A mood of impending doom pervaded children’s television mart Mipcom Jr., which wrapped Sunday.
The market’s message: The world has become a much scarier place lately and producers had better adapt to the harsher climate.
Not only was there the credit crunch and the ad crunch to worry about, there also was the threat of a junk-food advertising ban in many territories, which will slash tens of millions of dollars a year in ad revenue.
A ban in the U.K. has already cost TV companies around £35 million ($60 million) in the past year and caused leading private web ITV to stop funding children’s TV altogether, Greg Childs of Childseye Consulting said. This has left the BBC with a virtual monopoly when it comes to commissioning kids’ shows in the U.K.
Now a similar ban could be put in place in France, according to Emmanuelle Guilbart, Lagardere Active’s VP of television, France and international. Guilbart said the regulations could wipe out 30% of the ad revenue from its three kids’ channels, Tiji, Canal J and Gulli.
Katharina Pietzsch, project manager for acquisitions and co-production, children and youth, at ZDF, said Germany is likely to implement a ban too. Other European territories are considered likely to follow.
Another threat to revenues comes from the retail sector, with major retailers becoming more risk-averse, said Neil Ross Russell, managing director of children’s and licensing for BBC Worldwide. Retailers are devoting less shelf space to DVDs of kids’ shows, and the space that is available is being devoted to establishing brands.
“The same number of brands and shows are chasing a smaller number of hours and less money,” Ross Russell said.
One way to offset the fall in revenues in the established markets is to push into developing economies.
Guilbart announced that Lagardere will be launching Tiji and Gulli in Russia by year’s end, marking the first time the channels have ventured outside France.
The Disney Channel, Nickelodeon, Cartoon Network and recent entrant KidsCo are all setting up channels in emerging markets as fast as they can.
As the economic ice age sets in, expect Darwinian principles to apply like never before.
“Producers have got to work more efficiently and be smarter,” Ross Russell said.
In this new world order, pubcasters — with their secure revenue streams — and the big three vertically integrated Hollywood pay TV channels hold sway.
Co-productions are a must, but the major funders will demand an even bigger slice of the pie and more control over the product.
Companies in countries with local quotas and generous production subsidies, such as France, have an advantage, but even they will have to depend on the international market for the majority of their funding and the U.S. market is more important than ever.