[dipl] Perustieteiden korkeakoulu / SCI

Permanent URI for this collectionhttps://aaltodoc.aalto.fi/handle/123456789/21

Browse

Browsing [dipl] Perustieteiden korkeakoulu / SCI by Degree programme/Major subject "Business & Organisational Design"

Filter results by typing the first few letters
Now showing 1 - 1 of 1
  • Valuing Finnish feature film digital and broadcasting rights
    (2021-06-15) Kokkola, Robert
     Perustieteiden korkeakoulu | Master's thesis
    Video-on-demand services, especially subscription-based (SVOD), have become increasingly significant for films. The effect is amplified for film financing, as the lucrative physical sell-through of films has withered. Finnish producers, who have never been profitable without subsidies, are squeezed. However, the valuation of showing rights, especially SVOD, has been opaque. The thesis seeks to clarify the valuation in these industry changes, how producers could be better off, and contribute to the research on the subject as suggested by Ku ̈bler et al. (2020). From interviews with the representatives of 14 Nordic stakeholder organisations and archive data, we found that SVOD-platforms calculate the worth of individual works by allocating subscriber fees to the shows subscribers have watched, while also calculating the sales effect of each work by assuming that the works a new user watches first drove the subscription decision. However, as these showing rights are mostly sold early as part of financing in Finland, the sales price is the result of negotiations by industry experts, who judge the potential of the not yet made film using data, trust to key personnel, and intuition. The pricing is stepwise due to the film’s financing needs and could be above the perceived value if it fosters a strategic relationship with the production team. The key target is the same as with the box office or linear TV: high viewership. We believe that the results are in discord with the financial theory, as an SVOD service’s revenues are not linearly connected to a high viewership of a single portfolio constituent. We suggest that the valuation methods the platforms use are misleading regarding retention effects, though acknowledge that social effects and the importance of gaining new subscribers may offset these issues. We suggest further research into capturing the portfolio and retention effects of a subscription entertainment bundle.