Deals on the Danube

June 2007

The proliferation of channels and growing ad markets in Central and Eastern Europe make DISCOP a must-attend event for many distributors.

By Irene Lew

When Rupert Murdoch’s News Corporation announced in April that it was making a $5-billion bid for Dow Jones & Company, owner of The Wall Street Journal, everyone in the media industry understood how Dow Jones would fit into News Corp.’s plans to launch a financial news channel. A few weeks later, News Corp. made another deal that attracted much less attention. It quietly acquired two television stations in Latvia—100 percent of LNT and 70 percent of TV5. While these acquisitions stirred none of the commotion that the Dow Jones bid did, they are a testament to the potential of the television markets in Central and Eastern Europe. News Corp., in fact, is not the first major media company to invest in the region, attracted by double-digit growth in advertising in most countries and a burgeoning TV industry.

The proliferation of channels, as well as the growing number of IPTV and VOD platforms throughout Central and Eastern Europe, bodes well for distributors and producers who are attending this year’s DISCOP. “New channels—digital, pay, and channels associated with the big terrestrial networks—are being launched [and] are looking for product,” says Veronika Gracher, the VP of sales for German-speaking Europe and Eastern Europe at FremantleMedia Enterprises (FME), who cites such specialty channels as TVN Style in Poland and the Italian cooking channel In Cucina TV. “[There are] a lot of niche channels, which means that you can cover almost all programming needs, because they’re all there.”

FORMAT FEVER

Local production, particularly of entertainment formats, continues to be the big draw for many broadcasters in Central and Eastern Europe. Take the unprecedented success of the BBC format Strictly Come Dancing, for example. The show pairs 14 celebrities up with 14 professional dancers. “It has done absolutely huge numbers for every broadcaster who has licensed it—and we’ve sold it to the biggest markets [as well as] to the smallest regions,” notes Monisha Shah, the director of emerging territories at BBC Worldwide. The format “requires a big budget and big ambition, but it has been so successful in so many regions that people feel perfectly comfortable in taking the risks [involved with an expensive production.] It’s classic family entertainment.” In fact, the local version of Strictly Come Dancing that premiered in October 2006 on Kanal 2 in Estonia garnered a 48-percent audience share. In Poland, the first episode was the top-rated show in its slot, scoring a 29-percent market share for TVN. Slovakia ratcheted up a 64.2-percent share for its first episode while Croatia obtained a 40-percent share for its premiere. In the Czech Republic, the debut on Czech TV achieved a 46-percent share. According to Shah, the popularity of dance formats like Strictly Come Dancing shows no signs of cooling down, and she is looking to close even more deals for the format at DISCOP this year.

The BBC also aims to secure deals for a similar series, Just the Two of Us, which is currently airing in prime time on BBC One and pairs celebrities up with singing professionals in a competition. The series has recently been sold into the Ukraine and Russia. This year, the BBC is bringing a range of other titles to DISCOP, including In the Night Garden, a 100×30-minute children’s series from Anne Wood and Andy Davenport, the partnership responsible for creating Teletubbies; the 3×50-minute documentary series Ganges, which captures the majestic scenery of the river; and the thriller docu�drama Superstorm, about a team of scientists who attempt to control the weather.

Currently, local drama adaptations also have a strong foothold in the Central and Eastern European region. “Buyers are looking for the next big thing, which at the moment is scripted formats of drama series for local adaptation,” says Jess Khanom, the VP of sales at the U.K.-based Outright Distribution. She points to the growing interest from broadcasters and producers for shows such as Footballers’ Wives, Waterloo Road, and the 8×1-hour Rock Rivals, which chronicles the highs and lows of the pop-music world.

In addition to formats, Outright wants to provide buyers with a broad range of finished programming, including the documentary The White House�Sex Downunder, which exposes the striptease industry, and wedding programs such as Your Wedding in Their Hands, which features one couple each week who gives total control of their wedding plans to their families.

“Although formats and scripts have a strong hold in Eastern Europe in general, there are still clients who are looking for finished documentaries, drama and other genres,” says Khanom. “We like to place ourselves in the market so that we can cater to everyone.”

