2010: Year in Review

NEW YORK: As 2010 comes to a close, World Screen Newsflash takes a look back at some of the stories that defined the year in media, and what they could mean for trends in 2011.

CHANNELS VS. PLATFORMS, REDUX
There were certainly spats between cable and satellite operators and channels in 2009, but those couldn’t compare with the seemingly endless disputes that made headlines this year. Every other month, a pay-TV provider was complaining about exorbitant renewal feels, while broadcasters and cable networks vented about inadequate compensation for their content.

Indeed, the year was filled with a series of channel blackouts (Scripps Networks on Cablevision and U-verse, Versus on DIRECTV, Hallmark Channel on U-verse, FX and Nat Geo on Cablevision) or near misses (FOX, Fox Soccer Channel and FX on Time Warner Cable; ABC on Cablevision; The Weather Channel on DISH Network; AMC, IFC and WE tv on U-verse).

In response to these disputes, a number of U.S. pay-TV providers, including Time Warner Cable and DIRECTV, filed a petition with the FCC calling for a new set of rules governing retransmission consent disputes. They also banded together for a coalition to battle against broadcaster blackouts during retransmission fee disputes.

SEEING THREE DIMENSIONALLY
This was the year that 3D TV became a reality, spurred by the massive box-office and Blu-ray DVD success of Avatar. ESPN launched a 3D channel in time for the World Cup, Sky in the U.K. launched a 3D offering with English Premier League coverage, Poland’s nShow 3D made its debut this month…by year’s end, it was estimated that 50 broadcasters and pay-TV operators would be offering 3D television services to the home.

Announced this year and due to launch in early 2011 is a new 3D network from Discovery Communications, IMAX and Sony. Other channels are likely to follow suit, as sales of 3D television sets begin to pick up. Recent reports indicate that the number of 3D TV shipments worldwide is set to reach 41 million by 2014.

BIG IN BRITAIN
Three out of the U.K.’s big four broadcasters experienced major management overhauls in 2010; Adam Crozier took the reins at ITV, David Abraham took over at Channel 4 and Five is now owned by Richard Desmond’s Northern & Shell. The ramifications of those changes will continue in 2011. In addition, the world will be watching to see how the BBC copes with its license-free freeze, as is struggles to continue to generate high-quality content that serves the public’s interest. The fate of BBC Worldwide will also likely make headlines, as will News Corporation’s bid to take a majority stake in BSkyB. Also looming in the U.K.: the February introduction of product placement.

EURO SHIFTS
On the rest of the continent, concerns remain about the impact of the Euro debt crisis, yet as the year came to a close, the region’s major media companies appeared to be relatively healthy. A recent study from the European Audiovisual Observatory found that revenues at Europe’s main commercial broadcasting groups were back to pre-recession levels, with a 10-percent growth rate in the first half of the year.

The year also saw many of the region’s big guns getting bigger. BSkyB early in the year lost its appeal over keeping its 17.9 interest in ITV, but later in the year scooped up Virgin Media’s portfolio of cable channels, led by the flagship LIVING. Liberty Global took over German cable-TV platform Unitymedia and Polish platform Aster. HBO consolidated its ownership of its Central European operation. Central European Media Enterprises acquired the Bulgarian free-to-air commercial broadcaster bTV from News Corporation, as well as two sister cable networks. ProSiebenSat.1 Group (which itself could change ownership hands this year, some reports indicate), took 100-percent control of the maxdome VOD portal. Europe’s big independent content creators also had a tremendous year, with expansion for FremantleMedia, Endemol, Zodiak, Banijay and Shine Group.

CHANGING HANDS
North America saw its fair share of mergers and acquisitions activity. In the U.S., Comcast and GE, after announcing their new JV for NBC Universal at the end of 2009, spent the better part of 2010 making their case for the new ownership to U.S. regulators. Comcast is confident of securing approval for its takeover of NBC Universal, announcing a new management structure that includes Steve Burke replacing Jeff Zucker. It is still unclear as to when the deal will finally go through, but most see it likely being approved in the early part of 2011.

MGM, heavily in debt, filed for bankruptcy protection and is now majority owned by its creditors, with a minority stake in the hands of Spyglass Entertainment. Its CEOs, Roger Birnbaum and Gary Barber, will be taking the reins at the studio, home to still valuable commodities like the James Bond franchise and The Hobbit.

Lionsgate fended off Carl Icahn’s advances all year and ended the year with a victory over the billionaire financier; its entire board was elected over the slate put up by Icahn. This dance, however, is not over, with Icahn still unhappy with how the studio is being run. His overtures will undoubtedly continue in 2011.

Former indie Miramax is independent again, following its sale to a consortium of investors by The Walt Disney Company. Soon after the deal closed, Miramax was back in business with its founders, the Weinstein brothers.

And up north, Shaw Communications took a controlling stake in the restructured Canwest Global, while Bell is taking full control of CTV.

A WINDOW A DAY
Managing release windows became a key issue for the studios this year, as online streaming continued to erode DVD sales.

