Majors moving into key Euro territories with co-financed prod'n efforts

U.S. program suppliers are trekking to this week’s Mip TV trade show in Cannes with a new mandate.

Aside from selling shows and launching channels abroad, the majors are trying something particularly tricky and time-consuming: They’re undertaking local production co-ventures in key Euro territories. Idea is to partner with local producers to make sitcoms in German, talkshows in French, TV movies in Italian, and the like. If the shows are successful in their home markets, the studios will share in the revenue.

Sony, Universal and Paramount have all recently hired or promoted execs to oversee these efforts at local production.

Execs like Universal’s Ned Nalle, Columbia’s Ludwig zu Salm and Paramount’s James Dowaliby will hit the Croisette in Cannes Friday to talk up their companies’ scripts and story concepts with potential partners in Europe. This granddaddy of international TV bazaars, now in its 35th year, runs April 3-8.

Nalle, the recently promoted president of worldwide TV production at Universal, explains the rationale: “We’re redeploying our resources and exporting our expertise to work with broadcasters worldwide,” he told Daily Variety.

He points to U’s current success with a local talkshow strip co-produced in Britain called “Vanessa,” and hinted that TV movies in local Euro lingos are not far behind.

Exec in place

Accelerating its commitment to original-language programming in key markets around the world, Sony recently upped zu Salm to president of production for Europe. With local sitcoms already running in Germany, he will now spearhead the building of Sony production entities in Spain and in Italy.

Warners, Disney and Fox are also increasingly involved with funding local shows and movies, either for playoff back in the States or to feed their international channels.

Warners Bros. senior VP of international TV production Cathy Malatesta is working with foreign partners on a variety of projects. The latest is a TV movie made with Germany’s UFA, called “Disaster at the Mall.”

Global offices

Disney’s impressive network of 16 offices worldwide turns out more than 235 hours of children’s programming a year for its localized Disney Channel offshoots. Fox, too, is engaged in local production in the U.K., Australia and other territories where parent company News Corp. operates satellite channels.

“Why are we doing all this?” asks Paramount Intl. TV president Gary Marenzi. “Because we’re a global entertainment company, not just a Hollywood studio.”

Marenzi continues: “As a global player, we must also transition into being a local and regional force. We’ve got concepts and scripts that we’ll be taking out to potential partners in key territories.”

Prime problem

Another reason the Americans are doing “all this” is because U.S. series — even the top-tier ones — are losing ratings ground vs. major broadcasters abroad. They’re no longer programmed in primetime, and hence are destined long-term not to command huge dollars from those foreign station buyers.

Since local shows and local production is the name of the game these days in Europe, the Americans have decided to get in on the act.

Italy’s Riccardo Tozzi, the head of production for Silvio Berlusconi’s Mediaset TV operations, describes the shift best: “This is the first year both Europeans and Americans are going to Mip fully aware that the situation has changed.”

“The Europeans are looking foremost for Euro product or for production alliances, and the Americans are being forced to sit up and take notice,” Tozzi adds.

RAI on a roll

Consider the TV scene in Italy: Local production investment has risen to more than $110 million annually at pubcaster RAI — an estimated 80% hike on previous years. And Tozzi’s Mediaset will this year spend $126 million, a major turnaround from a few years back.

A similar shift toward local production is taking place or is well under way in all the key European territories.

Aside from this new co-production push, American suppliers will once again play the lead role in the more traditional program sales and channel development arenas at Mip.

Latest stats indicate that U.S. companies account for some 20% of total stand-takers at the six-day Riviera rendezvous.

Overall, more than 1,078 companies will display their product for the 3,000 acquisition execs who are tipped to attend, up 10% over last year’s record attendance.

$3.5 bil rev stream

Sales of American movies and TV shows to foreign TV outlets, both free-to-air and, increasingly, pay, are now lining the pockets of U.S. suppliers with some $3.5 billion a year.

Single top-tier items are still commanding stunning sums; B product is getting modest-to-decent prices on start-up services; the dross is being passed over altogether.

Blockbusters like Universal’s “Jurassic Park: The Lost World” and Fox’s “Titanic” could chalk up as much as $100 million each in revenues from sales to foreign broadcasters.

And the bargaining for such hot-ticket items is starting earlier than ever before.

Twentieth Century Fox Intl. exec VP Marion Edwards says she’s already fielding offers for “Titanic” — even though the Oscar-winning pic isn’t available to air on free TV abroad for several years.

Hit coin

Similarly, sources hazard that hit TV series like Warners’ “ER” and Fox’s “The X-Files” may be close to raking in an impressive $1 million an episode in revs from foreign.

And because of outlets popping up all over the map, TV movies and miniseries as well as animation are also enjoying buoyant demand, with top made-fors trawling $2.5 million from foreign, once all windows have been exploited.

And an impressive 175 producer/distribbers, many of them American, are showing up in Cannes early to screen factual fare in the first-ever MipDoc (April 1-2).

Veterans of the international biz point to the considerable investments made by U.S. companies in foreign media entities — some $5 billion over the last five years, one source calculated — as a stunning indication of the faith that American players have in growth prospects for media abroad.

Most indicative of the newfound collaborative spirit between U.S. and European players is perhaps the recent $650 million fact pact between the Discovery Channel and Britain’s BBC. The two partners will both co-produce product and launch channels in a number of different territories.

Torrid territories

As for particularly hot territories at this week’s Mip, Warners Bros. Intl. TV president Jeffrey Schlesinger ticks off Eastern Europe, Russia and South Africa as regions currently in growth mode.

The latter, he points out, perhaps the last largely English-speaking market without commercial television, is on the verge of granting its first private license.

(David Rooney in Rome contributed to this story.)

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