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Eastern Europe TV boom startles biz

Industry amazed by region's explosive growth

BUDAPEST — Less than 20 years ago, Eastern Europe’s TV industry emerged from the Communist era as a virtual Stone Age artifice: state-controlled, low-tech and absent of content.

But since the early 1990s, the East’s broadcast industry has gone through a transformation that has amazed even the region’s most ardent boosters.

Discop, once known as the East Euro not-ready-for-primetime TV market, is now associated with NATPE, and at its last gathering in June in Budapest grew 38% from the previous year, with 1,522 participants (including 901 Central and East Euro buyers) as well as 530 TV content sales execs representing 383 distribution companies from 41 countries.

Since many of these sellers were from the region, Eastern Europe has gone from global TV poor man to the maker and distributor of international product.

This is no accident.

“Eastern Europeans watch more TV than their Western counterparts,” Discop creator Patrick Jucaud says. “Television (there) is considered as probably the most important form of popular entertainment.”

High viewership is sucking advertising revenue into the industry and fueling expansion, production and programming purchases.

Some point out that viewing dynamics vary in the region. In burgeoning territories, penetration and audiences are still growing. In more established markets like Hungary, “viewership is high,” says Peter Kolosi, programming director of commercial network RTL Klub, “but not as high as it once was. It spiked several years ago, and since then it has decreased.”

Still, few East Euro broadcast execs are complaining in the face of a boom that is bucking the international trend of market shrinkage. Jucaud admits that low broadband Internet penetration in the East means that TV in the New Europe has less competition.

There also may be historical reasons for East Europe’s passion for viewing. TV penetration was high during the Communist era, a byproduct of the effort by the region’s pre-1990 regimes to make TV the main medium for propaganda and political conformity.

But as Jucaud points out, East Europe’s rich classical culture is being bought up by the rest of the world. Russian-produced miniseries and TV movies based on literary classics by Tolstoy and Dostoyevsky are a highly popular export, he says.

In terms of habits and trends, East Europeans tend to watch the same genre of product as the rest of the world.

“You can see the same things here as in Western Europe,” Kolosi says, “with only a slight time lag.”

But Eastern Europe seems to be forging ahead with technology faster than many Western markets.

“The transition to digital broadcasting in most countries is an important factor contributing to the expansion of television business in the region,” Jucaud says. “New DTH (direct-to-home satellite) platforms are popping up all over the place (such as Poland, Romania and Serbia), while at the same time, cable operators are fast upgrading.”

Technological changes in some territories are a step ahead of the regulatory environment. In Hungary, lawmakers are racing to pass a new media law (perhaps before the end of 2007) that will take the Internet, a swollen cable universe and digital TV (scheduled to launch in Hungary in 2012) into account.

But now that key territories like Poland, Hungary, the Czech Republic, Romania and Bulgaria are in the European Union, there is little relevant political distinction between the East and West, and no regulatory differences.

Ironically, Eastern Europe’s acceptance into the EU could accelerate the region’s TV boom, as broadcasters and regulators continue to seize upon TV as a means of maintaining cultural and economic sovereignty. Declares Jucaud: “Commercial television is a strong symbol of independence.”

And with Jucaud predicting that Eastern Europe’s boom could continue for another 15 years, TV may remain a potent symbol in the area indefinitely.

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