EUR_1010_COVER_EUR_1008_COVER 9/17/10 3:50 PM Page 2
Pay-TV Platforms Euro-Zone Crisis Focus on France Ricky Gervais Endemol’s Ynon Kreiz ZDF Enterprises’ Alexander Coridass www.tveurope.ws
MIPCOM EDITION THE MAGAZINE OF EUROPEAN TELEVISION
OCTOBER 2010
Produced by
DRAMA|13 x 1 hour| MIPCOM Stand RB1 Riviera Beach · Cannes www.fremantlemediaenterprises.com
09:48
ITV_TVEUR_2010_Layout 1 9/15/10 7:07 PM Page 1
Fighting crime up close and personal 26 x half hour
MIPCOM Stand No: R38.01 www.itvstudios.com
ITV_TVEUR_2010_Layout 1 9/15/10 7:08 PM Page 2
EUR_1010_CELESTIAL_Layout 1 9/15/10 9:36 PM Page 1
EUR_1010_CELESTIAL_Layout 1 9/15/10 9:37 PM Page 2
EUR_1010_UPFRONT_EUR_1006_ELLENDER 9/16/10 8:50 PM Page 2
6
TV EUROPE
Bavaria Media Television www.bavaria-media.tv • Crazy About Love • A Houseful of Animals • Blinded by Faith • Storm of Love
“ Our goal is to satisfy the demand
for quality and series programming. We expect a good market.
Among the highlights Bavaria Media Television is presenting for the international market at MIPCOM are two highprofile series from Italy and Germany. “Our highlights for MIPCOM include high-quality TV series for family entertainment, as well as appealing and current-affairs fiction drama,” says Philipp Kreuzer, Bavaria’s VP of international and co-productions. “Together with our other new titles from drama, family and romance genres, we are certain to meet our buyers’ demands.” Crazy About Love is a modern comedy produced by Publispei in co-production with RAI Fiction. A Houseful of Animals, produced by Polyphon Südwest for public broadcaster ARD, is about a Hamburg-based veterinarian who wants to start a new life in Southern Germany’s Black Forest region with his wife and children.The German-Turkish political thriller Blinded by Faith is a 90minute TV movie centered on a young Muslim living in Cologne. The telenovela Storm of Love has been a standout success in Germany, as well as other European countries.
”
—Philipp Kreuzer
A Houseful of Animals
DW-Transtel/ Deutsche Welle www.dw-transtel.de / www.dw-world.de
IN THIS ISSUE State of Pay The developments at the leading cable, satellite and IPTV platforms That Sinking Feeling The effects of the euro-zone crisis on media companies
• Global Ideas • Acting Today for a Better Tomorrow • The Mysteries of the Brain • Unlocking the Past • Nature’s Treasures
14
22
Vive la différence! A profile of the French television landscape 30 Interviews Ricky Gervais Endemol’s Ynon Kreiz ZDF Enterprises’ Alexander Coridass
38 44 46
The offerings from DW-Transtel/Deutsche Welle for MIPCOM buyers include a variety of documentaries that cover everything from global and ecological challenges to scientific research, history and lifestyle. Global Ideas features people across the world who are pursuing innovative projects to counter global warming. Acting Today for a Better Tomorrow also focuses on topics that are of global interest, presenting people who approach current social, political and ecological problems in unconventional ways. There is also The Mysteries of the Brain, Unlocking the Past and Nature’s Treasures. “Many of these topics, like global warming, affect us all,” notes Petra Schneider, Deutsche Welle’s director of distribution. “More and more people are looking for the background into these tough issues and our shows can provide that.”
Acting Today for a Better Tomorrow
“It’s always exciting to
come back to MIPCOM and present our latest productions to our long-standing clients who are used to [our] quality programming.
”
—Petra Schneider
The Assendance of Athens: © INDIGENES Productions – Warrior Kings of Siberia: © Benoit Segur – Sled Dog Soldiers: DR – Continents: a Perilous Odyssey: © Cie des Taxi-Brousse / Ideacom Int’l
EUROPEIMAGES_TVEUR_2010_Layout 1 9/15/10 7:10 PM Page 1
PRESENTS
Booth 20.02
MIPCOM
europeimages.com contact@europeimages.com
EUR_1010_UPFRONT_EUR_1006_ELLENDER 9/16/10 8:51 PM Page 3
8
TV EUROPE
Europe Images International www.europeimages.com • France 1788½ • Is the Magnetic Pole About to Flip? • The Destiny of Rome • Rosie • Survival Kit
Ricardo Seguin Guise
Publisher Anna Carugati
Editor Mansha Daswani
Executive Editor Kristin Brzoznowski
Managing Editor Matthew Rippetoe
Production and Design Director Simon Weaver
Online Director Phyllis Q. Busell
Art Director Kelly Quiroz
Sales & Marketing Manager Erica Antoine-Cole
Business Affairs Manager Cesar Suero
Sales & Marketing Coordinator Alyssa Menard
Sales & Marketing Assistant
Ricardo Seguin Guise
President Anna Carugati
Executive VP and Group Editorial Director Mansha Daswani
VP of Strategic Development TV Europe © 2010 WSN INC. 1123 Broadway, #1207 New York, NY 10010 Phone: (212) 924-7620 Fax: (212) 924-6940 Website:
www.tveurope.ws
The Destiny of Rome
Europe Images International is excited to present both its new programs as well as library titles. The series France 1788½ leads off the slate. Catherine Alvaresse, senior VP of sales and co-productions, describes the program as a “beautifully shot historical series, set on the eve of the French revolution. This period comedy pokes fun at the foibles of history, finding humor where we least expect it.” The science documentary Is the Magnetic Pole About to Flip? attempts to grasp the consequences of an inversion of our planet’s magnetic poles. Among the other standout titles in the catalogue, Alvaresse notes, are The Destiny of Rome, Rosie and Survival Kit, a series for tweens and teens.“Whoever you are and whatever the situation, Survival Kit shows there is always a strategy to cope for teens, because we know they can have it tough!” says Alvaresse.
“We have an exciting
new slate of documentary, animation and fiction; our programs are unique and [have] high production values.
”
—Catherine Alvaresse
Fox International Channels www.foxinternationalchannels.com • The Walking Dead
From the Emmy Award-winning network AMC, director Frank Darabont and producer Gale Ann Hurd comes the new drama series The Walking Dead. The show—based on the bestselling graphic novel of the same name—centers on a group of survivors, dealing with the consequences of a zombie apocalypse. “The Walking Dead is the first U.S. TV series that Fox International Channels owns outside of the U.S. and Canada and the first U.S. drama that we are bringing to MIPCOM,” explains Sharon Tal Ygaudo, the senior VP of original programming and development at Fox International Channels. “Together with our distributor (eOne), the producer of the show and cast (Andrew Lincoln and Sarah Wayne Callies), we are hoping to find potential broadcast networks that we can partner with on this groundbreaking project.” Tal Ygaudo calls the show “a must-watch TV experience in any place and in any language.”
“The Walking Dead
tells a universal story, involving suspense and human drama.
”
—Sharon Tal Ygaudo
The Walking Dead
Get daily news on European television
by visiting www.tveurope.ws
ZDF_TVEUR_2010_Layout 1 9/15/10 7:11 PM Page 1
EUR_1010_UPFRONT_EUR_1006_ELLENDER 9/17/10 3:36 PM Page 4
10
TV EUROPE
Mediaset Distribution www.mediasetdistribution.com • Antimafia Squad • Intelligence • Sin and Shame • The Monster of Florence • RIS: Crime Evidence
“We’re looking to increase our sales of
finished programs and continue the great performance we’ve had lately regarding scripted formats.
”
In addition to Mediaset Distribution’s catalogue of finished programs, the company has been building out its new scripted-formats business. “After over a year of activity we have closed options and adaptations in 11 different countries, including France, Russia, Spain and the U.S.,” notes Patricio Teubal, Mediaset’s head of sales. “We look to promote and strengthen the market perception of our company as not only a supplier of ready-made programs, but also as a provider of successful and profitable stories and ideas for producers.” Scripted formats on offer include Antimafia Squad, which recently closed an option with ABC Studios in the U.S., and Intelligence. From Mediaset’s finished catalogue comes the drama Sin and Shame and the miniseries The Monster of Florence, a thriller based on a true story that is still a mystery after 30 years of investigation. Mediaset is also launching new seasons of the successful series RIS: Crime Evidence.
—Patricio Teubal
Antimafia Squad
ORF (Austrian Broadcasting Corporation) contentsales.ORF.at • The Camera Murderer • Molly & Mops • The Infernal Comedy • Last Frontier: History of the Conquest of Space • Zambezi: The Thundering River
“We now offer an even more extensive range of content [across] all genres.”
