Squeezing The Tube Squeezing The Tube / In A Tv Market Constricted By Majors' Output Deals,...

To stay ahead of the global television game, international producers, distributors and broadcasters merely need to build strategic relationships, maximize co-production opportunities, stay cognizant of the niche needs of the digital revolution, adapt to the current Asian financial situation and remember where they left their briefcases. "With new channels and increasingly demanding audiences, program makers have to meet a demand for a great quantity of quality programs -- and MIP-TV is where they will find them," declares Rene Peres, director of the television division of MIP-TV organizer Reed MIDEM.

Many television executives agree that the proliferation of new channels has become less of a threat and more of an opportunity. "As a seller of a 4,000-film library, with an additional 10,000 hours of television programming, plus a host of new series and a full slate of new theatrical films, we see the proliferation of channels in the international marketplace as a goldmine for us," boasts Jim Griffiths, president of international television distribution for MGM Networks.

Increased competition has created many possibilities for software suppliers, enabling them to boost their overall revenues. "Essentially, the business has created a much more complicated marketing opportunity," says Jeffrey Schlesinger, president, Warner Bros. International Television. "You have to use better inventory management and window your programming properly, moving it in and out of free and pay and basic to maximize the potential that is there."

More real estate in the marketplace has created a greater demand for programs. "In addition to the overall need for more pro-duct, this expanded television universe has allowed room for the incubation of niche channels and niche programing," states Bruce Moccia, executive vp, Telescene Film Group. However, this change has brought a new economic model into play, says Moccia. "Since many of the new broadcast and cable entities are not able to purchase costly series and movies, more and more of these outlets are entering into programming partnerships with production companies like Telescene early in the life of a project."

Broadcasters looking to create local product are increasingly considering co-productions as a means to keep costs down. "With local production on the rise, it is important to establish a track record with broadcasters, so they can trust the product and the deal as well," explains Jean-Michel Ciszewski, president of Alliance International Television, who predicts that half his firm's revenue will come from co-productions within two years.

Channel proliferation means more business transactions but also more legal problems and less money per transaction, according to Elfriede Hufnagl, head of sales and purchases for ORF/Austrian Broadcasting Corp. "It is very important to describe the rights that are sold in detail," she cautions. "Channels that cover large areas tend to be a problem. However, niche channels tend to look for specialized programs which can be provided by smaller distributors."

Digital offers a complicated but tantalizing future for producers and distributors. "No one is certain what the implications may be tomorrow for a deal distributors sign today," says Scott Hanock, managing director, Unapix International. "Because these channels now are merging into the digital platform, everyone is looking for something that is above and beyond their normal rights of broadcast, whether it is cable, satellite or terrestrial. We are selling off digital cable, digital pay and digital terrestrial in our package deals, but we have to be concerned about what rights we are actually entering into so it does not come back and haunt us."

Distributors need to effectively manage and control their assets in the rapidly changing TV industry. "Business is going to be tremendous for companies that know how to manage their libraries," believes Bert Cohen, executive vp and COO, Worldvision Enterprises. "These new broadcasters can't afford to spend all of their money on new product, so that gives us an opportunity to be players going into the new millennium with our 20,000-hour library of programming." The growth of digital platforms around the world has been tough on small distributors who don't have libraries to fall back on.

It is much more difficult for smaller distributors to find shelf space today. "Consolidation of companies has created entities that have much stronger negotiating positions," comments Charles Falzon, CEO of Catalyst Entertainment, "but that also makes it difficult for some of the smaller players."

Producers like Children's Television Workshop have more outlets for their programs, but at the same time their audiences are very limited. "Budgets for many new channels are very tight, so the revenue generated from sales to smaller channels is low," declares Baxter Urist, senior vp of product licensing for CTW's international TV group.

Independents are looking for equity partners or government incentives for filming. "Due to the current problems with the Asian market, as well as the stagnant German market, presales are more difficult and these kinds of associations are becoming imperative," asserts Jennifer Peckham, executive vp of Cinequanon Pictures International.

As the bigger players scarf down larger pieces of the pie, MIP-TV becomes an increasingly arduous setting for indies. "You can play on the sidelines, but to get on the main playing field you have to have some pretty substantial resources behind you," says Kurt D'Amico, consultant for Village Roadshow Pictures Television. "A U.S. syndicated budget is probably somewhere between $800,000 to $850,000 per hour, but how many small distributors can come up with that kind of financing?"

