Armoza’s New Challenges
This summer, Armoza Formats officially became part of the global operations of ITV Studios. The Israeli company was one of the few independent international format creators and distributors left on a market dominated by global giants like ITV, Banijay, Fremantle, Endemol Shine and the likes.
Stanislav Kimchev called his old friend Avi Armoza to talk about the future of the company and its business as part of the British powerhouse. The CEO explained the rationale behind the partnership with ITV Studios and also touched upon the new challenges which the format industry is facing now amid the ongoing market consolidation and the upcoming domination of the streaming players.
The Four Brazil
Avi, until recently Armoza Formats was one of the few independent content creators and distributors. Why did you decide to sell the company?
My role as the CEO of the company is to look to the future and to work out the best possible ways for the company. The industry has been, I think, at a very big junction and in a very deep process of change in many aspects. For example, there are new players like the streamers, and they don’t buy formats, they buy productions, full shows. So logically, we understood that we need to get into productions. We had three possibilities: to create our own productions in different major territories; to do it stage by stage, through local partnerships (something that we had started in France with Thierry Lachkar); and the third option was to do it through M&A with a major group that already has a substantial amount of production companies. We feel that by teaming up with ITV Studios, who have more than 55 production companies, we managed to achieve the goal of having production possibilities at the push of the button.
Will anything else change in your company besides being part of ITV Studios?
As you have seen, there are changes ahead, which we are working on within the group and we will know more about soon. Our main perspective though is that the world of television is going through a massive consolidation and in order to meet the challenges of this new era we needed to be part of a bigger group. This move has given us a better base to meet these challenges. The question was not about whether to sell the company, the question was about finding the right partners to meet the new challenges of the TV industry.
Let’s get back to the beginning. You launched the company back in 2005 and started selling formats from Israel first. You are the person who put Israel on the TV map. What attracted you to the formats business?
I was a producer in Israel. It is a small and limited market with a limited number of channels. I felt that within this market there is much more creativity than the local market can absorb and I saw an opportunity to take Israeli creativity to many more markets and explore them in this way. Originally, I had intended to do it also with film, but after testing it, I saw that the best potential existed in the formats market, because with formats you have no language limitation, and also fewer cultural limitations because you enable different cultures to do local adaptations. So, I saw that the format business offers great potential for Israeli creativity to be exported by selling formats.
How tough was it to start from scratch? Do you still remember your first deal and when did you land your first major breakthru?
You know, there were different stages. I think the beauty of the business when you are a pioneer, is in the way you develop and grow. For the first two markets I went on my own and just took a table at the Israeli stand. After that I started to bring other people. So, we were growing very gradually, going for bigger and bigger stands.
Of course, I remember the first deal. This was an example of the beauty of the format industry, because our first deal was The Package in Greece, our first license deal. This deal actually lasted until this year with 14 1 seasons of the show in Greece. This shows the potential of the format industry - a deal that you made many years ago can get renewed year after year.
Another target we had was to reach to English speaking countries and we did this by selling The Bubble to the BBC. It was one of our big breakthrus into the global industry. Still Standing was also a major breakthru, as it was our first deal with a US network - NBC - and in addition has become the most successful Israeli format with more than 6.000 episodes around the world in 20 different countries. And I Can Do That!, which was the first primetime entertainment show we created, was the first one which was able to become like a leading best-selling format within a very short period of time.
What changed on the market during those 15 years?
We were the first ones from Israel and we held that position for about six years. Only when we proved there was a business model, other players came in and because Israel is a very competitive society, I think that the entrance of new forces into this market created a strong competition. This competition was pushing the whole industry forward. So, from a single company business, it became a multi company business - very competitive. And this competition enabled the industry to push forward and to many successes.
I think a lot has changed in the industry as a whole and a lot is still changing. I think there was quite a messy process of consolidation. There was first the consolidation within the production groups – Endemol Shine, Banijay and Zodiak, and so on. The level of competition was reduced and now you have fewer clients and less competition.
What are the key challenges now for your business? How do you see them?
I think for us, as a company, the key challenge is to maintain the same level of creativity and the same level of success within a global group. I think that our job and role is to study the new platforms and the new possibilities. We need to keep developing and coming up with new ideas, new creative shows; to keep the creative DNA of the company, and the brand that we built alive, but within a global operation.
You represent over a hundred formats from various genres. What have been the biggest hits? You mentioned some of those, but what also are your personal favorites among them?