—Beatrice Riesenfelder
Fiction is going to be more of a focus for ORF this time around at MIPCOM, with the distributor presenting two features and several TV movies and series from independent producers. The new ORF lineup will appeal to “not only pubcasters, but also private channels with a young audience,” says Beatrice Riesenfelder, ORF’s head of international content sales. This includes the crime-based TV movie The Camera Murderer and the romantic comedy TV movie Molly & Mops. “Infernal Comedy with John Malkovich is a real nugget,” Riesenfelder points out, describing it as a “musical theater piece for Baroque orchestra, [with] two sopranos and an actor playing the role of a serial killer. Malkovich is on tour with this performance, [which has been] acclaimed by the press and audiences,” she adds.There are still a number of documentary highlights, among them Last Frontier: History of the Conquest of Space and Zambezi: The Thundering River.
Molly & Mops
168
World Screen
10/10
BAVARIA_TVEUR_2010_Layout 1 9/15/10 7:12 PM Page 1
EUR_1010_UPFRONT_EUR_1006_ELLENDER 9/16/10 8:53 PM Page 6
12
TV EUROPE
TM International www.tmg.de • Moby Dick • Haven • Flashpoint • Thorne • Shades of Love
“ From great adventures, gripping
action to breathtaking romance, our portfolio always aims at the highest quality standards.
”
Haven, based on a Stephen King novella, has been generating much buzz throughout the international market since its premiere earlier this year on Syfy in the U.S. The 13x1hour mystery series has a prominent place in the catalogue of TM International, the distribution arm of Tele München Group (TMG). There are more than 150 titles—covering TV movies, mini-series, series and feature films—offered by TM International. “As one of Europe’s leading independent producers and distributors, TMG is dedicated to bringing highlights to audiences worldwide,” says Bernd Schlötterer, the company’s managing director. Besides the hit Flashpoint,TM International distributes TMG’s in-house productions like the new TV-event mini-series Moby Dick. There’s also the new crimethriller franchise Thorne, based on the bestselling novels by Mark Billingham, and Shades of Love, a Rosamunde Pilcher TV movie.
—Bernd Schlötterer
Moby Dick
TV5MONDE www.tv5.org • TV5MONDE Europe
Le Bar de l’Europe
TV5MONDE Europe is the channel’s most widely distributed signal, and is able to reach out to the 135 million non-French-speaking households in Europe, “thanks to our active subtitling policy,” explains Marie-Christine Saragosse, the director-general of TV5MONDE. The European feed currently offers subtitling in Russian, German, Dutch and Romanian, in addition to subtitling in French. “We have recently increased the volume of subtitling in these languages, and nearly all programs broadcast between 5 p.m. and 2 a.m. will now be subtitled,” Saragosse notes. “The increased audiences resulting from this change have encouraged us to pursue more developments in this area, and subtitling in Polish will be launched before the end of the year.”There are plans to introduce English and Spanish before next spring as well. Distribution of TV5MONDE Europe has increased, Saragosse notes, “with significant new contracts and contract renewals with major cable, satellite and IPTV operators, which has allowed the channel to reach 2 million more households.”
“TV5MONDE has been operating in Europe for 26 years, and a strong affection for the channel exists in all European countries.
”
—Marie-Christine Saragosse
170
World Screen
10/10
DW_TVEUR_2010_Layout 1 9/15/10 7:13 PM Page 1
EUR_1010_PAYTV_EUR_1006_ELLENDER 9/15/10 8:19 PM Page 2
14
TV EUROPE
State of Increased competition from new platforms and technologies are putting pressure on key European pay-TV players.
Pay
By Jay Stuart Before the current football season got underway in the U.K., something happened that encapsulates the big change taking place in the pay-TV markets across most of Europe’s key territories. Telecoms group BT, which operates the BT Vision television service, started offering subscriptions to Sky Sports 1 and 2 at a price of £12 per month. Pay-TV company BSkyB, in the meantime, charges £38 per month for those channels (which it owns) in a package with Sky Sports 3 and 4 as well. So customers can actually get the Sky channels from BT for about 70-percent less than they would cost from Sky itself. There is some fine print. BT customers also need to sign up for phone-line rental and broadband on a 24-month con172
SES ASTRA operations room.
World Screen
tract and the telco makes an initial set-up charge of £65, which Sky does not charge. But the discount is still whopping. BSkyB aims to hit 10 million subs this year. BT Vision is at 463,000 and cable company Virgin Media has 3.7 million.The U.K. is now in the midst of a triple-play battle among them for customers taking pay TV, fixed-line rental and broadband (there is also quadruple play when you add mobile phone). In March 2010, regulator Ofcom cleared the way for BT’s predatory move by ruling that BSkyB would have to sell the channels to rival platforms at specified wholesale prices. Sky was already wholesaling its channels of course, but the stringent terms of its commercial deals have always been a subject of controversy. The new ruling is intended to make it so that other 10/10
EUR_1010_PAYTV_EUR_1006_ELLENDER 9/15/10 8:19 PM Page 6
TV EUROPE
people can actually make a margin on the Sky product, so it’s ironic that BT is taking a huge hit with its loss-leader strategy. It is paying Sky a wholesale rate of almost 60-percent more per sub than it collects from retail customers. BSkyB has actually raised the retail price of Sky Sports 1 and 2 by £3, bumping up the wholesale cost from £17.14 to £19.07 a month, which is the amount it collects from BT. On the subs it loses to BT, Sky is making only about 50 percent of the £38 it would make from its own sub for the same channels. “Traditional pay-TV operators do not want to destroy their existing margins,” says Alexandre Michelin, the executive producer of MSN.fr Microsoft, formerly head of pay-per-view for Canal+ in France. “But then competitors come along that don’t care about margins and they steal customers.” The most obvious general trend in the biggest European markets is the increase in competitive pressure on the big payTV incumbents. The competition comes from telcos such as BT and France Telecom’s Orange, with its IPTV channels, and especially in DTT, where free-TV companies are mounting new challenges. Exclusivity, especially for sports rights such as the domestic football leagues, was the driver of pay TV’s growth in the 1990s. But that has broken down under regulatory pressure and newcomers are offering sports content too. Competition has been translating into downward pressure on prices for the consumer. MORE FOR LESS
“Digital has broken down barriers and has undermined the gatekeeper role of the traditional players across the media industry,” says leading analyst Nick Bell, the managing director of Jefferies International. “Digital means more for less.That holds true everywhere. Digital generally has a deflationary effect in pay TV.”
10/10
“There is a lot of pressure on the old pay-TV model,” says Lucien Boyer, the CEO of Paris-based Havas Sports & Entertainment. “The acquisition by Orange of football rights in France was an example of the new competition, although the challenge is not mature yet—mobility is likely to become more important.” If so, that would obviously play into the hands of the phone operators. Faced with Orange’s challenge in France, Canal+ introduced a low-cost package called Initial priced at €9.90 per month, a 70-percent discount on the classic Canalsat package. It offers about 50 channels, mostly available free on DTT, but also Sport+ and two movie channels, including a sci-fi movie channel from AB Sat. It also offers another discounted package called Canal+Weekend for Friday to Sunday subscribers. Canal+ executives have made no secret of the difficulties in recruiting new subs.“We’ve noticed a slowing in France, but our subscriber base continues to grow,” Canal+ Group’s president, Bertrand Meheut, told Le Figaro.The overall impact of the new low-cost channels for Canal+ is difficult to measure because there have been discounts in other packages, too.The Canal+ France portfolio actually gained 238,000 net subs last year. Revenue per sub grew by €1 per month and churn was cut from 13 percent to 12.3 percent. The competitive environment is proving quite challenging in Germany, where pay TV continues to struggle. Rupert Murdoch put his Sky brand on the former Premiere platform in 2009 and renamed it Sky Deutschland. News Corporation currently owns 42.4 percent and is backstopping a planned capital injection of €340 million taking place in early autumn, a move which may increase News Corp.’s stake to the 49.9 percent foreign ownership limit. Sky Deutschland has been struggling financially. In 2009, the company reported negative EBITDA (earnings before taxes,
World Screen
173
15
The is gr
Golden entertainment: Ramping up its investment in Sky1— including becoming the exclusive U.K. home of HBO programming such as Boardwalk Empire— has been one of BSkyB’s key strategies.
EUR_1010_PAYTV_EUR_1006_ELLENDER 9/15/10 8:20 PM Page 8
16
TV EUROPE
year ago. It competes with a digital satellite offering from Sky Italia with 4.7 million subs. Both platforms offer live domestic football matches. There is a price war in Italy, too. Mediaset is cutting pay-TV prices after cuts by rival Sky Italia. At the end of June, Sky Italia said it would cut entry-level prices by about one-fourth to €29, compared with €26 for Mediaset’s offering. Mediaset responded with a promotional pay package, including football, at €14 per month until the end of 2010. Mediaset said its pay-TV business will break even this year. ROLE OF REGULATION
Playing to win: Bundesliga coverage, as well as other sporting events, have taken center stage at Sky Deutschland.