So smaller distributors end up selling more specialized programming, where they may not have organized the financing very well. "That is what limits their upside," D'Amico adds. "Even as well-financed a medium-size player as Village Roadshow finds that there are very few slots available, so I really don't know how the small guys do it."

Despite the rise of pay, cable, satellite and digital outlets, terrestrial broadcasters still have areas of primacy. "Free-to-air broadcasters still clearly have the upper hand in Australia, with the best movies, sports, new programs -- both import and domestic -- so the impact on their scheduling from pay/cable has been minimal," claims Errol Sullivan, chief executive of Southern Star Entertainment, the largest Australian-owned independent TV producer.

With co-venturing the biggest buzz of the biz, Ted Riley, president of Atlantis Releasing, sees an increasing trend toward strategic partnerships. "These relationships, designed to provide stability, are occurring on every level -- equity companies, co-financing with projects and on some cooperative levels in distribution."

Companies need to carefully select their niches and co-production partners. "In a reorganized market such as this, if you try to be everywhere too fast, eventually you will fail," says Francois St. Laurent, senior vp, production and business development for Canadian broadcaster TVA International.

"Previously, everyone was looking for a good strategic alliance, but now the product is more at the center of the business."

Slow business at the American Film Market is driving theatrical sellers to MIP in droves, in the view of Richard Lorber, president and CEO of Fox Lorber Associates. With the exception of continued output from the major studios, "the axiom now is that television is driving the film business." Lorber thinks that most international film projects are currently being funded through investment participation or presales with commitments from international broadcasters and media conglomerates. "The days of films being produced on spec and put out to find the highest bidder are fast coming to a close, as more and more, films are being produced with specific uses for television in mind."

With the quality of local production rising in Europe, U.S. MIP-TV distributors are nervous about future overseas sales. "European product is even more attractive to the local audience than it used to be," says Gilles Meunier, executive vp, acquisitions, Canal Plus, D.A. "There are a lot of slots which, in the past, were dedicated to U.S. product and now go to local productions."

"With the rise of independent production sectors around the world, local content is no longer simply a government prerequisite," says Falzon, "but something that broadcasters realize their audiences want to see."

"There is no doubt that the formatting of programs will become more popular," mentions Michael Fenwick, joint CEO of Global Programming Network. "Much of the cost of producing the program is carried by one territory with a small amount of adaptation for other markets. It is easier for a broadcaster to assess whether a proven show would work in his market and formatting helps to reduce the risk he takes when he actually produces the show.

"You really have to stick with universal concepts that play everywhere, versus shows that should perform well in the U.S. and hopefully play well elsewhere," remarks Rob Kenneally, president, creative affairs, Rysher Entertainment. "European markets are now less dependent on our programs and studio packages."

The crisis in Asia is a real concern for many U.S. distributors, who crucially count on the Far East and are hoping the region will recover within a year. "No distributor wants to hear, 'I'm going to have to cancel this deal, so sue me' or 'I need to renegotiate at 50% of the original agreement,'" says Tom Devlin, senior vp, international sales, Hearst Entertainment. "It is very difficult for all parties involved."

Many distributors are taking a wait-and-see approach to dealing with Asia. Satoji Yoshida, executive director, international division of Tokyo Movie Shinsha, believes there will be a great reduction in buyers represented at MIP, especially from the harder-hit countries of Korea, Thailand, Indonesia and the Philippines. "Those buyers who do attend will be quite selective, since their acquisition budgets have been greatly reduced for the time being," he predicts.

"Because of Asia's current crisis, we are now heading more to local productions and reruns of foreign programs to save costs," explains Peter Foo, vp of Malaysia-based Juita-Viden. "Buyers like us will not be actively acquiring at MIP but are attending to update our principals and suppliers on the current economic situation in Asia so that we can seek assistance from them." In this tough economic climate, Foo feels it will be tougher for U.S. companies to sell at MIP if they insist on pre-crash terms and prices. "They will have to reduce their asking price and extend payment terms, license periods and the number of telecasts if they want to continue doing business," he warns. "They may also have to consider accepting local currencies to do business instead of U.S. dollars."

Vincenzo Mosca, head of international sales at RAI Trade, has noticed an increasing trend toward many of the Asian territories buying non-U.S. product. "Due to the economic crisis, many companies were not able to afford the U.S. majors anymore, so they have been buying and dubbing some of our television movies, which are still good but are cheaper," he reports.

"Asia's crisis is temporary," concludes Atlantis' Riley. "The market will bounce back. This is a momentary situation that will be over before we know it. You have to react in that kind of depressed market, but if you overreact you won't produce anything. You just have to assume it will recover."