MAKING A BIG BANG

Buyers in Central and Eastern Europe are also on the lookout for big-budget disaster films. “Action-packed disaster movies [that are] full of special effects remain high on Eastern European buyers’ shopping lists,” notes Dorit Schilling, the sales executive for Eastern Europe at Granada International. At DISCOP, Granada International will be bringing the Hollywood TV disaster movie Swarm. Tapping into buyers’ appetites for literary adaptations, the company will also be launching its The Jane Austen Collection, which includes the brand-new film adaptations of the author’s novels Mansfield Park, starring Billie Piper, and Northanger Abbey, and the relaunch of the Emmy Award–winning production Emma starring Kate Beckinsale.

This year, SevenOne International has a large volume of product, offering programs that include high-budget event fiction, catastrophe movies, adventure movies, family entertainment and fiction series. For Jens Richter, the managing director of SevenOne International, the company’s main priorities at DISCOP will be securing new deals for the local versions of entertainment formats such as The Successor, which aims to find the next mentalist in the tradition of Uri Geller, and the game show Beat Your Host!, which has already been sold to Spain, Italy, Romania, the U.K., Sweden, Finland, and the U.S. “Sciencetainment” formats such as Galileo and Clever! are also stirring up interest in the region. Richter hopes to extend the reach of Galileo, which has been sold to Russia, Poland and the Czech Republic, among others, and Clever is currently airing in Russia on Ren TV.

For FremantleMedia, the main focus at DISCOP will be Love You to Death, featuring Hairspray director John Waters, and the teen drama The Best Years, but it will also work on striking deals for its enlarged comedy catalogue, which includes The IT Crowd, That Mitchell and Webb Look and Man Stroke Woman. The sitcom Pulling and the cartoon sketch comedy show Modern Toss are on the roster as well. Gracher notes that these programs have the potential to do well at the market, as “comedy is one of the strongest genres” in Central and Eastern Europe, and there are many comedy niche channels popping up throughout the region. Comedy Central is beginning to cover more ground in Central and Eastern Europe. FOX Life is also actively looking for comedies, as are the big terrestrial broadcasters.

“We’re going back to our roots because we come from comedy with Mr. Bean and Benny Hill,” says FME’s Gracher. “The appetite in the market for comedies, sitcoms [and] live entertainment is very strong, so during the last few years it has been our focus to invest in a bit of comedy.”

On the factual end, Claudia Zell, a sales executive at Parthenon Entertainment, finds that buyers want programming that is not limited to a single genre. “Buyers are increasingly looking for ‘mixed’ genre shows, a trend we have also embraced,” says Zell. She believes that Parthenon’s slate for DISCOP presents a number of shows that fit this bill, including Fight Science, which combines science and sports; Ed and Eppa, a mix of wildlife and animation; and Doctor*ology, a 13×30-minute series that blends scripted comedy with medical science. According to Zell, the majority of Parthenon’s slate is produced in high-definition, which she believes will be a major advantage for Parthenon over other companies.

THE NEW-MEDIA MIX

Zell also notes that the demand for new-media rights such as IPTV and VOD, which can be sold in large, nonexclusive packages, is also growing in Central and Eastern European territories. According to a recent report issued by SNL Kagan, IPTV holds the potential to change the dynamics of the European multi�channel market. By 2016, Kagan predicts that European IPTV services will generate $4.9 billion in subscription revenues and account for 8 percent of the total multi�channel economy.

“We’ve already concluded an IPTV deal with TVN International in Poland and are currently negotiating several VOD deals with clients in countries such as Slovenia,” says Zell. “The demand for programming in HD is increasing throughout the region but especially in countries like Poland, where we’ve sold China Rises, a 4×1-hour HD series to Canal+.”