Everywhere, regulation continues to play a key role in shaping the new pay-TV market. Nowhere more so than in Italy since the emergence of Mediaset’s DTT pay-TV challenge. Legislation a year ago doubled the VAT on pay TV. A new decree has slashed advertising limits on pay TV. Previously Sky Italia was allowed up to 18 percent commercial time per hour. The new limit will be 12 percent, to be ushered in over three years, falling first to 16 percent, then 14 percent. Mediaset, meanwhile, has been given more advertising inventory for its free-TV business, up to 20 percent from 18 percent. The European Commission in Brussels has ruled that no provider could own more than 20 percent of the whole DTT market. That did not count pay-TV or time-shift channels in Italy until recently, when regulator Agcom extended the regulation to those channels. On July 20 of this year, the European Commission approved Sky Italia’s request to bid for slots on DTT. By granting this approval, the commission has agreed to waive the section of the obligations agreed to by News Corporation in 2003 to secure regulatory clearance for the merger between Tele+ and Stream. Tom Mockridge, CEO of Sky Italia, said in a statement,“The commission has confirmed the Italian TV market has undergone
amortization and depreciation) of €267.2 million, and it has indicated that EBITDA will remain negative not only for the current financial year ending December 31, 2010, but for 2011 as well, though results are forecast to be much improved next year. The subscriber count reached 2.476 million at the end of the second quarter of 2010. Customer retention has improved with the 12-month rolling churn rate down to 20.1 percent from 22.4 percent in the second quarter of 2009. In August, Sky launched three new HD channels, taking its hi-def count to ten channels.These are available at an extra charge of €5 per month. In the last year, terrestrial broadcaster RTL dipped its toe into the pay-TV market with the launch of three DTT channels, Passion, RTL Crime and RTL Living, at a price of €2.99 per month. The biggest change of late in the European pay-TV landscape has been the re-emergence of DTT. The DTT pay experiment failed in the U.K. when ONDigital crashed nearly a decade ago. DTT pay TV also failed the first time around in Spain with Quiero. But now another phase is under way with forceful payTV challengers in Italy and Spain and emerging competitors in the U.K. and France. In May of this year, the CSA, the national television regulator in France, decided to advertise three new pay-TV and two new free-to-air HD slots on its DTT platform.The decisions came a year after two pay-DTT channels, AB1 and Canal J, handed back their licenses.The new services are to launch next year. Mediaset, Italy’s leading commercial broadcaster, has a pay-TV offering on DTT called Premium with about 4.4 million subscribers via smart cards (the number fluctuates according to the number of active cards at any given time). It claims that In the control room: Sky Italia is looking to build its subscriber base with sports packages subs have tripled compared with a and further HD rollouts. 174
World Screen
10/10
SEVENONE_TVEUR_2010_Layout 1 9/17/10 8:56 AM Page 1
EUR_1010_PAYTV_EUR_1006_ELLENDER 9/15/10 8:20 PM Page 10
18
TV EUROPE
New dimensions: Canal+ in France delivers a host of content on demand, including movies, series and more.
significant changes in the last few years, driven also by Sky Italia’s constant commitment to bringing new competition, innovation and choice to a market historically dominated by two incumbents. If Sky Italia is successful in its DTT bid, the Italian consumer stands to gain once again, as do potential advertisers.” SPECTACULAR GROWTH
Mediapro and free-TV operator La Sexta jumped in with the launch of Gol Television as the foundation of a new payTV platform. It is available on the other platforms, ADSL and cable, but not digital satellite. Subscriber growth of the channel has been nothing short of spectacular with over 1 million subs already. Priced at €15 per month, Gol TV offers loads of football at a big discount compared with Digital+. On each match day, the service shows either a Barcelona or Real Madrid game, plus Champions League, Premier League, Italian League and other premium content. Now, the partners are preparing a fuller pay-TV package for launch, adding AXN and two or three more channels. There is also speculation that Digital+ in partnership with Telecinco owner Mediaset (which also owns 22 percent of Digital+) will launch another DTT platform. Not everyone is convinced by the new DTT success.“I’m not a believer in the view that digital terrestrial is the next gold mine,” says Alfonso Rodés Vila, worldwide CEO of Havas Media. “The real competition will be IPTV.” The real challenge for traditional pay TV on DTT may be the advent of the ‘freemium’ platform. Subscribers come to the platform for free and then they pay for exclusive content or exclusive interaction. The biggest competitive threat may be in the U.K., where Project Canvas is in the works, bringing together a strong consortium of programming suppliers with a unified set of technical standards. Essentially, Project Canvas involves updating DTT platform Freeview, making it into TV 3.0. The core proposition is to integrate over-the-air and broadband connectivity with a single electronic programming guide (EPG). The aim of this is to bring together all services, including TV and VOD, making them available through a simple and inexpensive set-top box. The key pay-TV metrics of subscriber growth, ARPU, churn and marketing costs show things started to flatten out for BSkyB after the launch of Freeview in 2003. Freeview offered a box
In Spain, as in Italy, the pay-TV landscape is spread out over all TV platforms. The biggest player is on digital satellite. Digital+ was born of the merger of Canal Satelíte, owned by Canal+ Spain, and Via Digital, backed by Telefónica, with about 1.8 million subscribers.That total has actually softened from about 2 million. “Digital+ is not growing and not retaining subs, and the reason is price,” says Melcior Soler, the president of Barcelona-based IXTV Media Consultants, who was for many years head of sports for Sogecable, owner of the Spanish Canal+ and then Digital+. The Digital+ premium package costs €64 per month. ADSL providers are Imagenio (with about 800,000 subs) and Orange (about 100,000). The main cable provider is ONO with over 1 million subs. Euskaltel in the Basque country is the biggest of the other cable providers. Everything changed with the launch of DTT, which now has 100-percent coverage in the country. Last year, the government authorized any operator with a DTT license to use half of its DTT capacity Plus entertainment: Sogecable in Spain owns the local pay-TV channel Canal+ as well as the leading pay-TV operator Digital+. for pay-TV services. 176
World Screen
10/10
ORF_TVEUR_2010_Layout 1 9/15/10 7:14 PM Page 1
EUR_1010_PAYTV_EUR_1006_ELLENDER 9/15/10 8:21 PM Page 12
20
TV EUROPE
Winning team: Investing in sports, including acquiring local football rights, has been one part of Orange’s efforts to make an impact on the French pay-TV market.
with very little upfront cost, under £30, and took people from five analogue channels to 20 free digital channels. “It has impacted Sky,” says Jefferies International’s Bell. “It is harder to grow the business. Freeview had been a factor in pushing Sky to reconfigure its consumer strategy, offering the personal recorder for free, for example. Sky is also offering a free box for HD, but is charging £10 per month for HD services. It’s not clear how long that can last, especially when Freeview starts HD.” Bell sums up, “The problem for Sky is that it doesn’t do free.” OFFENSIVE TECHNOLOGY
“There are two strategies for reacting to competition,” says Microsoft’s Michelin. “One is purely defensive. That is about distribution on all platforms. The other is aggressive, using new technology to protect the business. If you have an existing brand that is attacked by competition, you must re-invent yourself and you do that with technology. A classic example of this is the advent of 3D in the movies.” Technological innovation is an area where pay-TV operators have shown particular strength. At present, the pay-TV brands appear to be focusing on underlining their technological prowess rather than their unique content as in the past. “Sky has a history of extraordinary innovation,” said Jefferies International’s Bell. “It really has changed the structure of the competition. It introduced digital TV in the country in the late 1990s, it was the first to offer the personal video recorder, it broke the ice with HDTV and it introduced TV over broadband. Now it is starting 3D with premium football matches, though that is unlikely to be a stand-alone offer or a game-changer.” Sky underlined its innovative approach defensively when BT started to undercut the price on Sky Sports channels by announcing that Sky’s own subscribers to the Sky Sports Pack would get bonus access from mid-July until the end of the year to both Sky Mobile TV and Sky’s online TV service Sky Player.This means that for a single monthly subscription, Sky Sports Pack subscribers will be able to enjoy access to their favorite sports live, across a range of platforms and devices. But pay-TV companies need to tread carefully, according to Microsoft’s Michelin. “Pay-TV companies need to innovate but they don’t like to push too aggressively into new technology because they expose themselves to regulation,” he said. “It’s safer to let the innovators take the risk and then 178
World Screen
