Europe is struggling with the currency crisis. Economies in Greece, Italy, Spain, Portugal and Ireland are reeling from massive deficits. But despite the turmoil, U.S. brands continue to launch pay channels on the continent and repackage existing ones.
“If you look at aggregate figures, TV subscriber numbers are not declining,” says Bruce Tuchman, the former MGM and MTV executive who took over as prexy of AMC/Sundance’s global channel business last fall. “My only regret is that had there not been an economic crisis, growth would have been stronger.”
Sundance is a late comer to the European channel biz. It bowed its brand in Europe two years ago and is still to launch sister channel, WE tv, outside Asia. Its strategy involves securing distribution deals with cable and broadband operators in some of the smaller, less hyper-competitive European markets such as France, Spain and Benelux.
The web provides a mix of high-end shows, most notably “Mad Men,” alongside independent movies and docus, all delivered by state-of-the-art technology.
“We came to this with no old-school analog legacy in terms of infrastructure,” Tuchman says. “From day one, we were all an all-digital operation.
“But the real point of difference between us and the established incumbents is our non-mainstream content. We have the opportunity to offer something unique that doesn’t revolve around blockbusters. With Sundance, there was a lot of pre-awareness of the brand.”
It remains to be seen if Sundance will eventually target a big market like the U.K., where securing distribution is costly and not easily available.
“It is an issue to find the right distribution deal,” says Tim Westcott, senior TV analyst at IHS Screen Digest.
And not just in the U.K. Disney XD and Disney Junior need broader distribution in France, according to Tricia Wilber, Disney chief marketing officer in Europe, the Middle East and Africa.
“Platforms like BSkyB in the U.K., Canal Sat in France and Sky Italia have a fairly full complement of channels, and most genres are well covered,” Westcott says. “If you bring a new channel to one of these providers, you have to offer something completely new and distinctive.”
Sony Pictures Television Networks recently announced it would launch its second branded channel in the U.K. The Sony Movie Channel will bow this spring, joining female-skewed Sony Entertainment Television, rolled out a year ago in Blighty, and Movies4Men and Men&Movies in the U.K.
Sony operates channels in all the biggest Western European markets, including Italy and Germany, in addition to smaller territories like Austria and Portugal.
“Our European channels business is very robust,” says Eddie Nelson, EMEA senior vice president of networks at Sony Pictures Television. “That is why we are launching and acquiring more channels.”
In terms of multichannel revenues, Blighty remains far and away the biggest market in Europe, worth ?3.3 billion ($4.3 billion), according to IHS Screen Digest.
The next biggest, Italy, generates about $662 million, while Germany is in the third spot at $602 million.
Inevitably, the market is dominated by the U.S. giants.They began building their channel businesses in the 1980s, when cable systems first emerged this side of the Atlantic.
In terms of total number of subscribers throughout Europe, Viacom, owners of MTV, Nickelodeon and Comedy Central, occupies pole position (676.4 million), followed by Discovery (489 million) and the BBC (464.5 million), according to Screen Digest.
Disney is in fifth place measured by total number of subscribers (358.9 million), but second, behind MTV, ranked by channel; the Disney Channel is available in just over 56 million households, calculates Screen Digest.
But even Disney, whose brands are familiar everywhere folk watch TV, needs to adapt to challenging times.
In a downturn, business models have to remain flexible to cope with changing economic climates.
In January, the Disney Channel switched from pay to free-to-air in Turkey; it is also free-to-air in Spain.
But no two European markets are alike. All operators stress the importance of evaluating each territory individually.
A&E Television Networks senior veep of international Sean Cohan, who has overseen the launch of 29 channels in the past six years, expects to bow the Crime and Investigation channel in some new European markets this year, but is mindful of the competitive and economic context.
“In some of these markets, there are 600 channels,” he says. “At the end of the day it is all about content and we are benefiting from a flight towards quality.”
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