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U.S. cablers plugging into Europe

U.S. cable programmers are looking to the future, which increasingly means casting their gaze toward Europe as the next market ripe for expansion.

Gaylord Broadcasting and Group W Satellite Communications will become the next U.S. cablers to export their programming service across the Atlantic as they start pitching European operators on a new version of their jointly owned Country Music Television music video cable TV service (Daily Variety, Oct. 13).

International Family Entertainment, parent of the Family Channel, is planning a similar launch in the months ahead with aspirations to start a programming service in the United Kingdom and Europe (Daily Variety, Sept. 21).

In an era of recession and reregulation at home, other U.S. cablers will follow, observers say. “With cable reregulation in place, there’s not the great potential for rapid growth we’ve experienced in the past,” said a spokesman at Discovery Communications, which holds a 20% interest in a European version of the Discovery Channel. “European cable is at a similar place as cable was in the U.S. in the late 197Os.”

These statements come amid rumors Discovery wants more in Europe. United Artists Programming Entertainment, a unit of U.S. cable giant Tele-Communications Inc., holds the majority stake in the Discovery Channel–Europe. The spokesman would only say the company “is in discussions about the future of the Discovery Channel in Europe.”

In contrast to the U.S., where cable penetration stands at more than 60%, European cable TV has great growth potential. Paul Kagan Associates estimates that by the end of 1992, 21.5% of all Western European households will have cable TV. It projects that figure will rise to 38% by 2001.

That may make Europe look mighty attractive to U.S. cable programmers, but it would be folly to view Europe as a sure thing, industry pundits say.

Unlike the United States, cable operators in most European nations are not accustomed to paying cable programmers for their programming, said Kagan analyst Robin Flynn. (The United Kingdom, France and Scandinavia are exceptions.)

Unless U.S. cable programmers can convert them to the American way of doing business, these programmers will have to rely solely on advertising revenues as their source of income.

Backers of CMT Europe, as the new country music video cable service will be called, will start pitching the English-language cable-exclusive service to European operators at a European cable convention being held in London Monday through Wednesday.

Unlike the United States, where country music is booming, CMT Europe’s challenge will be to create demand for a showcase for music that is little known.

A few U.S. country acts have toured in Europe, but there are no country-format radio stations in Europe, at least so far.

More contemporary

CMT manager of programming Tracy Storey said CMT Europe will be similar in format to its U.S. counterpart, but the European channel will put greater emphasis on artists “with a more contemporary edge” in its programming mix.

That means singers such as Garth Brooks and Billy Ray Cyrus — country rockers who have brought in legions of new fans to the genre with their more mainstream appeal — will figure prominently.

The new channel is also open to playing European artists whose styles are compatible with CMT’s format, said Storey, although she was at a loss to name potential candidates.

Through market research, the company believes that Europeans will be receptive.

“Europeans have expressed interest in learning more about the artists,” said Storey.

IFE has shared few details of its plans for Europe, but in its announcement about its proposed acquisition of TVS Entertainment, the company said the purchase would provide it with programming, advertising and sales expertise. IFE needs those to accelerate the launch of a program service in the United Kingdom and in Europe.

A spokeswoman declined to comment on IFE’s European plans.

CMT and IFE will follow the path already traveled by a few other U.S. cable pioneers.

MTV Europe has been rocking throughout the United Kingdom and the continent for six years. During that time, its subscriber base has grown from 2.2 million to today’s 40 million level.

MTV does not disclose advertising revenues, but numerous global marketers of consumer products, such as Coca-Cola Co., Nike and PepsiCo., support it.

CNN has been transmitting CNN Intl. in Europe since 1985.

In the beginning, it relied heavily on the CNN domestic feed, but the news service has evolved so it now features extensive original programming produced exclusively for the international market.

Currently English-language, CNN Intl. has been contemplating the possibility of introducing foreign-language telecasts through joint ventures with local broadcasters, according to a company spokesman.

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