the ratings data of 20,000 streamer subs from Digital-i and then valuing a program based on its contribution to the streamer’s total subscription revenue and total content spend. When negotiating the price of a future season or purchasing a show, producers, talent or agents can then bring this to the table and provide the streamers with what Brown calls a “cap and collar valuation,” which is essentially two numbers which act as a floor and ceiling for how much a project could be worth.

“We understand that Netflix can generate ‘X amount’ of money from your show, but they have to run a business so you don’t get your full cut,” Brown said. “But we give a producer a reach – you go in with a strive for subscriber value and have a ‘we must not fall below this number’ in your back pocket.”

Ironically, the streamers would have difficulty denying the validity of the data, as many subscribe to Digital-i to “look over the fence at their competitors,” Brown said. Digital-i’s data cards Netflix, Prime VideoDisney and Maxwhile it is an extension to AppleTV+ is scheduled for next year.

Wills and Brown have pitched to indie, talent, media law firms and agencies in recent months, including CAA, Avalon, All3Media and Banijay. They recently completed a valuation estimate for CAA Bridgerton And Queen Charlotte, while using the BBC Peaky blinders, which has been licensed to Netflix for years, proving their worth to producer-distributor Banijay. “We asked if it would be valuable to know how much the streamer made from their show and the answer was ‘yes,’” Brown said.

Notably, Wills and Brown are also advising a company on valuation around the European Union’s Statutory Rights Remuneration Act for 2022, which aims to ensure that intellectual property creators receive fair compensation for their works and are currently being assessed by the streamers is challenged in court.

Subs, engagement, retention

The pair’s formula examines a show’s performance through a three-pronged lens: subscriber acquisition, engagement and retention. This is helped by Digital-i’s data covering the top 20 markets, which comprise 80% of global subs, giving customers a global perspective. “The market is relatively saturated in the US and Britain, so a well-performing show here may not drive subscriber growth but rather strengthen the audience,” Wills said. “But it could also do well elsewhere, for example in Japan or Latin America, where penetration is lower. What initially struck me was how many different ways we can create value in this area.”

Given how The remaining demand for streamers dominated After last year’s twin US labor strike negotiations, the duo notes that now is a good time to try to help the industry win its fair share. “There is a ‘cost-plus’ tradition in this industry to take, say, £1.2 million ($1.6 million) an hour if your show was worth £1 million, but we question that and say: ‘If if a show generates £4 million, then is £1.2 million really the right level?,” Brown said. “Without wanting to sound overly altruistic, it is in everyone’s interest to support grassroots creativity.”

Going forward, Wills and Brown will continue to spread the word about their work. They hope to make the formula smarter so that a number can also be called up that applies to new shows based on similar projects that have done well, though they acknowledge they’re not quite there yet.

“Becoming predictive opens up a chink in the negotiating armor, so we haven’t perfected that yet,” Brown added. “If it’s a recurring series, you can look at older seasons and that makes it pretty black and white, but when you start thinking about new shows, that’s where the streamer can ask questions (the formula).”

As more attention is paid to what could ultimately become a killer formula, the conversation about streamer compensation seems louder than ever.