buy them or do it on a bigger scale. The danger is when the innovator gets too big too quickly.” The importance of technology for a company built on payTV only goes so far, according to Canal+’s Meheut. He told Le Figaro that his group is careful not to lose sight of its core function as a programmer. “We are very aware of the technological evolution, which is why we’ve made agreements with the likes of Samsung and Microsoft. But at the end of the day, I remain confident about the role of the content provider. One has to play an editorial role even when the content is on demand. It is extremely difficult for the consumer to make choices with such a profusion of options. He needs help and that’s our job.” A big question mark remains over how pay-TV content will be consumed. “There is still a tendency to apply the older generation’s views in analyzing the market,” says Mike Mathieson, the CEO of London-based Cake Group. “People say that everybody would prefer to watch a football match live on a big screen in the living room, but that might not be true at all. Kids might prefer to watch a downloaded match on a mobile.” NEW-MEDIA CHALLENGE
As the market edges toward the long-awaited convergence of television and the PC, what we are starting to see is a blurring of the traditional boundary between pay TV and free TV. “Technology is changing everything,” says Microsoft’s Michelin. “In the cloud computing world the content will come from a database and it will be delivered in various ways. One of those will offer a linear experience. This is more passive. And then there will be the more active, mobile ondemand experience.There is an arc that goes from totally free to totally pay and it’s a matter of what the packages are. The pay-TV operators need to be everywhere.” And convergence is already starting to throw out its own new challenges as viewers watch online. “I’m amazed that pay-TV companies don’t take the piracy challenge more seriously in terms of pricing,” continues Michelin. “The music business model is very relevant. The music companies did not want to do a deal with online challengers because they didn’t like the price. But in the end they had to, and the price was even less attractive.” 10/10
TEKEVISA_TVLAT_2010_Layout 1 9/15/10 7:21 PM Page 1
EUR_1010_CRISIS-4PAGES_EUR_1006_ELLENDER 9/15/10 8:16 PM Page 2
22
TV EUROPE
By George Winslow Riots in the street. Plummeting financial markets. Emergency meetings among top European leaders. And, perhaps most worrying of all, widespread speculation in news reports that the entire euro zone might splinter, shattering the singlecurrency market that European Union officials have long held up as their most notable achievement. Such events were disturbingly common during the spring and early summer, as the crisis over the Greek government’s massive debt quickly spread like the tear gas wafting over the riot-torn streets of Athens, Greece, to Spain, Portugal, Ireland and Italy, raising fears that these governments might also have trouble servicing their debts. At the very least, analysts worried that this crisis could slow Europe’s feeble economic recovery from the financial crisis of 2008 and 2009; at worst, failure to contain the crisis could plunge the whole region into a much more severe recession—even depression—that would create enormous pressure for various governments to withdraw from the euro. For the moment, those fears seem exaggerated. Even when viewed strictly through the prism of the television industry,
That
there is little evidence that the crisis has crippled the TV business in the countries that Wall Street has offensively dubbed the PIGS or the PIIGS—Portugal, Ireland, Italy, Greece and Spain. “Television is a great medium for attracting mass-market audiences and in difficult economic times, when people spend more time at home rather than outside on leisure pursuits, this is especially true,” notes Phil Stokes, PricewaterhouseCoopers’ (PwC) European entertainment and media leader. PwC’s Global Entertainment and Media Outlook: 2010-2014 forecasts that TV advertising will see modest increases in several of these markets between 2010 and 2014, with Greece’s seeing a 4.9-percent annual growth rate, Ireland recovering at 2.6 percent a year, Spain growing by 0.8 percent a year and Italy increasing its TV ad spend by 0.5 percent annually in constant 2009 U.S. dollars. Only Portuguese broadcasters will see negative 0.6-percent annual growth in TV advertising during the 2010 to 2014 period. In fact, some analysts believe that a number of these TV markets are actually performing better than expected.“Our forecasts
SINKING Feeling Portugal, Italy, Ireland, Greece and Spain grapple with the euro zone debt crisis.
180
World Screen
10/10
TELEVISA_TVEUR_1010_Layout 1 9/16/10 8:01 PM Page 1
TELEVISA wsn indd 1
9/15/10 3:07 PM
EUR_1010_CRISIS-4PAGES_EUR_1006_ELLENDER 9/15/10 8:16 PM Page 8
24
TV EUROPE
for television advertising in Ireland, Italy and Portugal actually increased a bit in our most recent estimates [released in July] over the forecasts we made at the end of March,” notes Jonathan Barnard, the head of publications at ZenithOptimedia. Barnard adds that ZenithOptimedia has also very slightly raised its estimates for the ad spend for Spain from its nogrowth forecast issued in March to a slight 0.2-percent increase. Plus, the 9-percent drop they’re predicting for Greece in 2010 is better than most other media.“We are not expecting anything spectacular from any of those markets, but they are looking slightly better than before this recent crisis hit,” he says. MULTICHANNEL GAINS
Judgment day: While still facing an ad crunch, Ireland’s RTÉ continues to invest in programming, including the original series The All Ireland Talent Show.
Some good news also comes from the multichannel world. While Greece, Italy and Spain have some of the lowest penetration rates for pay TV in Western Europe, and operators in Spain and Portugal have reported some subscriber losses, overall penetration of multichannel services continues to grow, thanks mostly to the growing popularity of digital terrestrial television (DTT) in markets like Italy. PwC is predicting that subscription TV spending between 2010 and 2014 will increase in all of these countries, with Greece growing 10.8 percent a year from a very low base, Ireland growing by 8.6 percent despite already high penetration levels of pay TV, Italy showing a 7.8-percent annual bounce in subscription spending, Portugal seeing 7.2-percent growth and Spain increasing by 6.5 percent a year. MagnaGlobal’s executive VP and director of global forecasting, Brian Wieser, also notes that television is increasing its share of the total advertising pie in all of these countries in 2010, a trend he attributes to the fact that TV advertising remains the most efficient way to reach mass audiences. “TV is retaining its dominance and is capturing the larger share of advertising in less strong markets,” he explains. “The largest advertisers who were TV-centric have kept their TV
182
World Screen
budgets constant during the recession but are cutting other media [like radio, newspapers and magazines]. To paraphrase Winston Churchill’s comments about democracy, if your marketing objective is to maximize spending against reach and frequency, television is the worst form of advertising, except for all the others that have been tried.” UNCERTAIN FUTURE
That isn’t to say the worries about these economies are simply another example of the mass hysteria that seems to grip financial markets from time to time, or that the so-called PIIGS will be flying high anytime soon. In Ireland, Dermot Horan, RTÉ’s director of broadcast and acquisitions, explains that the real-estate crash and subsequent financial crisis affected Ireland earlier than some of the other economies and that the Irish government moved quickly to address its deficits by cutting spending and increasing taxes. “In one fell swoop taxes went up and those who were employed ended up taking home less money,” Horan recalls. “Unemployment went from 4 percent at the beginning of January of 2009 to 14 percent and this had a very significant effect on all the broadcasters. RTÉ is half funded by advertising and our advertising went down more than 30 percent in 2009, which means that we are effectively trading at advertising levels we enjoyed back in 2002 and 2003.” Horan thinks the Irish economy and the television industry have “hit the bottom of the barrel. I don’t see any more declines. But down at the bottom of the barrel it is murky. It is hard to see what is going to happen and it is slippery down here. It won’t be easy to get out. There won’t be any quick recovery where we suddenly bounce back to where we were in 2006 and 2007.” The long-term impact of the crisis can be seen in some of the debt levels. By the end of 2010, gross debt in Greece will stand at 124.9 percent of GDP, and it will hit 118.2 percent in
10/10
SBT_TVEUR_2010_Layout 1 9/15/10 9:39 PM Page 1
EUR_1010_CRISIS-4PAGES_EUR_1006_ELLENDER 9/15/10 8:17 PM Page 10
26
TV EUROPE
Italy, levels that economist Fabian Zuleeg of the European Policy Centre (EPC) called “unsustainable” in a recent major report. High government debt levels can also be found in Portugal at 85.8 percent of GDP, a level the report also called “unsustainable,” and in Ireland at 77.3 percent and Spain at 64.9 percent, which the EPC study described as “in danger” of reaching unsustainable levels. DEBT CONCERNS
This debt also poses risks for euro-zone banks that could slow or imperil economic growth throughout Europe, creating worries that a severe banking crisis could erupt if one of these governments has trouble paying its debts or borrowing more money. At the end of 2009, euro-zone banks held a whopping €1.2 trillion worth of government debt from Greece, Ireland, Portugal and Spain, and another €744 billion worth of private debt to residents of those countries, according to the Bank for International Settlements (BIS). Much higher numbers would be cited if the study had included banks from the U.K., which are not part of the euro-zone, or if BIS had included Italy in its figures. Even if these debts are repaid in full, the impact of the collapse of the real-estate markets, high levels of consumer debt and the cost of bailing out insolvent banks and financial institutions will weigh on consumer spending and the television industry for years. “Ireland is a market of just 4.2 million people, but bailing out the banks from the collapse of the real-estate market and the financial crisis will probably cost €60 billion to €70 billion,” Horan notes. “Ireland isn’t in the same category as Greece, but we will have to pay that money back over 10 or 15 years.
