Erik Jensen, Managing Partner at CDC United Network, shares his thoughts on how the current pandemic will affect the business and future of the entertainment industry, and how his company is navigating this new reality by strengthening its relationship with its clients and partners.

As millions of people around the world are confined to their homes due to the quarantine measures taken by most countries, schedules and routines around work and daily life have changed, and for the team at CDC United Network, it’s been no different.

In these times of uncertainty, rather than trying to push deals and expanding its business per se, the distributor has made it a priority to connect with its friends and partners, and help out as much as possible.

“We’re trying to stay in touch with everyone. Feeling things out. Not trying to close deals aggressively necessarily, but rather trying to find out how people are doing, how things are going, what the concerns are. It’s a different time now, we all have different priorities,” Erik Jensen, Managing Partner at CDC United Network, said to ttvnews.

CDC is one of the lucky companies that has been able to keep all of its employees on board, something the executive is grateful about.

“We are doing OK. I feel very privileged. We realize how lucky we are so we’ve also actively been contributing to different causes,” he said. The company has been donating money to charities such as the LA Regional Food Bank, as well as an organization in Europe which feeds the homeless and those less fortunate.

“I think it’s important. If you’re privileged and not being hurt by this as much as others, I think it’s important to pay back or to pay forward,” he added.

A new Era for the Entertainment Industry

When keeping in touch with its clients, the company has been “trying to evaluate what their needs are at the moment,” because this crisis has forced almost every industry to re-evaluate their business models and commercial strategies.

“I think everything is going to be affected by this coronavirus, that’s for sure,” he said. “Especially the companies that rely on advertising dollars, they’re suffering. And it’s a strange dichotomy because the viewership is up significantly, but the ad dollars are not. It’s a shame that the great ratings that everyone is getting, they can’t pull in the ad dollars. And that’s going to take a while to recover.”

So, as entertainment continues to move almost exclusively inside the home -at least for the next few months-, the industry as a whole is forced to adapt.

“I think it’s accelerating the shift away from the advertising model and the linear model. Most corporations, big companies, cable and station owners who were already moving away, or having parallel SVOD services, catch-up services, and putting emphasis and focus on that, were doing so with a longer-term roll out in mind. But I think with what’s happening now, that’s going to be accelerated,” the executive predicted.

The rise -and fall?- of the SVOD

So, while a part of CDC United Network’s business has been affected -the closing of movie theaters has impacted the theatrical release of its movies-, another side, the SVOD side, has increased notably.

“Theatrical is a big part of our business. There’s movies that we’ve had to pull off the schedule. There’s movies like The Gentleman, which was released just in time before all this happened and it was a big success throughout Latin America, except for Brazil. But there’s two or three other movies that we had to pull off the schedule as well that we had planned to release, so we’re trying to see where we’re going to place them”, he said.

“But on the flip side, we’re doing a lot of business with the SVOD services. They need a lot of products. So that is what’s mainly been keeping me busy. A lot of deals with SVOD services, partners that are launching SVOD services or parallel SVOD services, that have accelerated their process. Because the viewership is clearly up, that’s for sure”, he added.

And when it comes to this increase in viewership, for some streaming services, it’s been as much as 100% increases in a matter of weeks.

“I think for the SVOD services it’s been a boom. Undoubtedly, for sure,” he said. “We see the numbers and for some services it’s literally 100% increase from one week to three weeks later. Or from one month to one month. For them it’s a boom, it’s great”.

Yet, while an increase in subscriptions and viewership is certainly a win for these services, it does have its downside, as the executive explained. “There’s big companies like Netflix with major catalogs, but for these services who are just launching and don’t have that much on their catalog, or don’t have that much deep original programming, the concern is ‘are people going to watch all of it now and two months from now they’ve seen everything and then they’ll unsubscribe?’, Now suddenly the SVOD services are with empty shelves and no subscribers?’,” he explained.

“They’re almost consuming too much for these services that don’t have a lot of products. I think that for the most established players that have been there for a while and have a lot of products, it’s great; but for the platforms that just launched and have a limited number of original productions, people will get through that quite quickly,” he added.

To help provide the industry with content, CDC is actively acquiring titles and trying to overcome the challenges associated with doing so at this time.

“We are always buying. But one of the issues that we’ve been having is the dubbing houses are all shut down. Normally as soon as we buy movies we dub them right away, so all of our catalog is dubbed and subtitled in Portuguese and Spanish, so the titles that we already have, we’re ready to deliver. But we definitely are buying new titles, a lot of them straight to SVOD or to pay TV type titles. But we can’t necessarily deliver them right away to our clients because the dubbing houses are closed,” he said.

“I think they’re starting to figure ways around it to get that going again. Because if it does continue to go on like this, which I think it will, some services are going to continue to get low on titles. They’re going to need original titles to refresh and have new product. We will be happy to be there for them to give them that product, so we definitely continue to buy.”

The distributor has recently closed deals with big players such as Amazon and Netflix -which will be premiering The Gentlemen in Latin America -outside Brazil- in May, and a few others with big cable networks, which allows it to navigate this uncertain time with a more laid back approach.

“It’s too much uncertainty now for a lot of these services to be able to be making acquisitions, programming or planning decisions. Everyone’s still figuring it out. We are reactively working and not necessarily proactively all that much trying to chase business. Mainly staying in touch with our partners and clients, and feeling what’s going on,” he concluded.