Oh, it’s difficult to pick a favorite. I can measure them by success. We’ve had different success in different genres. If we look into scripted, we have Hostages which was sold to over 10 countries, including to the BBC, and is now available worldwide on Netflix. It was one of the first Israeli dramas that was sold in the Hebrew language to so many territories. On the gameshow stage, it was Still Standing, which is now the most successful Israeli format and was recently selected by K7 as a “new powerhouse format” and is the only gameshow on that list. On the factual side we have Connected, which brought a new language of storytelling into the factual space. It was also award-winning and created a real difference within the international market. On the entertainment space, there is I Can Do That! which was adapted in 25 countries and our latest success was launching The Four, which was able to compete in the very saturated market of primetime entertainment shows in the US.
What will be your highlights for this year’s MIPCOM?
We are bringing a very strong slate of four different shows, coming also from different territories. There will be our own creation Queens of Love, where three drag queens consult and lead the dating process of single people, giving a fresh, humorous take on the dating scene. We’re bringing another different dating show, which is called Single Parents Cruising, coming from French Canada, which is about helping single people with kids to find love through including the whole family - it’s a date between families, not a date between singles, which is a unique perspective. We are bringing the new singing show Song of My Life, which is very emotional and was already very successful in Finland where it won the primetime slot. And we are bringing a new comedy show, called I’ve Got Issues.
You work in a very competitive environment, both in Israel and internationally. What is your opinion, is it more important now to develop own formats than to pick up IP for distribution?
I think, like in any business, it’s a question of creating the right balance. I think that you need to have independence capability and sometimes, whenever it is possible, you can balance it, you should be open to creativity from around the world. You should be open to creative dialogue with the other territories and with other creative companies.
People from the industry say it’s the Golden Age of Television, mainly because of the series boom. Does that mean that the age of big international formats is over or not?
No, I don’t think that it’s over. I think it’s becoming more challenging. I think at the end of the day, we are as good as our creativity. It is a creative competition, it is a creative fight and if you are able to maintain your creative edge, you will always have a word in the international industry.
How about the effect of the digital and streaming age? What does it mean for television? Are TV ratings still relevant?
I think TV will always be relevant, I don’t think it’s a substitution market. I think it’s a complementing market. There will still be the audience that comes in and switches the television on to see the programming that somebody else chooses for them. But there will also be the people who would like to get on demand with streaming. This will still be a market where content will win. We’ll just have more platforms and more competition, but I think television will always have a place.
You have built a reputation as one of the few people who talk openly about the problems of the Israeli TV market. What is happening now there and what do you expect to change in the coming years?
I think my philosophy is valid to the Israeli market and to the international market. I think it’s very important for each market to have a pluralistic environment, based on both commercial pluralism and creative pluralism, so that as many creative people around the world and around the country can be involved in the system. I have been pushing for it on the local market and I think it’s relevant to any industry that wants to maintain the success in the long term.
My role as the CEO of the company is to look to the future and to work out the best possible ways for the company. The industry has been, I think, at a very big junction and in a very deep process of change in many aspects. For example, there are new players like the streamers, and they don’t buy formats, they buy productions, full shows. So logically, we understood that we need to get into productions. We had three possibilities: to create our own productions in different major territories; to do it stage by stage, through local partnerships (something that we had started in France with Thierry Lachkar); and the third option was to do it through M&A with a major group that already has a substantial amount of production companies. We feel that by teaming up with ITV Studios, who have more than 55 production companies, we managed to achieve the goal of having production possibilities at the push of the button.
Will anything else change in your company besides being part of ITV Studios?
As you have seen, there are changes ahead, which we are working on within the group and we will know more about soon. Our main perspective though is that the world of television is going through a massive consolidation and in order to meet the challenges of this new era we needed to be part of a bigger group. This move has given us a better base to meet these challenges. The question was not about whether to sell the company, the question was about finding the right partners to meet the new challenges of the TV industry.
Let’s get back to the beginning. You launched the company back in 2005 and started selling formats from Israel first. You are the person who put Israel on the TV map. What attracted you to the formats business?
I was a producer in Israel. It is a small and limited market with a limited number of channels. I felt that within this market there is much more creativity than the local market can absorb and I saw an opportunity to take Israeli creativity to many more markets and explore them in this way. Originally, I had intended to do it also with film, but after testing it, I saw that the best potential existed in the formats market, because with formats you have no language limitation, and also fewer cultural limitations because you enable different cultures to do local adaptations. So, I saw that the format business offers great potential for Israeli creativity to be exported by selling formats.
How tough was it to start from scratch? Do you still remember your first deal and when did you land your first major breakthru?
You know, there were different stages. I think the beauty of the business when you are a pioneer, is in the way you develop and grow. For the first two markets I went on my own and just took a table at the Israeli stand. After that I started to bring other people. So, we were growing very gradually, going for bigger and bigger stands.