Netflix became a poster child for new-media business models as it locked in content deals with the studios to make movies and TV shows available for online streaming to subscribers. Most notable were its agreements with Starz and EPIX. The deals with the major Hollywood studios, meanwhile, included a 28-day delay on new releases—a stipulation also included as the studios made peace with DVD rental kiosk operator redbox. That delay was an attempt to maximize on-demand revenues in the wake of heavy falls in DVD rentals and sales this year. (DVD rental giant Blockbuster filed for insolvency in September.

On-demand certainly became a force to be reckoned with in 2010. By 2013, movie-on-demand revenues for pay-TV operators will reach $2.4 billion in the U.S. and 430 million euros in Western Europe, Futuresource Consulting indicated in a report.

Also a force to be reckoned with this year was the revolutionary iPad, unveiled in January. Ahead of its release, media companies rushed to offer up apps to deliver content to the popular device. The iPad is no longer the only tablet on the market, but it is likely to remain the frontrunner for some time. Apple TV, the set-top box to deliver Internet content to the television set, has also been a hit; the device is expected to have sold 1 million units by the end of this week.

Less noteworthy was Google TV, which has yet to live up to expectations after being blocked by a host of media companies. Hulu, meanwhile, has introduced a subscription service, which, as of now, is said to be struggling.

THE CORD CUTTERS
The jury is still out as to what impact the proliferation of online streaming, tablets and content-download services will have on the old-media model of pay TV. Nielsen and CTAM recently said that TV content online is supplementing, not eroding, traditional media consumption, with just 3 percent of people who watch programming streamed from the Internet reporting that they will become "cord cutters" and cancel their pay-TV subscriptions

Pay-TV operators in the U.S. are looking to shore up their bases with TV Everywhere, allowing subscribers to access content on multiple devices. Whether this can stem the slow erosion of customers remains to be seen; the number of people subscribing to pay-TV services in the U.S. fell by 119,000 customers in the third quarter of this year, as compared with the 346,000 additions in the year-ago period.

Nonetheless, pay-TV is booming in other parts of the world. Consumers worldwide will continue to spend on TV subscriptions, reported PricewaterhouseCoopers in its five-year outlook this year, forecasting a 7.5 percent compound annual growth rate in television subscription revenues to reach $210.8 billion by 2014. And the number of pay-TV subscribers worldwide will grow from 688 million this year to 854.5 million in 2015, delivering a 5.7 percent CAGR for the next five years.

ALL GROWN UP
Buzz continued to abound about the world’s so-called emerging media markets; although many are, for the most part, all grown up. By 2014, 446 million homes in the Asia Pacific will be receiving pay TV, according to a report from Media Partners Asia this year. Not surprisingly, the rush of channels to the region went on unabated in 2010, with new launches from Turner Broadcasting, AETN, Scripps Networks and numerous others.

The Middle East also proved to be an alluring territory for major international media companies. News Corporation reached a deal to pick up a 9.09 percent stake in Prince Alwaleed Bin Talal’s Middle Eastern media group Rotana, while its Fox International Channels division partnered with twofour54.

In Latin America, Chilean free-to-air broadcaster Chilevisión was acquired by Time Warner from Bancard Inversiones, while Mexico’s Grupo Televisa made peace with Univision, acquiring a minority stake in the leading U.S. Hispanic broadcaster.

THE VIEW FROM CANNES
For the international distribution community, the story that dominated so many conversations this year was the Icelandic volcano that had MIPTV attendees stranded in Cannes for days. Indeed, six months later, at MIPCOM, the conversation often turned to: how long were you stuck for? And how did you get home?

MIPTV and MIPCOM were both strong markets this year, particularly as compared with the downbeat versions in 2009. At both events, international co-productions were the theme. From high-end drama to kids’ shows to blue-chip documentaries, international partnerships have become the go-to method for financing productions in the wake of reduced programming budgets. While the economy is certainly rebounding, ad revenues returning and content spending by broadcasters likely to increase in 2011, the need for multi-country co-productions is unlikely to be abating anytime soon.

THE YEAR AT WORLD SCREEN  
This year marked several landmarks for this trade publishing group. We celebrated our 25^th anniversary in April. We won the Gold Ink Award for best-printed trade magazine in the world. We launched two new publications—TV Middle East and Africa and TV Formats Distributors Guide—a website, TVKids.ws; and two new online destinations, TVCanada.ws and TVMEA.ws. We published a comprehensive guide to the Top 100 U.S. Cable & Satellite Channels, compiled by our new special projects editor, veteran reporter Jay Stuart. And our list of interviews was unparalleled: Sir Howard Stringer, Haim Saban, Simon Cowell, Hugh Laurie, Jerry Bruckheimer, David Shore, Shonda Rhimes, Ridley Scott, Jon Feltheimer, Mad Men stars Jon Hamm and Elisabeth Moss and so many more. So what’s to come from the content business’s leading trade publisher in 2011? Two new resources for the format business, TV Formats Weekly and TVFormats.ws, launching in January; upcoming reports on channels in Western Europe, Asia and Latin America; a new website for the factual business, TVReal.ws, and much more. Watch this space.