184
World Screen
So the recovery may be happening, but it will be slow and fragile.” Better-than-expected TV advertising performance predicted by a number of analysts will still translate into some poor numbers. MagnaGlobal is projecting that TV ad revenues in 2015 will still be below pre-crisis levels in Greece, Ireland, Italy, Portugal and Spain. That is likely to affect programming budgets and acquisitions for years to come. Horan notes that RTÉ has had to cut salaries and programming budgets, but has worked to avoid heavy cuts to domestic programs in prime time. “It is what really sets us apart,” he explains. The broadcaster has also acquired several new U.S. shows and is looking to continue acquisitions, though perhaps at lower prices, at MIPCOM. “We are still looking to source material and do the best deals we can,” he says. “Even though we’ve encountered very significant falls in revenue we still have to fill the channels we have.” AND THEN THE GOOD NEWS
Wide variations in these markets are also important to consider. The Greek economy has been the hardest hit and ZenithOptimedia is predicting advertising will drop by 9 percent this year, following a steep decline of 17 percent in 2009. But even amid this depressing prognosis, there are some grounds for optimism. MagnaGlobal has taken a more bullish view, predicting 3.5-percent growth in TV advertising in Greece in 2010 and declaring that broadcasters are holding up better than other media, which are seeing serious declines, notes MagnaGlobal ’s Wieser. Since the start of the crisis,Alpha TV’s position has been shored up by the RTL Group, which acquired 66.6 percent of Alpha Media in late 2008. Since the acquisition, Alpha has been beefing up its programming, an investment that much improved ratings during the 2009-10 season. Its target audience in the 15-to44 demo increased by an impressive 43.1 percent during the season, giving it a 17.6-percent share of the demo. Another Greek broadcaster,Antenna Group, or ANT1 as it is known in the market, sold its stake in Bulgarian broadcaster Nova Televizia in 2008 for €620 million, providing it with a hefty pile of cash that should help it ride out economic problems. Management
10/10
TVAZTECA_TVEUR_2010_Layout 1 9/15/10 7:18 PM Page 1
EUR_1010_CRISIS-4PAGES_EUR_1006_ELLENDER 9/15/10 8:17 PM Page 12
28
TV EUROPE
has also said it would like to make some significant international investments, a move that could lessen the company’s reliance on the Greek market. To that end, Antenna was part of a failed bid for the broadcaster Channel 5 in the U.K. this summer. Mega TV, which was the first commercial broadcaster to launch in Greece and is generally the highest-rated station, continues to invest heavily in new programming. Its Secrets of Eden series has become one of the few Greek series that has been widely exported outside the market and it is currently spending around €150,000 an episode to produce The Island, based on the bestselling international book by Victoria Hislop for the 2010-11 season. That will make the show the most expensive series in the history of Greek TV, according to local press reports. Italy has debt levels nearly as high as Greece’s, but in sharp contrast was able to easily issue new bonds this summer and its television industry is probably the strongest of the group. ZenithOptimedia is predicting a 3.9-percent increase in advertising this year and the commercial broadcaster Mediaset’s results for the first half of 2010 beat analysts’ expectations with profits increasing by 33.6 percent to €241.6 million and revenues from its Italian operations growing by 11.3 percent. The decision by the Italian government, led by Prime Minister Silvio Berlusconi, whose family controls Mediaset, to limit advertising on pay-TV channels and the popularity of
the digital terrestrial television have, however, hurt the dominant pay-TV operator Sky Italia. Its subscriber numbers actually declined in the last quarter of 2009, the first such losses since News Corporation took control of Sky Italia in 2003. That has forced the pay platform to cut prices for its premium channels and to step up its efforts to get regulatory approval for the launch of a DTT offering. For broadcasters, however, the popularity of DTT, the launch of which was massively funded by Italian government subsidies that European authorities subsequently found illegal, has been a boon. In the short run, the popularity of the relatively limited DTT offering has limited audience fragmentation and, in the longer run, it could produce significant pay-TV revenues for Mediaset, which launched a pay-DTT package in 2007 that includes popular on-demand sports and movies. The offering has already seen significant uptake, cutting into Sky Italia’s growth and Mediaset is expecting the service to break even this year. Commercial broadcasters are also looking stronger in Spain, thanks largely to the government’s decision to remove all advertising from public stations at the start of 2010.While total TV ad spend for the market will remain virtually flat this year, the new regulations have boosted prices for ads on the commercial broadcasters by as much as 25 percent, according to ZenithOptimedia’s Barnard. “The fact that advertisers are willing to pay those prices illustrates the value of television,” he notes. WINDS OF CHANGE
Greece GDP ($ Billions) TV Advertising ($ Millions) TV Advertising Share (%)
2009 330.1 900 29.3
2010 329.7 810 30.6
2011 329.3 770 31.2
2012 333.9 770 31.3
2009 230.7 417 18.8
2010 222.7 434 19.3
2011 225.6 477 19.3
2012 232.8 525 19.3
2010 2,138.0 6,096 57.1
2011 2,200.5 6,279 57.0
2012 2,273.7 6,411 56.6
2010 225.4 673 58.2
2011 229.5 707 58.3
2012 234.6 771 59.3
2010 1,473.9 3,297 43.5
2011 1,502.1 3,363 42.8
2012 1,541.4 3,464 40.9
Ireland GDP ($ Billions) TV Advertising ($ Millions) TV Advertising Share (%)
Italy 2009 GDP ($ Billions) 2,091.8 TV Advertising ($ Millions) 5,870 TV Advertising Share (%) 56.4
Portugal GDP ($ Billions) TV Advertising ($ Millions) TV Advertising Share (%)
2009 223.0 647 57.8
Spain 2009 GDP ($ Billions) 1,462.3 TV Advertising ($ Millions) 3,291 TV Advertising Share (%) 42.7 Source: ZenithOptimedia. U.S. Dollars.
186
World Screen
Even so, the market has seen some significant changes.The heavily indebted Prisa Group was forced to sell its free-to-air channel Cuatro to Spain’s leading private channel,Telecinco, in April. As part of that deal, Telecinco also acquired a 22-percent stake in Prisa’s satellite platform, Digital+.That could lead to a complete ownership change and a potential shakeup in the pay-TV landscape that might introduce more competition, some analysts note. In the meantime, however, PwC is predicting relatively stagnant growth, with subscription-TV penetration in Spain growing from only 26.7 percent this year to merely 28.3 percent in 2014. While PwC sees a slight decline in TV ad spend in Portugal between 2010 and 2014, ZenithOptimedia is predicting a 4 percent hike in TV advertising in Portugal in 2010 to $673 million and further growth to $771 million in 2012. PwC and other analysts also see healthy growth in the increasingly competitive multichannel landscape. PwC is predicting IPTV penetration will grow from about 2 percent of all Portuguese homes this year to 10 percent by 2014 and that overall pay-TV penetration will grow from 61 percent to nearly 72 percent of all homes in 2014. The market research firm Dataxis Intelligence reported that while the Portuguese TV market remained flat in 2009, the decrease in free-TV revenues was offset by growth in the payTV market. Furthermore, the advertising market in Portugal appears to be on its way to recovery, as free-TV revenues increased 6 percent during the last three months of 2009. During the same period, Impresa, Portugal’s leading media company and owner of the channel SIC TV, saw its advertising revenue grow, while revenues remained flat throughout the year for the public broadcaster RTP. So will PIIGS fly anytime soon? No. But even though they have to dig themselves out of difficult times, it doesn’t seem they will be stuck in the mud. 10/10
TELEFE_TV_EUR_2010_Layout 1 9/15/10 7:22 PM Page 1
EUR_1010_FRANCE_EUR_1006_ELLENDER 9/14/10 8:17 PM Page 2
30
TV EUROPE
e v i Va Différence!
L
Consolidation and a thriving DTT business are shaking up the French TV market. By George Winslow What a difference a year makes. Only last summer, parts of the French TV industry were looking more like a realityTV series than a thriving business. Desperate to improve its ratings and slumping share price, TF1 hired the head of RTL Group’s operations in France, Axel Duroux, to shore up its management team, raising doubts about the future of TF1’s CEO, Nonce Paolini. But RTL, which owns TF1’s main commercial rival M6, forced Duroux to wait three months before moving to TF1 and when he finally arrived in September, it was soon clear Duroux and Paolini did not get along. By the third week of October, Duroux was gone. This summer, however, Paolini—now secure at the top of the TF1 Group—was at the center of a much happier saga. Ratings were up in prime time, revenues jumped 14 percent and net profits climbed by 51 percent. And TF1 isn’t the only one seeing a rebound in its fortunes. The other major commercial broadcaster, M6, also reported 188
World Screen
better-than-expected results, with revenues up by 9.4 percent and consolidating operating income showing a 23.4-percent bounce. All in all, the French market got off to a good start this year. In fact, it will be the best year for French television since 2007. ZenithOptimedia recently revised its forecast, calling for 3.5-percent growth in 2010, which is higher than the 1-percent growth it had predicted in March. Even so, ZenithOptimedia is predicting total TV ad revenues will reach only €3.3 billion ($4.3 billion), way below the peak of €3.8 billion ($4.9 billion) seen in 2007. Encouraging forecasts can also be found for the multichannel and digital TV business, which analysts describe as one of the most competitive and innovative in Europe. “While the local broadcasters have benefited from the ban on advertising in prime time at the public broadcaster, France also has the benefit of being arguably the most competitive market for multichannel television in the world,” notes Brian Wieser, MagnaGlobal’s executive VP and director of global forecasting. “Fragmentation driven by the success of DTT reduces the audience shares of the major broadcasters but sustains more growth than there would otherwise be in advertising spending because multichannel TV encourages more viewing, which sustains the health of the television medium over the long run.” 10/10
TVMONDO_TVEUR_2010_Layout 1 9/15/10 7:22 PM Page 1
EUR_1010_FRANCE_EUR_1006_ELLENDER 9/14/10 8:17 PM Page 4
32
TV EUROPE
been a fairly stagnant multichannel landscape dominated by satellite providers and encouraged more people to adopt some form of multichannel TV, Piper and other analysts argue. DIGITAL OPTIONS
Public interest: Pubcaster France Télévisions features a broad mix, including France 1788 1/2 (above) from Europe Images and 19th Century Tales and Short Stories (right) from France Télévisions Distribution.
