American TV sellers winging their way this weekend to the French Riviera for Mipcom may be caught between a rock and a hard place.
Their chief broadcast station clients around the world are increasingly disenchanted with American TV shows, while their digital pay TV clients aren’t yet spending the big bucks for imports.
“You’d better come to Cannes with a hit show — or have an ongoing output deal with a key station if you want to keep revenues up,” one veteran U.S. seller said.
“Sobering” is how he describes the foreign landscape as American execs trek to the 14th edition of the fall TV bazaar in Cannes.
The Riviera rendezvous unspools Oct. 5-9 and is expected to attract 10,000 participants from around the world, flat with respect to last year’s record turnout.
Americans will staff the most exhibition stands, 131, with British and French sellers following close behind.
It’s not just the worsening economic news — from Asia, Latin America, Russia, and here and there even in Europe — that has the Americans on edge.
What’s really worrying them is that the international broadcast world is becoming less dependent on and less interested in American TV shows.
Consider this statistic from French researcher Mediametrie: Only 18% of programs aired in Europe last year were American — down drastically from five years ago and particularly glaring in primetime.
Broadcasters in the big countries are making — and increasingly selling — their own shows, and smaller countries are increasingly buying shows from other suppliers — Latin telenovelas, German police series and Australian soaps.
As one veteran U.S. exec put it, “The foreign buyers want ‘Titanic,’ ‘Saving Private Ryan’ and ‘Armageddon,’ but there are only two or three, or at best four U.S. TV series a year that catch on big time abroad.”
Fortunately for now, the Hollywood majors have locked in output deals with key broadcasters in major European territories. That means they get paid regular rights fees for their shows no matter what.
But even these deals, insiders say, are likely to be renegotiated over the next two years with much more flexible terms demanded by the foreign station clients.
“I count myself as extremely lucky,” said Bert Cohen, exec VP and chief operating officer of Worldvision Enterprises, the distrib arm of Spelling Entertainment.
Cohen says the Aaron Spelling brand and the quality of the individual shows he reps — from “Charmed” and “Buddy Faro” to “Love Boat” and “Any Day Now” — are helping to keep sales buoyant despite the practically global economic slump.
Like many of the Hollywood majors, Worldvision also enjoys output deals in two territories that have recently gone sour on U.S. product: Germany and Australia. Most U.S. sellers say it’s beneficial to have an output deal in soft markets and to play the field in more competitive markets.
Another upbeat exhibitor headed to Cannes is NBC Enterprises, the international sales arm of the Peacock web, which is benefiting from a spurt in inhouse production at the network.
NBC Enterprises exec VP Jerry Petry told Daily Variety that the network was bringing a record number of shows to the market, including several high-profile movies like “The Tempest” and minis like the actioner “Atomic Train.”
“We view the current downturn abroad as an opportunity, a chance to get into these newer markets for us and do some business,” Petry said.
Despite the relative optimism of execs like Cohen, Petry and some of their colleagues at the studios, overall U.S. revenues from the sales of feature films and shows to TV outlets abroad are expected to be flat this year.
“If there are any ‘ERs,’ ‘Ally McBeals’ or ‘X-Files’ on the nets’ fall skeds, I haven’t seen them,” said one foreign buyer, pointing out that at most he would buy only one or two shows anyway from the U.S.
Although terrestrial TV buyers are getting ever more picky about U.S. shows, the fledgling digital services abroad are expected to be much more receptive to U.S. product.
“There are a lot more outlets coming onstream,” Warner Bros. TV Intl. president Jeffrey Schlesinger told Daily Variety. He pointed out that downturns in one part of the business — say in terrestrial TV or in one part of the world, say in Asia — can be offset by bursts in another area.
In fact, despite the economic downturn and the general disenchantment with much Yank product, U.S. sellers will rack up some $3.5 billion in 1998 from the sale of TV series and feature films to both free and pay outlets abroad. The proportion of revenues from free TV outlets is roughly 60%; that from pay TV is some 40% and rising.
Various recent projections suggest that the foreign pay TV business as a whole will see revenues ratchet up — some say fivefold; a more prudent view would say threefold — over the next five years.
Suddenly, a number of smaller countries, from Portugal to Poland, are imitating Germany and France by prepping one or more digital platforms.
“The market now is all about the windowing of product — there’s going to be digital terrestrial, digital pay, analogue services, pay-per-view, VOD, as well as free TV,” Universal TV & Networks Group chairman Blair Westlake said.
Westlake is particularly bullish about the prospects for digital terrestrial services abroad, and believes these will enhance the value of libraries belonging to major rights owners like his own studio.