Mipcom 2016: World’s TV Drama Boom Increasingly About Pay TV

As the 2016 Mipcom market bows, TV drama production still bids, as do its challenges

"This is Us" Pilot
Copyright: Ron Batzdorff/NBC

CANNES, France — With a slew of celebrity appearances, the world premieres of Sony Pictures Television’s “The Halcyon” and Shonda Rhimes’ “The Catch 2,” and new American shows such as “This Is Us” and “Bull,” the 2016 Mipcom trade fair will showcase some of the biggest and most heavily promoted dramas from around the world.

But can the world’s TV business have too much of a good thing? For years now, pundits have talked of a “golden age” in TV drama production. There’s high demand for everything from “true procedurals to highly serialized shows and everything in between,” says Gina Brogi, president of global distribution for 20th Century Fox Television Distribution, which plans to hit Cannes with “an unprecedented number of dramas.”

Indeed, from 2012 to 2015, the number of scripted U.S. TV shows nearly doubled from 181 to 333, according to a new study, World TV Production Report 2016, published by IHS Technology at Mipcom.

But as the world’s international TV industry gathers at Mipcom, which kicks off Monday with a record 14,000 delegates this year, some voices of concern are being raised that the budgetary ambition of certain shows outstripping their ability to recoup on the international market.

“We do need to be wary at the moment,” Sky Vision’s Jane Millichip warned at last month’s Royal Television Society conference in London. While “ambition has never been higher for drama,” linear audiences aren’t growing much, and licensing fees aren’t necessarily going up.

“The gap is appearing in the international deficit,” Millichip said. “If we are not careful, we could be headed for a subprime mortgages moment.”

“There’s definitely a risk of that for programming that’s jumping on the ‘high-end drama’ bandwagon without the qualities of the shows everyone is trying to emulate,” said IHS Technology’s Tim Westcott. “The number of buyers in each market which will pay high license fees is limited, and a lot of markets are facing financial uncertainty and budget pressures, which of course impacts on acquisition expenditure.”

Few industry executives believe that a drama-production bubble is likely to burst any time soon. “I recognize the risk, but the party will continue a few years,” BBC Worldwide’s Tim Davie said at the RTS conference.

Still, there are increasing attempts to place the international drama boom in perspective. One gathering TV revolution, noted Laurine Garaude, director of Reed Midem’s Television Division, has been the near-global sales deals struck by a select but growing number of foreign-language series.

“We are seeing more and more international drama series that are successful around the world,” said Garaude, citing two shows at April’s MipDrama Screenings: ZDF mini “Ku’Damm 56 – Rebel With a Cause,” which was sold in the U.S. and U.K., among other territories, and “Medici: Masters of Florence,” from Wild Bunch TV, which sold in more than 30 markets.

“You can sell your series more than ever,” agreed Bertrand Villegas of The Wit, a TV analysis company. But “don’t ask for big ratings. Apart from U.S. series and four or five British shows, international series don’t get big figures on mainstream channels.”

Hollywood studios are hardly involved in any TV drama boom-to-bust threat. Since January 2015, CBS has secured what many would regard as the Holy Grail of international drama licensing: multi-year, exclusive deals for all Showtime shows and brand usage with some of the deepest-pocketed TV operators on the market, including Bell Media for Canada; Sky for Britain, Germany and Italy; and Telefonica’s Movistar Plus for Spain. More such deals are expected.

“The Showtime silo, that uber premium content that we create, is a limited commodity that is very much in demand in a premium environment, whether premium or digital,” said Armando Nuñez, president and CEO, CBS Studios International.

CBS has about a dozen volume or output deals with “major platforms around the world which basically commit to our content sight unseen,” such as Germany’s ProSieben, Italy’s RAI, France’s M6, or Network 10, Nuñez said.

Many key TV players look set to continue ramping up their drama production. At Studiocanal, for example, Chairman-CEO Didier Lupfer said that the company’s TV production outlets will produce 65 to 70 hours this year, and aim for about 100 hours in 2017.

Currently producing and distributing six series, Paris-based sales company Federation Entertainment hopes to be involved in 12 more in 2017, a 200% increase in slate size. For 80% of that content, Federation would be a co-producer, and for the remainder just a sales agent, said Pascal Breton.

As TV drama production grows, the sector is already adapting to the challenges of greater competition, seeking out niche audiences for foreign-language fare and the opportunities of the digital market.

“I saw a number, that there are 1,310 new international drama series this year, which is staggering,” Davie said at the RTS conference. “It’s what drives pay TV subscription.”

“Sky, Netflix and Amazon now compete in the U.K.. We all know that in two years, Netflix, Amazon probably Hulu and Sky, and maybe Canal Plus or new players like YouTube will compete across Europe,” said Breton. “And all these players in Europe will battle to buy the best European shows. In the next three years, the market will grow dramatically, probably double.”

Increasingly, companies are seeking signature shows made not to boost ratings but to brand a pay-TV’s subscription service or a telecom’s triple-play offer. Revenues at some of the companies can run into billions of dollars. Canal Plus Group sales were €2.6 billion ($2.9 billion) for the first half of 2016; Spanish telco Telefonica, which confirmed its first six original drama productions at the San Sebastian Festival, saw first-half revenues hit €25.2 billion ($27.8 billion).

