Euro coin and creativity make sizable inroads into U.S. market
HOLLYWOOD — Top U.S. program suppliers are headed to the French Riviera for the 19th edition of the TV trade show Mipcom, where for the first time in decades they’ll be on the receiving end of changes sweeping the global business.
It’s been more than 30 years since shows originating in Europe — from “Who Wants to Be a Millionaire?” to “Survivor” and “Big Brother” — have captured the American imagination, reshaping the U.S. network primetime schedules and opening up two-way transatlantic programming traffic.
Not since distribber D.L. Taffner imported Britcom formats that morphed into “All in the Family” and “Sanford and Son” in the ’70s has there been such a fuss over Euro programming concepts.
And the two-way traffic is not just about programming. Euro coin, especially deutsche marks, have poured into Tinseltown over the last year, opening up the likelihood that American films and TV shows will eventually be more international in flavor and storyline as well as in financing.
The import of reality formats culminated over the summer with the unprecedented ratings success of “Survivor” on CBS, while the influx of Euro cash climaxed in the pending takeover of one of Hollywood’s seven major players, Seagram’s Universal, by France’s Vivendi.
“The business is becoming truly global in its financing and in its creativity,” says one international TV veteran.
Twentieth Century Fox Intl. TV exec VP Marion Edwards believes that the global market will benefit long term from the exchange opened up between the U.S. and Europe.
“The flood of Continental-originated reality shows may open other doors, for Euro sitcoms and dramas, to make their way Stateside,” she says.
Edwards also points out that it’s no longer in any case strictly about “them and us”: All of the U.S. majors have financial interests in various Euro broadcast, cable or satellite operations. They also have local production operations in various Euro territories and around-the-clock satellite channels beaming a mix of U.S.- and Euro-originated fare.
“Never has the business been so interconnected,” says one international TV veteran. “What happens on one side of the Atlantic almost inevitably now impacts the other.”
As for how long the love affair with reality programming will last worldwide, most U.S. suppliers — whose most lucrative sales items are feature films and scripted drama series — are confident that the romance will fade within a year or two.
“Look at newsmagazines, they were hot for a while on the U.S. networks and then faded in popularity. These things are cyclical,” says Columbia TriStar Intl. TV president Michael Grindon.
American movies and series — at least those that can qualify as genuine hits — will continue to be sold for top dollar abroad, leading U.S. suppliers concur.
Disney Intl. TV prexy David Hulbert, who is a Brit and based in London, says the TV industry in Europe is very strong and the revenue base, in general, is growing. Pay TV is prospering, local production is healthy and the digital revolution is opening up all kinds of multiplexing possibilities. There is no reason, in other words, why the U.S. majors shouldn’t continue to enjoy healthy revenues from their foreign TV activities, he suggests.
The six major Hollywood studios — Warners, Fox, Viacom, Disney, Sony and Universal — increasingly account for the lion’s share of revenues in the international TV business. In dollar terms that means they will collectively rake in some $4 billion to $4.5 billion this year, more than the rest of the world combined pockets from TV exports.
The Disney Channel in the U.K. will be splitting up into four separate feeds catering to four distinct target audiences — just one indication of how programming can be sliced and diced to create new revenue streams.
“The health of the international market is better than I thought it would be,” agrees Paramount Intl. TV prexy Gary Marenzi, who points to an array of foreign niche channels that now have the money to step up to the plate to buy U.S. shows.
Marenzi points to a shake-out in specialty channels abroad whereby only the healthy survive.
Established hits like “ER” and “The Practice” as well as newer shows like Emmy winner “The West Wing” are being sold or renewed at healthy prices abroad. And despite the fact that station buyers only window-shopped at June’s L.A. Screenings, most Yank suppliers stress that they have considerable interest from multiple station buyers for at least some of the series debuting this fall:
Warner Bros. is banking heavily on its remake of “The Fugitive”; Fox on its James Cameron-produced “Dark Angel” and David E. Kelley’s “Boston Public”; Paramount on its “Titans” and “Level Nine”; U on miniseries “Attila the Hun”; Disney on its “Tarzan” animated series; Columbia on “The Street,” to name just a few titles making their debuts on the Croisette.
Even MGM is finding brighter prospects for its product abroad.
“We don’t have network series, but never have theatrical movies been in such demand,” says MGM Intl. TV VP Simon Sutton.
After years of being hamstrung by outmoded output deals, the Lion has disencumbered its library in most foreign territories and is beginning to see sizable revenue growth.
Of course, the current hold that reality shows have on Euro skeds will not make it easy for U.S. scripted series to get slots. Nor will the fact that the fall season in the U.S. starts so late and so fitfully (what with the triple whammy of the World Series, the Olympics and national elections). Without audience ratings from the States in hand, U.S. suppliers could find it difficult to convince Europe’s top buyers that they should fork out for untested series.
Expect programming sales at the five-day Mipcom market (Oct. 2-6) to be on the soft side.
“I absolutely do think that the late beginning of the U.S. fall season will slow things down in Cannes,” says Grindon.
If sales of individual series are lackluster on the Riviera, top Hollywood execs can fall back on the fact that they still enjoy long-term output deals for their product in half of the top 10 major territories around the world, guaranteeing them regular payments on a year-round basis.
Such deals may come with more strings attached in the future — shorter lengths and various volume caps to protect the Euro client — but as long as the majors have the movies the world wants to see, they will probably not disappear.
Consider Warner. The megaconglom cannot only count on output deals in all the major Euro territories including the fickle British market, but it just inked its richest such agreement in Japan, a notoriously difficult market for U.S. TV shows.
The reason: Soon-to-launch digital channels need ready-made programming.
Dot coms on Croisette
But Mipcom isn’t just about programming. Dot-coms will be dotting the Palais convention center in increasing numbers. And the top U.S. execs will be devoting time to assessing how far convergence has come in Europe and how to take advantage of it.
After all, these Hollywood execs are no longer just simple program sellers: They are responsible for one of the fastest-growing revenue streams at their respective congloms. Part of their jobs is to assess developments on the global scene and seize on the opportunities presented.
“On everyone’s agenda,” says Warner Bros. Intl. TV prexy Jeffrey Schlesinger, “is how to enter the digital space in a protected way.”
We need, he continues, a digital-rights management system put into place so that existing programming windows are not jeopardized while new revenues streams like VOD are being developed.
Schlesinger is bullish about the growth of pay-per-view and video-on-demand in Europe, especially right now in the U.K., but he also believes that there are going to be many people around the world who won’t be part of the interactive environment for years to come. They too will have to continue to be served.
He thinks that the companies to watch in Europe in the next couple of years are ones that are barely on the showbiz radar at the moment, and certainly not yet visible at Mipcom. They are the various utility companies that are beginning to set up their own virtual cable companies, and will be distributing, buying and/or creating their own programming.