Zodiak’s Svensk

October 2007

By CONTACT _Con-3F4A1850B c s l Mansha Daswani

Firmly established as one of Scandinavia’s leading production-and-distribution firms, Zodiak Television has spent the last year actively expanding its reach into new markets. It has set up a dedicated office for the Russian and CIS markets, Zodiak Vostok, and acquired stakes in several companies in that region, including TeleAlliance in Russia and YS Film in the Ukraine. It also took control of Diverse Production in the U.K. and Yellow Bird in Sweden, among other companies, and established a new-media division, Fifth Element. This fall, the company’s commercial arm, Zodiak Television World, is relocating from Copenhagen to London following Zodiak’s most recent purchase—that of Bullseye Television, which will become the new base for the company’s distribution activities. Zodiak’s CEO, Patrick Svensk, talks to TV Formats about the achievements so far and what’s still to come.

TV FORMATS: You’ve made quite a number of acquisitions recently. Why have these been important for the company?

SVENSK: We believe in building a global group. We believe in putting content and companies together to exchange and share ideas. [Expanding beyond] the Nordic territories, there were two very important steps for us. The first was the Eastern step [into Russia and the CIS], and then the Western step [into the U.K.] Our east wing is able to contribute to and take part in the tremendous growth that is coming out of there. The west wing enables us to get a strong foothold in the U.K. and the U.S. Zodiak is a different group than it was just a year ago.

TV FORMATS: How is your business in Russia doing?

SVENSK: Fantastic. In terms of turnover, our operations, which we now own 51 percent of, had $8 million turnover in 2005; in ’06 it was $18 million; this year it’s going to be $44 million. Russia has become our largest market. Channel One in Russia is our largest client. Just a couple of years ago we were seen as a Scandinavian [company]. Now people understand that Sweden and Scandinavia are going to be a smaller portion [of our business]. The U.K. [is our] third-largest market and is growing.

[We see growth opportunities in] other Russian-speaking territories. We have a minority stake in a production company in Poland that is now starting to take off quite well. We see very positive changes in the Polish television environment.

TV FORMATS: What about other emerging markets?

SVENSK: We’re looking at [Asia and Latin America]. We haven’t made any real efforts yet. There are markets, such as India, which are enormously interesting. We’ve sold formats to India before, but we have to get to know the market. Latin America is covered by agents at the moment, but there might be some opportunities for us.

TV FORMATS: How’s your business in the U.K. with Diverse?

SVENSK: Diverse was a great opportunity for us to enter mainly the U.K. market, but also to take a small step into the U.S. market on the East Coast [with an office in New York]. Just two years ago it had a turnover of �5 million ($10 million); last year it was �10 million ($20 million); this year we’re looking at �15 million ($30 million) for the calendar year.

Diverse has a history in factual [programming]. We’re now looking at expanding into other segments as well, [by] making other investments in the U.K. but using Diverse as a hub. More general entertainment, game shows, scripted [content], especially comedy. We often enter one country, set up a hub and then try to make as complete an offering for the market as we can.

TV FORMATS: What are your plans for scripted programming?

SVENSK: The scripted side is one of the most interesting stories that might not have been told about us yet. We have a history from Sweden and Scandinavia of producing a lot of comedy. We’ve done 80 percent of all daily soaps ever produced in Sweden. On top of that, we bought Yellow Bird in February. It’s a purely scripted company with a business in the production of movies (both for theatrical release and TV movies). Looking at our Russian operations, we are by far the leader in daily scripted programming. I think 20 to 25 percent of our business going forward will be scripted.

TV FORMATS: How are your production companies working together?

SVENSK: They are working together on two things: sharing ideas and sharing best business practices within new segments. On the first point, we have a chief-creative-officer network, which comes together a couple of times a year for three or four days. But then we are continuously sharing ideas, sharing formats with each other, through newsletters and online screening systems. It’s worked quite well, actually. And then on the best business practices, [one example is that] Fifth Element is working on new media, online [content], and then we transfer [that expertise into other areas such as] advertiser-funded programming. One market often takes the lead and then we try to implement [its practices] into new markets.

TV FORMATS: How are you looking to expand Zodiak Television World?

SVENSK: We definitely see growth potential there. It originated seven or eight years ago by basically exploiting the clips catalogue. And then we moved quite quickly into formats and it’s been successful, especially since we’ve added new companies to the group. Now we’ve moved into the U.K. and Russia, and with the acquisition of Yellow Bird, that signals our step into finished programs alongside formats and clips. That will be the next step, to do our own sales in movies and high-profile drama.