Zenith is forecasting that multichannel advertising will grow by 21 percent this year while PricewaterhouseCoopers (PwC) predicts it will grow from €257 million ($330 million) in 2010 to €344 million ($442 million) in 2014. France has also been leading the charge in Europe in creating low-priced triple-play offerings of video, phone and high-speed data, a development that has “created very strong pay-TV and very strong IPTV markets,” notes Ben Piper, the director of multiplay market dynamics at Strategy Analytics. The popularity of these low-cost bundles, which were first introduced by IPTV operators, and the introduction of DTT in 2005, are important because they’ve shaken up what had 190
World Screen
The French broadcaster M6 estimates that 47.6 percent of all French homes received free DTT services at the end of June 2010, up from 26.6 percent two years earlier, and that 16.2 percent of all French homes have subscribed to IPTV services, up from 11.6 percent at the end of June in 2008. “France Telecom and the Iliad Group have made major inroads [with their IPTV and triple-play packages] and in the process they have really invigorated a market that was a kind of status quo with satellite and cable,” explains Ben Reneker, a senior analyst at SNL Kagan. “Since the arrival of IPTV into the market, the pure-play DTH satellite systems that had dominated the market have been challenged to compete against the bundled offerings from the telcos and cable. As a result, we’re starting to see some innovative multiplatform strategies from Canal+ and DTT has become as an important force.” This intensified competition has also fueled overall growth in multichannel penetration. In June of 2010, about 93 percent of French homes had free or pay multichannel TV services, up from only 21 percent in January 2001, according to Médiamétrie data compiled by TF1. DTT is likely to continue to see growth over the next year with the switch-off of analogue signals, a process that started in February of 2010 in Alsace. Since then, Lower Normandy, Pays de la Loire, Bretagne, Lorraine, Champagne-Ardenne have followed. Shortly after MIPCOM, on October 19, Poitou-Charentes and the middle of the country will make the transition, with the final cutoff being slated for completion in November 2011. That cutoff will free up more spectrum for additional high-definition and pay-TV channels on the DTT platform. In 2008, four free channels and one pay highdefinition channel were launched on the digital terrestrial service, which is known as TNT (Télévision Numérique Terrestre) in France, and the French regulator CSA has announced plans for additional HD and pay services. Satellite delivery of the DTT offerings has also proven successful. By June of 2010, SES Astra reported that 2.3 million receivers had been sold for the free TNTSat service launched in 2007. Consolidation has also been reshaping the French TV market in recent years. Faced with growing competition from IPTV and digital terrestrial services, the three main cable 10/10
CARACOL_TVEUR_2010_Layout 1 9/16/10 9:59 AM Page 1
EUR_1010_FRANCE_EUR_1006_ELLENDER 9/14/10 8:18 PM Page 6
34
TV EUROPE
End of the rainbow: One of M6’s top performers is L’amour est dans le pré.
operators, Noos, UPC France and Numéricable, merged in 2006 and in 2007 the two main satellite DTH providers, TPS and CanalSat, combined their operations. “The [satellite] merger was really driven by the threat of the IPTV guys who have been pushing them around for a long time now,” notes Martin Olausson, the director of digital media strategies at Strategy Analytics. Over the last year, consolidation has continued with Vivendi tightening its hold on the Canal+ Group by buying out minority shareholders. In late 2009, it announced a deal to acquire TF1’s 9.9-percent stake in Canal+ France for €744 million and in February closed a deal to acquire M6’s 5.1-percent share for €384.2 million, boosting Vivendi’s stake to 80 percent. Both broadcasters have been investors in TPS and obtained their stake in Canal+ France as a result of the merger between the two DTH providers. Vivendi tried to buy Lagardère Group’s 20-percent stake but balked at the reported asking price of €1.4 billion. In July Lagardère announced plans to spin off its stake with an IPO, though a number of analysts have seen this as a negotiating ploy. Consolidation is also reshaping the programming business. Faced with criticism that it had been slow to move into the DTT business, TF1 acquired AB Group’s stakes in terrestrial channels TMC and NT1 for €192 million in September 2009. More deals may be in the works as France Telecom revamps its content strategy for Orange’s IPTV and programming 192
World Screen
businesses. The telco had aggressively moved into programming under then-CEO Didier Lombard, spending heavily to launch premium sports and movie channels. Lombard’s successor, Stéphane Richard, however, has been less enthusiastic about the fact that the telco has been spending about €400 million ($527 million) a year buying up exclusive TV rights to soccer and movies and this summer announced that the company wanted to focus on its core business. “Our objective is to find one or more partners,” for the channels, selling off as much as 50 percent of the equity, he told The Wall Street Journal in July. Since then, a variety of press accounts have reported that France Telecom is in talks with Canal+ about a potential partnership and that the telco has also contacted News Corporation about a possible deal for the sports channels. “Developing exclusive sports and movie content was very successful for Orange in that it allowed them to very rapidly build out their IPTV subscriber base, but they spent huge sums on content rights,” explains Olausson at Strategy Analytics. “You can look at it as the cost of building out this huge IPTV subscriber base, but at some point you need to start making money on that and they now see they can’t really sustain that.” TIGHTENING BUDGETS
Big changes may also be in the works for the public broadcasters. In May 2010, President Nicolas Sarkozy personally selected a new head of France Télévisions, Rémy Pflimlin. 10/10
ARTEAR_TVEUR_2010_Layout 1 9/15/10 7:30 PM Page 1
EUR_1010_FRANCE_EUR_1006_ELLENDER 9/14/10 8:19 PM Page 8
36
TV EUROPE
Young at heart: TF1 regularly programs TV movies such as Teen Mom.
Although Pflimlin hasn’t yet outlined his plans in detail, it is clear that the channels will continue to face tight budgets. A 2009 law abolished commercials on the public channels between 8 p.m. and 6 a.m. and the channels are supposed to get rid of all advertising by 2012. To cover that loss of revenue, the French government has increased its subsidies by 18 percent in 2009 to €2.5 billion according to PwC. But it expects those subsidies to rise by only 1.3 percent a year between 2010 and 2014, which would make it difficult for the public channels to cope with rising programming costs. TAX TIME
To bring in additional money, the government is imposing new taxes on broadcast channels and electronic communication, a move that has been vigorously opposed by the broadcasters and pay-TV operators. The European Commission approved the subsidy but broadcasters and local operators have filed appeals against the tax with the European Court. More limited programming budgets also seem to be the norm at the commercial broadcasters. Despite the improved TV ad climate and the fact that they are no longer competing with the public broadcaster for prime-time ad revenue, both TF1 and M6 not only face increased fragmentation that will cut their audience shares in the years ahead, but a generally sluggish ad climate as well. MagnaGlobal, for example, is pre194
World Screen
dicting only modest growth over the next few years with TV ad spend in 2015 expected to be about €3.51 billion, which would still be below 2007 levels. In response, both broadcasters have been cutting budgets. M6 cut costs by €36 million in 2009 and in the first half of 2010 programming costs rose by only 5.3 percent to €156.3 million, slower than the channel’s revenue, which increased by 7.7 percent. TF1’s programming costs increased by 6 percent in the first half of the year, thanks to the hefty fees paid for the FIFA World Cup, but if one-time sports rights were removed, overall programming costs actually declined by 7.2 percent to €422.5 million, with TV dramas (down 6.8 percent), movie rights (down 23.8 percent) and youth programming (down 18.3 percent) taking particularly notable hits. Meanwhile DTT channels, which saw their advertising revenues jump by 38.4 percent in the first half of 2010 according to M6, are increasingly looking to commission original programming. “Most of the advertising has remained with the major broadcasters but DTT is certainly gaining in terms of audience,” notes TV France International’s executive director, Mathieu Béjot. “While DTT is still fairly marginal in terms of producing new content, it is growing and DTT channels realize the need for original programming [especially in prime time].” 10/10
MARCDORSEL_WS_1010_Layout 1 9/16/10 7:58 PM Page 1
EUR_1010_GERVAIS_EUR_1007_BODLE 9/17/10 3:49 PM Page 2
38
TV EUROPE
Palace. We invented class, and now we’re inventing new classes, and the latest one is this insatiable need to be famous or a celebrity. They did a survey in England amongst 10-year-olds and asked them what they wanted to be when they grew up, and they said famous. That’s terrible, and it’s getting worse. Andy Warhol couldn’t have known how prophetic his statement was, people do want their 15 minutes of fame. But now they plan it and they know when their 15 minutes is going to be.They get an agent. They go to Big Brother or much, much worse reality shows. They’ve been watered down so much. When I first watched Big Brother I thought it was an amazing social experiment. Now it’s 12 Ypsilon minors wanting to go in, wanting to show as much flesh as they can, sell their story when they come out quickly and capitalize on it. And it’s eating itself, it’s being watered down. Now there are celebrity shows with siblings of celebrities or next-door neighbors of celebrities. I don’t know when it’s going to stop. It’s a sort of a homeopathic approach to fame. [Laughs] It’s extraordinary. There’s something quite sad about it, but I don’t know whom to blame. Shame on all of us, shame on the people who are so shallow and ignorant, shame on the people who exploit them, shame on us for watching, shame on the papers who drag them over the coals. But I don’t know what to do really, because these people want to live their life like an open wound, and they’ll never be famous enough. I don’t think there is a difference between fame and infamy. People bring up awful things if they think the paper will be interested or get them column inches. They tell the most awful things about themselves. If I see a celebrity telling their deepest, darkest secret, I want to go, “Don’t print it. Don’t print it. Don’t pander to it.” Because the more you do the more people want to read about it. And it’s lifting the toilet seat of life. There’s nothing wrong with being famous, as long as you’re famous for something or as long as it’s an upshot of something you do, but not the aim. It really does seem like a strange thing to reach for the symptom.
