Asian Market Paradox

For the great paradox of global broadcasting, take Asia. On the one hand, channels are proliferating in this fastest-growing of economic regions, with revenues generated by those new outlets expected to increase tenfold over the next decade.

Mouth-watering projections were tossed out like hotcakes at a Paul Kagan seminar held in conjunction with the second annual Mip Asia TV trade show (Nov.30-Dec.2). Consider these estimates: There will be 226 million cabled homes in the region generating revenues of $46 billion by the year 2005. That’s up from 60 million multichannel homes currently, which generate only $5 billion.

But despite the arrival of new cable and satellite operators to battle with established national broadcasters, there was no frenzy on the Mip Asia trading floor driving up what are still meager prices for programming.

There was, rather, a bracing sense of the limits of the market – or at least of the distance between things as they are now and what they portend 10 years down the line.

“People are beginning to realize that the Asia Pacific market is still small in terms of the revenues coming back to program suppliers,” said Arturo Dy, president of Cable Boss in the Philippines, the local distributor of a number of U.S. cable channels. Others pointed to the considerable cultural, linguistic and religious differences among the Asian territories, differences that make Europe seem homogeneous – and easy to sell to- by comparison.

Discovery Channel Asia senior VP Kevin-john Mclntyre summed up the problem facing program purveyors in Asia most eloquently: The advertising pie and subscription fees are being sliced ever thinner, reducing the revenues to new channels, which at the same time are under pressure to fork out growing sums to customize and localize their services for individual markets in the region. Inevitable result: A shakeout among newcomer channels to the region.

Despite a reduced body count among Western distributors at this Mip Asia, the organizers at Reed Midem (a division of Variety parent company Reed Elsevier) are firmly wedded to the idea of a third edition – in Hong Kong, with dates confirmed for Dec. 5-7,1996. Reed Midem chairman Xavier Roy said he is confident of the Asian bazaar’s future both as an East-West meeting ground and as an intra-Asian trade event. He pointed proudly to the 625 buyers from 19 Asian countries, of whom 300 had not been to Mip, Mipcom or last year’s Mip Asia.

The supposed absence of the Hollywood majors was deceptive, since MCA, MGM/UA and Sony were happily doing business from the adjoining Grand Hyatt Hotel and execs from other key companies, including Paramount and Turner, were spotted in the corridors.

Against the backdrop of what most attendees termed a modest program sales market, there was a rash of splashy announcements and plenty of talk about strategic alliances being forged in the region.

* Maverick Hong Kong based broadcaster Robert Chua trumpeted the signing of three international partners, including Intl. Family Entertainment, who will stump up $9 million each to help him forge ahead with a “no sex, no violence, no news” entertainment channel beamed into China.

* Hong Kong Telecom boasted of the success of its video-ondemand trials in that territory and will launch the service commercially in July.

* The Discovery Channel announced it soon will go fully digital, allowing it to provide programming in nine languages across 12 Asian territories.

* India was characterized by marketgoers as one of the fastest-growing multichannel markets. Sony and Disney are launching channels there, while companies like indie producer SIE are setting up local production joint ventures.

* MGM/UA is moving up the launch date of its planned spinoff entertainment channel, MGM Gold, to April and is negotiating for carriage in Malaysia, Singapore and Taiwan.

* NBC will launch an entertainment channel in January called NBC Asia and was actively buying locally produced Asian shows to help customize the service for the region.

Despite those concrete developments, China – with its 1.25 billion inhabitants and complicated, overlapping media policies – is clearly the territory Western sellers are most keen to understand and penetrate.

Some suppliers at Mip Asia said they managed to do reasonable business there: Australia’s Southern Star was jubilant over several breakthrough sales in China, albeit at the rate of $2,000 to $3,000 an hour. The going rate was $1,000 an hour just a year ago.

On the other hand, MCA TV Intl. president Colin Davis said his company is holding back from any sizable deals there until license fees either improve or until viable barter arrangements can be worked out.

Saban Intl. president Stan Golden faulted Midem for failing to deliver the promised hefty contingent of bona fide buyers from China. He also beefed about a paucity of buyers from other territories such as India, Thailand and Taiwan.

If China was the chief frustration of many U.S. sellers, some of the Sino broadcasters used the market to sell their own programming to other Asians and even to Westerners. They, along with a robust Japanese contingent, seemed bent on turning Mip Asia into an intra-Asian bazaar.

“China is coming into the world market,” insisted Xu Xiongxiong, general manager of the sales arm of the national broadcaster CCTV. “We came here with two objectives: firstly, to get to know the international broadcasting world, and secondly, to sell our programming.” While not a single deal was signed last year, Xu said his unit inked deals for more than $100,000 this go-round.

In contrast to the naysayers and no-shows, a healthy number of indie suppliers from Europe, the U.S. and Australia were satisfied with the level of business achieved and are signaling their intention to return next year.

Grundy Worldwide exec VP of distribution Jim Henry expected to close the market with sales of around $500,000 – among his deals, one for kidvidder “Mission Top Secret” to China’s CCTV.

Closers

Polygram head of distribution David Ellender was similarly pleased with results, having closed a number of deals with Asians initiated at Mipcom.

One dissatisfied buyer was Gope Samtani of Indonesia’s Rapi Films. “It’s a slow market, too close to Mipcom and Mifed,” both of which he attended. Samtani lamented the absence of several U.S. indies who were at last year’s Mip Asia. He bought only two titles, from New York-based Arrow Films.

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