“The question is: Are you selling ratings or also branding?” said Jens Richter, CEO, FremantleMedia Intl. If the latter, “you can get a premium on top of a very good price.”

In 2016, 31 U.S. premium cable series have launched to date, compared to 29 for 2015. Online platforms have already chalked up 57 series, more than quadrupling the 13 in 2013, according to the IHS Technology report. In contrast, U.S. linear TV and basic cable drama production appears to have dropped off, currently registering at 78 new U.S. network TV scripted shows versus 115 in 2015. U.S. basic cable scripted shows stand at 113 this year, down from 148 in 2015.

“The biggest risk in today’s world is producing just a good drama. With so much drama out there, you have to produce the outstanding drama,” says Richter.

To maximize scale while limiting risk, the sector’s biggest pay-TV players, both digital and premium pay, are increasingly looking to partner on high-end properties, instead of digital platforms taking 100% of original productions.

“When they started, Netflix and Amazon and broadcasters were two [separate] worlds,” said Villegas at The Wit. “This last year, I’ve seen more and more shared licensing deals between Netflix and Amazon and traditional broadcasters.” He cited “The Collection,” Amazon U.K.’s first original production, which is co-produced by France’s Federation Entertainment and public TV France Televisions and sold by BBC Worldwide.

“Our ambition is to come up with something so big and so outstanding that we can also get not only clients’ interest but get partners that share our ambition,” said Richter, adding that “to mitigate risk, we get co-investors and pre-buyers early on.”

One example is FremantleMedia Intl.’s flagship new series at Mipcom, “Deutschland86,” the sequel to hit German-language Cold War thriller “Deustschland83.” Produced by RTL’s Ufa Production in Germany, “Deutschland86” is co-produced by Sundance TV, will premiere on Amazon Prime Video in Germany, and has already closed sales for more than 20 territories.

On foreign-language shows, the real money is in aggregating sales across territories and across the multiple windows opening up in digital. “Deutschland83” has sold to 150 territories so far. In Scandinavia, the show aired on public TV, on pan-Scandinavian SVOD service Cmore, and on Universal Video for physical home entertainment.

“The licensing opportunities in this new world are so much bigger than five to 10 years ago,” Richter said.

The drama boom, despite fast-evolving business models and concerns about recoupment, shows no signs of pullback at Mipcom. The number of world-premiere screenings is an all-time record. A big U.S. drama producer, Rhimes, (“Grey’s Anatomy”), is Mipcom Personality of the Year.

“From a business standpoint, acquisition execs are interested in seeing programs from around the world today. We’ve rarely seen so many program launches,” said Reed Midem’s Garaude.

Some potential event TV highlights at this year’s event:

“AMERICAN GODS” Sales: FremantleMedia Intl. Based on the Neil Gaiman novels, “god in the fantasy space,” said Richter, and backed by three heavyweights:  Starz; Amazon for U.K., Germany and Japan; and FremantleMedia.

“BULL” Sales: CBS Studios Intl. One of the few true-blue new U.S. fall hits, a comedy-drama starring ex-”NCIS” star Michael Weatherly as an intuitive psychologist and jury consultant confronting a new case each week.

“THE CATCH 2” Sales: Disney Media Distribution. Returning to ABC mid-season, the latest from Shondaland (“Grey’s Anatomy,” “Scandal”). One of the big world premieres at Mipcom.

“CLASS” Sales: BBC Worldwide. A “Doctor Who” spinoff in which the Doctor dispatches a group of teenage misfits to fight forces of evil. Billed by BBCW as “epic young-adult fantasy.”

“FORTITUDE 2” Sales: Sky. The Arctic thriller, one of Sky’s biggest original series hits, returns with new characters and its hallmark mix of maybe supernatural and community dsyfunction.

“THE HALCYON” Sales: Sony Pictures Television. An upstairs-downstairs drama set at the august Halcyon Hotel in 1940 wartime London. A Mipcom 2016 world premiere.

“MIDNIGHT SUN” Sales: Studiocanal. Backed by Canal Plus and Swedish broadcaster SVT and written by “The Bridge” co-screenwriters Mans Marlind and Bjorn Stein, Studiocanal’s big play for Mipcom, a Lapland Arctic procedural with a social underbelly laced with Nordic Noir. An Audience Award winner at April’s SeriesMania.

“PREMONITIONS” Sales: Federation Entertainment. From its launch in 2014, Federation Entertainment, the producer of Netflix’s first French series “Marseille,” has proved a consistent producer-sales agent of edgier foreign-language fare. “Premonitions,” a Canadian supernatural family drama, is one of its latest acquisitions.

“RANSOM” Sales: Entertainment One. The latest attempt by French broadcaster TF1 to bring its drama roster into the 21st century, a crisis negotiator thriller co-showrun by the now Europe-based Frank Spotnitz (“The Man in the High Castle”), given a straight-to-series order by CBS.

“THE SAME SKY” Sales: Beta. Hard on the heels of “Deutschland83,” UFA Fiction’s miniseries is another tale of Cold War espionage, set on both sides of the 1970s Berlin Wall. Academy Award-nominated Oliver Hirschbiegel (“Downfall”) directs. World premieres at Mipcom.

“THIS IS US” Sales: 20th Century Fox Television Distribution. “A warm and touching show, very emotional but at the same time quite funny,” said Brogi. Variety described it as “looking more and more like one of the few genuine hits to come out of the broadcast season.”