Beatrice Riesenfelder, the head of sales and acquisitions at the Austrian public broadcaster ORF, also expects to find more buyers who will be interested in acquiring content for VOD, and believes that the company is well positioned to meet that demand with a large stock of available VOD titles at DISCOP this year. “In 2006 there was an explosion of IPTV providers in Eastern Europe just as in the rest of Europe,” notes Riesenfelder. “Legal restrictions and uncertainty are still a handicap for most distributors, but ORF Distribution has already dealt with VOD for more than two years. [We] meet almost every technical standard requested by IPTV providers—which is definitely a unique selling proposition of ORF.”

ORF has always maintained close relations with its Eastern European neighbors. Over the past few years, the company has found that broadcasters in the region have shifted away from the “all American” strategy of acquiring programming and are actively looking for European content. ORF will be offering a range of programming that includes a first look at the script of the new urban mini-series Polly, which is based on Polly Adler, the famous main character in a weekly column in one of Austria’s biggest newspapers. Targeted at females aged 19 to 49, the series follows the struggles of a 40-year-old reporter. The pilot has already been picked up by TF1 in France. Special-interest documentaries such as Ol’ Man River and documentaries on climate issues such as Weather Lab, Azores High and Iceland Low: Europe Under Pressure are also part of ORF’s offering.

Continuing the trend of environ�mental-themed programming, Cineflix International’s DISCOP slate will be headed by Eco House Challenge, a 6×30-minute series that was launched at MIPTV this year. The format-based series follows two groups of families who are faced with the challenge of reducing their consumption to save the planet. According to Kate Llewellyn-Jones, Cineflix International’s sales manager for Central and Eastern Europe, the company is looking to secure sales for the series as a format and as a finished program. In addition, other factual entertainment formats such as Wedding SOS and Urban Legends will be offered, along with the returning docudrama series Mayday and the documentary Jonestown: Paradise Lost, about the cult leader Jim Jones.

At DISCOP, Southern Star International hopes to close deals for its long-running Australian serial drama Home and Away, and will be distributing a slate of TV movies that were produced by Carnival Film and Television for the BBC, including the thrillers Sea of Souls, Life Line and Empathy. Southern Star will also offer the series of TV movies Wire in the Blood, featuring Dr. Tony Hill, played by Robson Green, the clinical psychologist who solves crimes, and the documentary series Lemur Street. Jumping on the format bandwagon, the company also hopes that the Australian reality show The Block, about renovating apartments, will attract buyers in Central and Eastern Europe. “We sold that format to Russia last year and we’re continuing to get a lot of interest and [hope] to option the format in a number of Central and Eastern European territories,” said James Braham, a sales executive at Southern Star International. “On the back of the success of our show, other countries are looking to buy the format.”

TIME WELL SPENT

Many distributors are finding that DISCOP is a worthwhile market to attend—particularly with the launch of so many new channels in the region—and that it is a prime opportunity to strike up relationships with broadcasters in emerging markets in Central and Eastern Europe. While Parthenon’s Zell wants to ensure that “long-established relationships in the more mature markets of Eastern Europe” remain strong, the company’s “goal is also to grow [its] business in the up-and-coming markets.”

Outright’s Khanom agrees. “This is an important market as it is solely focused on Central and Eastern Europe, which allows for longer, more productive meetings. There are a vast number of buyers from the smaller stations that do not attend MIPTV or MIPCOM, so this is the perfect place to meet with them.”

However, FremantleMedia’s Gracher notes that despite the proliferation of channels in areas such as the Balkans and Bulgaria, one should still err on the side of caution. “The fact is that the advertising market has not grown with the number of broadcasters, so I think it’s dangerous to expect too high license fees from these markets [because] they will not be able to sustain that for a long pe�r�iod,” she says.

The BBC’s Shah has a more positive outlook on regional broadcasters. “We’re seeing huge growth, both in terms of the buying power that these markets have, but also in terms of the choices that they’re making,” Shah says. The BBC did its first co-production with Channel One Russia, a docudrama series entitled Space Race, in 2005, which also had additional co-production partners such as National Geographic Channel in the U.S., and NDR in Germany. “[This] was a fantastic statement of how Eastern Europe was very quickly becoming part of the international community in terms of its ambition,” says Shah. The BBC recently signed a deal with Channel One Russia for Diana: Last Days of a Princess.