Comedy…Obviously
Ricky Gervais Ricky Gervais and Stephen Merchant were complete nobodies when they walked into the BBC and pitched their idea for a mock documentary about a workplace. The Office premiered in July of 2001 and is considered one of the most perfectly crafted comedy series in British television. In this exclusive interview, Gervais shares his views on life, society and making people laugh.
By Anna Carugati
TV EUROPE: The difference between classes has been a
theme in British television, hasn’t it? GERVAIS: British sitcoms have always been about class, really,
from Dad’s Army, which was about the middle-class person being of lower rank to the working-class person but the working-class person still felt threatened by him because he was educated and had the social graces, to Fawlty Towers. Basil Fawlty wanted to move up a class. He didn’t want the riffraff, as he said. He wanted to mix with lords and ladies, and that’s true of British society. Before people aspired to be invited to Buckingham Palace. Now they want to go to Beckingham 196
World Screen
TV EUROPE: Even in your “comedy of embarrassment,” you’re always going for some fundamental truth about how we behave or how we think. GERVAIS: Absolutely, truth is a theme for many reasons. Even if the truth is ugly, it doesn’t mean it’s not true. And I say things that put me at risk for being very unpopular. Just not saying something doesn’t make it not true. I have always gone to taboo areas as well as discomfort, but hopefully for comic effect, not to just make people feel uncomfortable. I hone in on the excruciating social faux pas, the minutia of 10/10
EUR_1010_GERVAIS_EUR_1007_BODLE 9/14/10 8:14 PM Page 3
TV EUROPE
human behavior that everyone identifies with. I was always brought up being told to write about what you know. I’ve always done that. I’m on surer footing. If you write about what you know and it’s a labor of love and you’re passionate about it and it’s a single vision, you’re probably going to create something that hasn’t been done quite like that before. And if you do it for yourself, there are six billion people on the planet, enough of them are going to go, “Aha, that’s my favorite program.”Whereas if you second-guess people and go for a huge audience and make it anodyne, safe and populist, sure, you might get more viewers for a while, but it’s white bread. All my favorite things have been acquired taste. I’ve had to work at them; they didn’t hit me like bubble-gum pop. Things like The Wire on TV, the
most audacious piece of programming ever. Radiohead. That lasts a long time. There are a million songs and one could be a hit, but you could replace them with a thousand other songs. It’s just filling a gap. And an awful lot of TV is filling a gap in the schedule. TV EUROPE: They say TV is what happens in between the
commercials. GERVAIS: Well, that’s exactly right. People get promoted in
TV if they make a program. Doesn’t matter if it’s good or bad, if they made a program, they get to make another one! And that’s not putting down the state of TV. It’s always been that, really. Now there’s more time to fill. But let’s get this straight, in anything—art, technology, commerce, anything you’re doing or creating—by definition, 90 percent of it is okay to bad. But you’ve got to say, “I want to be in that top 10 percent,” even though you might even lose the 90 percent of people that like the other stuff. TV EUROPE: Where do you tend to get your ideas? GERVAIS: I get ideas from real life and people. It’s a funda-
Taking the heat: In addition to his TV and film projects, Gervais continues to do stand-up comedy shows in the U.S. and the U.K. 10/10
mental rule of comedy and drama that there has to be a human aspect.You can’t find anything funny or interesting unless it’s personified in some way, because comedy and drama are about empathy. It’s about understanding what that person you’re watching feels, and you’ve got to care about them. Specifically comedy is a branch of drama—they’re the same thing, really. The dictionary definition is one ends in a wedding and one ends in death. [Laughs] You can’t really laugh at people you don’t like. Comedy is strange because the mechanics of comedy have to be intellectual, they can’t be emotional.You can’t laugh at someone if you don’t like them, you don’t trust them and you don’t find them funny. But again it’s about where you’re at in the story. I think if a comedian comes out and tells you a thousand of the best one-liners, that are great puns, that play on words, beautiful piece of mechanics, you laugh as a reflex action. He could throw in a false punch line and I think you’d still laugh because you’d be in the rhythm and it would wrong-foot you. As good as those comics are, you’ll look at your watch after 20 minutes. Instead, if someone shambles out and says, “I’ve had a terrible day,” You’ll say, go on. It’s our job as comedians to let the audience know we have had as bad a day as they’ve had and let’s laugh about it.You mustn’t be above the audience. You mustn’t go out there and be macho or sexy or better. That’s boring. There is nothing World Screen
197
39
Tooning out: The Ricky Gervais Show on HBO is based on popular podcasts recorded by Gervais and collaborators Stephen Merchant and Karl Pilkington.
EUR_1010_GERVAIS_EUR_1007_BODLE 9/14/10 8:15 PM Page 4
40
TV EUROPE
est superhero ever invented. But let’s be clear, he was invented. And it’s a lovely way to live your life, by all those values. I was brought up a Christian, and they are great values: Treat everyone equally, do as you would be done by, forgiveness, great. Then you get to religion and people begin to cherry-pick a little bit. Then they start to decide what the Bible means. Then they start to be able to vote on what bits they live their life by. Then it gets into all sorts of difficult territories. If you do this you go to hell, unless you say sorry. Say sorry once a week if you want. Then start again. I mean, really? That’s okay, is it? And I think that as an atheist, I probably live my life better than most Christians and there’s a big statement.
I’ll drink to that: The Invention of Lying, released by Warner Bros., was written and directed by Gervais.