Of course, I remember the first deal. This was an example of the beauty of the format industry, because our first deal was The Package in Greece, our first license deal. This deal actually lasted until this year with 14 1 seasons of the show in Greece. This shows the potential of the format industry - a deal that you made many years ago can get renewed year after year.
Another target we had was to reach to English speaking countries and we did this by selling The Bubble to the BBC. It was one of our big breakthrus into the global industry. Still Standing was also a major breakthru, as it was our first deal with a US network - NBC - and in addition has become the most successful Israeli format with more than 6.000 episodes around the world in 20 different countries. And I Can Do That!, which was the first primetime entertainment show we created, was the first one which was able to become like a leading best-selling format within a very short period of time.
What changed on the market during those 15 years?
We were the first ones from Israel and we held that position for about six years. Only when we proved there was a business model, other players came in and because Israel is a very competitive society, I think that the entrance of new forces into this market created a strong competition. This competition was pushing the whole industry forward. So, from a single company business, it became a multi company business - very competitive. And this competition enabled the industry to push forward and to many successes.
I think a lot has changed in the industry as a whole and a lot is still changing. I think there was quite a messy process of consolidation. There was first the consolidation within the production groups – Endemol Shine, Banijay and Zodiak, and so on. The level of competition was reduced and now you have fewer clients and less competition.
What are the key challenges now for your business? How do you see them?
I think for us, as a company, the key challenge is to maintain the same level of creativity and the same level of success within a global group. I think that our job and role is to study the new platforms and the new possibilities. We need to keep developing and coming up with new ideas, new creative shows; to keep the creative DNA of the company, and the brand that we built alive, but within a global operation.
Queens of Love
You represent over a hundred formats from various genres. What have been the biggest hits? You mentioned some of those, but what also are your personal favorites among them?
Oh, it’s difficult to pick a favorite. I can measure them by success. We’ve had different success in different genres. If we look into scripted, we have Hostages which was sold to over 10 countries, including to the BBC, and is now available worldwide on Netflix. It was one of the first Israeli dramas that was sold in the Hebrew language to so many territories. On the gameshow stage, it was Still Standing, which is now the most successful Israeli format and was recently selected by K7 as a “new powerhouse format” and is the only gameshow on that list. On the factual side we have Connected, which brought a new language of storytelling into the factual space. It was also award-winning and created a real difference within the international market. On the entertainment space, there is I Can Do That! which was adapted in 25 countries and our latest success was launching The Four, which was able to compete in the very saturated market of primetime entertainment shows in the US.
What will be your highlights for this year’s MIPCOM?
We are bringing a very strong slate of four different shows, coming also from different territories. There will be our own creation Queens of Love, where three drag queens consult and lead the dating process of single people, giving a fresh, humorous take on the dating scene. We’re bringing another different dating show, which is called Single Parents Cruising, coming from French Canada, which is about helping single people with kids to find love through including the whole family - it’s a date between families, not a date between singles, which is a unique perspective. We are bringing the new singing show Song of My Life, which is very emotional and was already very successful in Finland where it won the primetime slot. And we are bringing a new comedy show, called I’ve Got Issues.
You work in a very competitive environment, both in Israel and internationally. What is your opinion, is it more important now to develop own formats than to pick up IP for distribution?
I think, like in any business, it’s a question of creating the right balance. I think that you need to have independence capability and sometimes, whenever it is possible, you can balance it, you should be open to creativity from around the world. You should be open to creative dialogue with the other territories and with other creative companies.
People from the industry say it’s the Golden Age of Television, mainly because of the series boom. Does that mean that the age of big international formats is over or not?
No, I don’t think that it’s over. I think it’s becoming more challenging. I think at the end of the day, we are as good as our creativity. It is a creative competition, it is a creative fight and if you are able to maintain your creative edge, you will always have a word in the international industry.
How about the effect of the digital and streaming age? What does it mean for television? Are TV ratings still relevant?
I think TV will always be relevant, I don’t think it’s a substitution market. I think it’s a complementing market. There will still be the audience that comes in and switches the television on to see the programming that somebody else chooses for them. But there will also be the people who would like to get on demand with streaming. This will still be a market where content will win. We’ll just have more platforms and more competition, but I think television will always have a place.
You have built a reputation as one of the few people who talk openly about the problems of the Israeli TV market. What is happening now there and what do you expect to change in the coming years?
I think my philosophy is valid to the Israeli market and to the international market. I think it’s very important for each market to have a pluralistic environment, based on both commercial pluralism and creative pluralism, so that as many creative people around the world and around the country can be involved in the system. I have been pushing for it on the local market and I think it’s relevant to any industry that wants to maintain the success in the long term.
