U.s. Action Pack Feels Int'l Heat

As they arrive for this year's MIP-TV market, U.S. industry leaders fear the honeymoon is over for America's big-budget, first-run action hours in the European marketplace.

Growing numbers of quality dramas and action hours being made in Europe for local consumption are exacting a heavy toll on U.S. product.

"People want to watch shows in their own language," Atlantis Films president Peter Sussman said. "There was a honeymoon period where America could take advantage of enormous growth (of broadcast outlets) in Europe. But now I believe that our ability to rely on the international market to relieve margins is going to erode, and that scares me."

"Our customers are getting better at producing local product in the local language, and we recognize that we have to develop a strategy to get into that business if we are to continue to be a leading international purveyor and full-service distributor," said Gary Marenzi, president of Paramount International Television.

"There is so much production, both local and international, being done at this point that the competition is fierce and there are only so many slots available," said Marion Edwards, executive vp of 20th Century Fox International Television.

"The European marketplace has now matured to a level where it can better take care of itself and not have to rely on American programming," said Sussman, whose company is partnered on such high-profile shows as "Gene Roddenberry's Earth: Final Conflict" and "NightMan," both with Tribune Entertainment Co., and with All American on the recently canceled "The Adventures of Sinbad."

The trend toward better-quality local production, often using American expertise, prompted the current move by Hollywood studios into global TV production partnerships in order to make programming for local consumption in foreign markets.

"It's absolutely essential to become involved in production partnerships (with foreign entities)," Marenzi said, "and anybody who thinks they can just produce product primarily for the U.S. market and just export it overseas is sorely mistaken."

"Obviously, this trend is one of the reasons we want to go into international co-production," added Marenzi, who is leading his team in a big push for more overseas involvement. "It's a long-term strategy, but if you want to develop relationships (abroad) for co-productions, you can't do it overnight."

Columbia and Fox are also going full steam ahead in pursuit of partnerships to create programming for the foreign markets.

But while the studios continue to gear up for more foreign production activity for local markets, Atlantis' Sussman fears the ground has already been taken out from under much of the American one-hour product that depends on foreign territories for up to 70% of their budgets. "We are in the middle of a difficult trend that is squeezing the margins in our business," he said.

Hardest hit will be the first-run hours, he said. "Network shows will survive because they are like the best seller in the bookstore that gets the exposure. They will survive, but it does not augur well for first-run."

Sussman said his company will be focusing more on network programming in the future as a result of the trend. "If the networks are going to be the best sellers, then this is where we want to be."

The rise of home-grown one-hour series in Europe has already replaced U.S. product in primetime on virtually every broadcast schedule.

"The Europeans are able to produce something that looks American but is not American," said Heinz Lehmann, head of CLT-UFA International, which co-produces, co-finances and acquires programming for CLT-UFA's chain of European broadcasters, including the largest, RTL. "We learned from our friends in the States for years. Now it's a kind of kickback. We learned how the shows were supposed to look, but we added the German or local element."

"Three or four years ago, we had to face the problem that the Americans were making fewer one-hour formats and more sitcoms, which we can't use here," RTL chief Helmut Thoma said in a recent interview. "We discovered that German programming was more attractive to viewers than American shows, so we started making our own shows. And we made them specifically for a young audience -- series like 'Cobra 11' and 'SK Babies' -- and discovered that they are as popular as movies."

German action programming is a major part of giant BetaFilm's product offering at MIP-TV with such productions as "Rex, a Cop's Best Friend" and the high-tech series "Helicops," which is heavy on stunts and special effects.

"Our highest ratings are with French cop series," echoed Ronald Blunden, director of corporate communications for TF1, France's leading broadcaster. " 'Navarro' (a 90-minute cop show on TF1) with Roger Hanin on TF1 regularly pulls in audience shares in excess of 40%, amounting to just shy of 10 million viewers."

By comparison, broadcaster France 2 ran 'ER' on Sunday nights and got 25%-30% shares, which is a hit -- but still nowhere near the French-made series.

"I think it's a bit strong to suggest that the bubble is bursting," argued Michael Grindon, president of Columbia TriStar International Television. "There was a large quantity of one hour (first-run series) that went into the market two years ago, and the quality of all of them was probably not what was promised. But many American programs like (Universal's) 'Hercules' and 'Xena' are working well and remain in terrific demand around the world. There is also terrific demand for our one-hour show 'VIP.' " That first-run action show starring Pamela Anderson is being introduced to foreign buyers for the first time at MIP-TV.

"When you look at primetime (in foreign territories), you could say that local product is more important," Grindon added, "but with the variety of channels available now, there is still a huge demand for quality programming. There is obviously much less demand when the quality is less consistent."

Fox's Edwards concurred. "For years, people have been asking me when American product was going to stop selling outside of the U.S. because it is challenged by local production. My only response has been that good product will always sell and that has been true since I started in this business 20 years ago. I don't think that the quality of the American network hour has yet been equaled."

Eric Hansen in Berlin contributed to this report.