remotely funny about an unfeasibly handsome brilliant person doing things well and having a great life. It’s instantly not funny. And I play on that. I play out the card that I am better than the audience. But they clearly know this is a character and it’s satirical because I always end up being the butt of the joke. I always end up getting something wrong.They’re laughing at my total misinformation. Empathy is important in comedy. So a lot of my ideas come from, “There but for the grace of God go I.”There’s a little bit of [David] Brent [Gervais’s character in The Office] in all of us. We’re all a putz now and again.We all worry about how we come across. And that’s funny. But in real life it shouldn’t be like that. Because reputation is what people think of you. Character is what you really are. And it’s difficult. If someone says something about me in the press that’s not true, the first thing I want [to do] is to stand up and go, “No, you’re wrong.” But then you think, Who cares? Why am I worried? It’s difficult. TV EUROPE: Because you get caught up. GERVAIS: Well, of course. Someone could say, “He’s not
funny. I’ve never found him funny. His face makes me want to smash the TV in. He revolts me.” All those things are fine. But they can’t say, “I saw him eating squirrel at The Ivy.” I go, “No, no, no, that’s a lie.”You can have your own opinions but you can’t have your own facts. Because there’s a total injustice with lying. It’s awful. In the film The Invention of Lying we put forward the case of the white lie, the good lie. But let’s all know that it’s a lie. I suppose the most controversial and poignant bit in the film is when I discovered that I can lie in a world where no one else has ever been able to lie and I use it for good. Where my mother is dying and I tell her there is a heaven. TV EUROPE: To comfort her. GERVAIS: Yes. A belief in an all-powerful being that is good
and fair, omnipotent, omniscient, is a beautiful idea. Great198
World Screen
TV EUROPE: What can you tell us about your new show, Life’s Too Short? GERVAIS: It’s the third in the trilogy of the Gervais/Merchant narrative comedy: The Office, Extras, Life’s Too Short. It’s still about the excruciating social faux pas, taboo, middleclass angst, dealing with difference. The Office had a huge emotional strand; it was a romantic comedy, really. People tuned in for David Brent and stayed tuned in for Tim and Dawn. Extras moved into dramatic territory with a quite poignant similar satire. It was continuing to study fame.This guy had these ambitions and they changed him and now he wanted to redeem himself. Redemption—a good Christian value—is not only a wonderful thing in real life but an amazing dramatic vehicle. It’s just great. If you look at what I’ve done there’s always been that sort of strand: feel a little bit sorry for him, bit of a putz, underdog, does well, becomes an asshole, says sorry, back to square one.You know, that’s life.That happens all the time. But Life’s Too Short is different. If The Office was 50/50 comedy/emotion, Extras was 70/30 comedy/poignancydrama and Life’s Too Short is 100 percent comedy. It’s just about what’s the funniest thing that can happen. It’s about the life of a showbiz dwarf played by Warwick Davis who really is a showbiz dwarf, obviously. And it’s not just funny because of the situations he gets himself into—an alternative title could’ve been, Hoist with His Own Petard—it’s funny because he’s got small-man complex. He brings it on himself. He’s manipulative, jealous and ambitious and the world hits him harder than he hits the world. But we have to let people know they can laugh at him.We don’t want people to think it’s funny because he’s short. It’s funny because he’s pretentious and manipulative and has a huge blind spot. That’s why it’s funny. TV EUROPE: Do you ultimately work to please yourself? GERVAIS: Only, only to please myself. That way you’re
bulletproof. If you start trying to please other people, then you can fail. If you’re only trying to please yourself you can’t fail. It’s impossible [to fail] if you get your own way. So for me, success is getting my own way, having the show turn out like I want it. Then anything else that happens doesn’t matter. Selling out is one thing, but selling out and still failing, I couldn’t get over that. 10/10
CASANOVA_TVEUR_2010_Layout 1 9/15/10 7:31 PM Page 1
BRIGHTCOVE_WS_2010_Layout 1 9/14/10 6:47 PM Page 1
BRIGHTCOVE_WS_2010_Layout 1 9/14/10 6:48 PM Page 2
EUR_1010_KREIZ_MAIGRET_EUR_1007_BODLE 9/14/10 8:20 PM Page 2
44
TV EUROPE
business. In the past we had been active in just a few markets, mostly in Italy, Spain and Holland, but through our recent expansions we are also in a strong position in Germany, Russia, India, Australia and the U.K. In 2009 we produced 1,800 hours around the world and in 2010 we expect to be producing 2,000 hours, and counting. TV EUROPE: Endemol can be compared to a creative factory.What have you found to be the best way to nurture that creativity and get the various companies to share information, ideas and know-how? KREIZ: [That’s] a good question. This is really one of the most important things we do and we always try to do it better: share ideas, foster the exchange of creativity, know-how and best practices. It’s something that we are constantly focused on within the company.There is no one magic formula for it. It’s the culture; it’s in the DNA. As we’ve mentioned in the past, we refer to ourselves as the world’s biggest brainstorm. It’s creative people getting into a room, sharing ideas, experiences, points of view, cultures and different perspectives. You shake, stir and mix it up and you get some good shows out of this process! TV EUROPE: Are you finding business mod-
els that work for some of the new-media platforms, such as websites and mobile? Are they making money yet, or is their function primarily to support your properties and offer viewers new ways to experience and connect with what you produce on TV? KREIZ: It’s a combination really. Some areas are already profitable, like gaming or sponsorships. It’s still early and so far there is no one proven model, but there are many opportunities out there. This is why we recently launched Endemol Worldwide Brands, which integrates all of our digital activities into the operations of the company. We used to have a stand-alone digital department, but now everything digital is embedded into our core activities. We think digital from the outset as we create shows. Probably one of the best examples of this is The Money Drop, which was developed by Endemol U.K. While the show is on air, people simultaneously play games online.The show was first commissioned as a five-day event in prime time on Channel 4 in the U.K. and during that period we had 450,000 people playing the game on their computers live in parallel to the broadcast. The show became one of the most discussed TV shows on Twitter, worldwide, generating up to half a million tweets in one day. So it’s quite a phenomenon. It’s now being rolled out worldwide and already picked up by FOX in the U.S.This is a classic example of an idea that from the outset was created as a combination of a television experience and a strong online component.
On the Importance of Branching Out
Endemol’s Ynon Kreiz Endemol is mainly known for hit formats such as Big Brother, Deal or No Deal and Wipeout. Chairman and CEO Ynon Kreiz must ensure the company continues to act as a creative factory generating innovative and appealing programming ideas, but he is also focused on finding new business opportunities online and in scripted programming.
By Anna Carugati
TV EUROPE: What drove the decision to get into scripted programming and how has that business been performing? KREIZ: Our scripted business has been doing very well recently, even better than what we planned for. And we had very high expectations! We decided to move into scripted because historically it was an area we hadn’t focused on, but as you grow, you look to diversify your offering and expand into new lines of 202
World Screen
10/10
DORI_TV_EUR_2010_Layout 1 9/15/10 7:31 PM Page 1
EUR_1010_CORIDASS_EUR_1007_BODLE 9/14/10 8:13 PM Page 2
46
TV EUROPE
International Appeal
ZDF Enterprises’ Alexander Coridass that’s good, because we have to invest tens of thousands of euros for the production of these Internet offerings. We also produce original content for the web, based on our existing programming. We have a number of video clips, 90second versions of our TV documentaries. For example, when Ramadan started, we offered ten clips of different aspects of Ramadan.The production of such clips is quite expensive, but we keep working on optimizing [it].We sell them as straight deals or we agree on a share of the ad revenues. Our direction is very clear: we must offer this content and we will even enlarge the field of our activities, but I must add that the financial outcome of content on the Internet is still open and nobody has found the final business model yet. TV EUROPE: Are you finding that in a tough economy, co-
productions are becoming more necessary? CORIDASS: I am always a little reluctant to say that if you
As the commercial arm of one of the world’s leading public broadcasters, ZDF Enterprises (ZDFE) is able to offer buyers a wide range of high-end programming, spanning from drama series and TV movies to documentaries and children’s. President and CEO Alexander Coridass talks about the benefits of a long-standing commitment to quality.
By Anna Carugati
TV EUROPE: What has been the strategy for ZDFE’s growth? CORIDASS: We started as simply the distributor of a major
broadcaster, ZDF, but that equipped us with a pretty broad range of great product: top-quality German TV movies, drama series, documentaries and other genres. Then over the years we enlarged that original catalogue by acquiring additional genres, partly shot in English. The acquisition of rights of our own is a very important issue for us, particularly for children’s cartoons and teenage live-action shows. So during the last ten years we have systematically enlarged our catalogue with programs from other sources, in particular high-profile international co-productions but also with acquisitions. We achieved that goal because national and international partners trust our distribution capacity and policies. TV EUROPE: Are you finding a great demand for content on
new-media platforms? CORIDASS: It goes without saying that if you sell series or
event movies or big documentaries you must offer Internet content—a B-to-C [business-to-consumer] website—so that television buyers can tailor it to their needs. This is an additional service, which is simply expected by our clients. And as long as clients are ready to pay for the content we offer, 204
World Screen
have financial problems you should try to collect money elsewhere so you can complete your budget. That is never a strong enough reason for a co-production. First of all you have to bear in mind that co-productions are complicated. It starts with the different editorial priorities and it goes on with the production and legal aspects. So co-productions are horrible but they are also awesome. It’s so great to have different input and different styles of production. Of course, it’s nice to have additional money, but the decisive point is: there must really be a synergy—one plus one must equal more than two. If it’s only two and you have to divide by two you end up with one again. So there must be something—an actor, a plot, a location—that you wouldn’t have [on your own]. TV EUROPE: What titles are you highlighting at MIPCOM? CORIDASS: The main focus is obviously on children’s pro-
grams.We have a range of very interesting and innovative new productions, some of them already internationally successful in previous seasons. These include The Elephant Princess, the third season of H2O: Just Add Water, both live-action series, as well as our new animated series Ludovic, Tempo Express and the third season of Laura’s Star. In fiction, our focus is on new romantic TV movies based on books by well-known novelists such as Katie Fforde, Emilie Richards, Barbara Wood, Inga Lindström and Rosamunde Pilcher. We are also distributing two romantic soaps with more than 530 episodes altogether: Hanna: Follow Your Heart and Forbidden Love. In documentaries, we will present the finished programs License to Drill, Delta Divers, Hitler’s Lost Battleship and Animal River Challenge. For pre-sale we will offer the spectacular underwater-documentary Adventure Ocean Quest and we will be speaking to potential co-production partners about new projects in development: The Last Yakuza and Where the Bombs Fell. 10/10
VENEVISION_TVEUR_2010_Layout 1 9/15/10 7:32 PM Page 1
IMPS_TVEUR_2010_Layout 1 9/15/10 7:33 PM Page 1
272 eps x 24 min http://tv.smurf.com I.M.P.S. Rue du Cerf 85 B-1332 Genval (Belgium) Tel.: +32 (0)2 652 02 20 Fax: +32 (0)2 652 01 60 www.smurf.com imps@smurf.com