SIDEBAR: MIP and MIPDOC



The 35th annual MIP-TV market, which runs April 3-8, offers visitors from 90 lands a world of potential profits. At presstime, there were 1,133 exhibiting companies -- up 12.7% over the same period last year. Despite the Asian crisis, Japanese representation at the international TV market will be up a whopping 19.75% over last year. There are also 13.3% more Canadian exhibitors, 8.1% more American companies and 20% more Italian firms. The largest stands at MIP-TV '98 will be occupied by the European Union's Media Program, MGM, Discovery, Warner Bros., Paramount and Pearson/All American.

German TV companies Bavaria, Studio Hamburg, Norddeutscher Rundfunk and Westdeutscher Rundfunk have joined their international TV and video sales forces and will introduce the new German United Distributors entity at this market. Another new initiate is Nordic On Screen, a sales-and-marketing collective stand featuring five major Nordic companies -- DR TV International (Denmark), NRK Aktivum and NFI-Norwegian Film Institute (Norway), SVT Sales-Sveriges Television (Sweden) and SF-Svensk Filmindustri (Sweden).

A full agenda (see page S-20) includes special tributes to the TV industries of Latin America, Australia and Germany. On April 4, MIP-TV, in partnership with Centre National de la Cinematographie, dedicates the day to the French program industry, featuring a conference titled "Television Production: France Opens Up to the World." An April 5 spotlight seminar on the developing Chinese TV industry, organized in collaboration with the Chinese Ministry of Radio, Film and TV, will present market trends, ratings data and evaluations of local production, and the performance of foreign programs.

Mipdoc, the all-new Documentary Program Screenings, runs from the March 31 opening cocktail party at the Martinez Beach through April 2. Two weeks before Mipdoc, 200 production and distribution companies from 56 nations had signed up, as well as 240 registered buyers of documentaries from around the world. The exhibitor figure is a 65% increase over last year's fifth annual Mipcom Junior youth-programming event. To date, Mipdoc providers have entered 1,028 titles -- up 74% over Mipcom Junior -- including series, one-offs and specials. The five most-represented countries at Mipdoc are France, the United States, Canada, the United Kingdom and Germany. During the two-day event, conferences will look at the current state and development of nonfiction programming (see page S-41).

--S. H.



SIDEBAR: The Going Rate/Price ranges for U.S. product in select territories



Animation Half-hour series Hour drama series TV movies Features Documentaries

Africa $500 $1K-5K $2K-8K $5K-10K $20K-80K $1K-4K

Asia (other) $3K-6K $3K-7K $5K-15K $1K-10K $30K-200K $3K-9K

Australia $2K-10K $25K-70K $20K-120K $50K-300K $65K-500K $15K-40K

Canada $5K-20K $10K-45K $15K-130K $50K-110K $150K-500K $5K-25K

Europe (other) $1K-5K $15K-25K $20K-60K $40K-250K $70K-750 $20K-55K

France $30K-65K $20K-40K $30K-100K $30K-150K $400K-800K $8K-30K

Germany $20K-60K $15K-100K $40K-400K $80K-300K $20K-$4mil. $5K-40K

Hong Kong $500-3K $1K-2K $2K-6K $4K-10K $15K-100K $500-$2K

Italy $5K-20K $20K-40K $35K-80K $65K-150K $50K-400K $5K-20K

Japan $2K-20K $1K-4K $10K-60K $40K-150K $40K-1mil. $2K-32K

Latin America $500-4K $6K-39K $10K-85K $30K-150K $100K-500K $3K-40K

Malaysia $350-600 $400-650 $900-1.5K $2K-4K $4K-10K $350-$2K

Middle East $1K-5K $1.5K-5K $3K-15K $8K-27K $20K-110K $1K-7K

Netherlands $2K-5K $3K-5K $35K-180K $3K-5K $35K-180K $3K-5K

Spain $5K-20K $20K-35K $20K-80K $30K-150K $70K-300K $4K-15K

South Africa $1K-5K $3K-5K $5K-8K $5K-25K $100K-130K $2K-6K

South Korea $1K-4K $500-$1K $2K-15K $25K-30K $10K-50K $1K-3K

United Kingdom $20K-35K $10K-50K $60K-150K $40K-250K $150K-5mil. $10K-25K

-- Compiled by Susan Hornik. The figures above fluctuate based on high/low production values, a compelling storyline and a multicultural cast.