How Much Does YouTube Affect International Windowing?

/ Dec 18, 2013


The concept of international windowing and distribution — determining who has access to your content and at which intervals — can be a tricky thing to understand. So here’s my attempt at simplifying it: Films and TV shows aren’t monetized only when they first premiere. Studios are consistently finding new ways to make money off of their content by distributing it to new markets and new platforms.

With the rise of digital video distribution platforms like Netflix, Amazon, and iTunes, this practice has become even more complicated, as content owners have to strategize ways to restrict access to people who are getting used to watching their favorite movies and TV shows anytime, anywhere, and on any device. Luckily, platforms like the ones mentioned above are able to block access by geography, making it possible for content owners to create multiple revenue streams in the same territory.

But these platforms primarily focus on traditional formats — films and TV shows. Even Netflix, like linear TV channels, doesn’t own the content it designates as Netflix Originals. For example, “House of Cards” is distributed by Media Rights Capital much in the same way “Breaking Bad” is distributed by Sony Pictures Television.

It’s different with YouTube, which within this context is the premier home for short-form original video programming. It’s the biggest open video platform on the planet, and provides access to a global audience unmatched by anyone else (open or closed).

The accessible nature of YouTube has created a culture among new-media creators of wanting to make their content available to everyone, everywhere. They want to satisfy their audience’s desire to watch what they want at anytime. It’s not a bad thing — not by a longshot — but this change in expectations does create a ripple effect for those who want to build new revenue streams via windowing and distribution.

Vuguru, a digital development and production studio founded by former Disney CEO Michael Eisner, has made a business out of creating digital-first programming, and then monetizing it both through domestic and international windows. “We were one of the first companies to do it,” says Vuguru CEO Larry Tanz. “Myspace paid us to distribute ‘Prom Queen’ in the US, but had to geoblock it elsewhere, which allowed us to sell international rights in a bunch of territories.”

“With YouTube, most of the industry seems to be moving further away from it,” he continues. “YouTube-oriented networks don’t like to geoblock, they want everyone to get it everywhere.”

As Tanz tells it, when Machinima acquired the rights to distribute “Halo 4: Forward Unto Dawn” the network made the series available everywhere. As a result, all international sales for the program had to be second windows. “The show still sold internationally,” he says, “but in my opinion, you can never get as much if the content has already been made available on YouTube in that territory. It was a global first window followed by territory-specific windows. I think you can lose value in doing that.”

There’s also an issue of perceived value, according to Tanz. “In other countries, there is sometimes a perception that if a show is on AOL or Yahoo, that it’s a step above those that are distributed exclusively via YouTube,” he says. “If it ran on Hulu in the US, international players would definitely be interested.” (Vuguru has distributed shows exclusively on AOL, Hulu, and Yahoo.)

This is not to say that shows distributed on YouTube do not have the same production quality as those made for other digital video platforms. Again, it’s all about perception. AOL, Hulu, and Yahoo (in addition to Netflix and Amazon) each have made concerted efforts to paint their original content as something similar to, if not completely like, television. That makes it easier for content owners to find new buyers in other markets. And while these platforms are all testing international windowing in their own way, here are three content providers at the forefront of this practice:


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