In Search of a Good Deal

After a disastrous year when double-digit declines in TV- advertising revenues were as ubiquitous in Europe as double-digit unemployment rates, European buyers are hoping for a better year as they head to MIPTV. Some admit that the economic woes have hurt their acquisitions budgets and shortened their shopping lists, while others contend that their budgets have remained stable.

BRITISH BUYS
In the U.K., Jeff Ford, the managing director of digital channels and acquisitions at Five, admits that the economic problems facing British broadcasters have “absolutely knocked us for six. The way we buy and build schedules has been totally hit by the recession. We don’t have the same amount of money we had six months ago, a year ago or two years ago across all the channels.”

Still, acquired programming remains important at Five, as well as the digital channels, Fiver and Five USA. American shows have always played an important role in Five’s schedule, which has been revamped over the last year to target a younger demo. “We have had the top American shows, crime shows in particular, for a while, but in the last year we have been trying to extend that by acquiring programs that are very 16-to-34-friendly,” Ford says. To attract those younger audiences, Five has acquired a number of movies and the U.S. series FlashForward. For the digital channels, Five USA’s programming-and-acquisitions strategy continues to target an up-market, male-skewing audience with such programming as CSI, Sons of Anarchy and Justified that is intended to be “a celebration of everything that is brilliant about American TV,” according to Ford.

More noticeable changes can be found at Fiver, which is a younger-female-skewing channel that reruns a number of shows that air on Five, including the Australian soap Home and Away. To give the channel more of a distinct personality, Ford explains that in the last six months “we’ve been looking for shows that have a much more positive, fun spin” and have acquired such shows as Melrose Place, Burn Notice and Archer.

With the market’s economic problems, Ford notes, prices for top films and series have dropped. “They’ve been brought down to a more realistic number where hopefully we can make some money,” he says.

VIEW FROM GERMANY
Last year was also a dismal one for advertising in Germany, with the total TV ad spend dropping by 10.8 percent to €3.6 billion ($4.9 billion) in 2009, according to ad agency Magna Global. Yet the ProSiebenSat.1 Group reported recently that it had managed to increase its operating profits for 2009, exceeding analysts’ expectations, and Rüdiger Böss, the senior VP of group programming acquisitions, reports that the company’s buying budgets have remained stable. “For the right product we will always have money,” he says, adding that acquisitions continue to play a “very important” role in the company’s overall programming strategy. Germany remains a strong market for feature films, he notes. “They perform really well compared to most of the other international markets, and U.S. series are huge.” Desperate Housewives, Grey’s Anatomy, NCIS and the recently launched The Vampire Diaries all do very well.

While the U.S. market remains the “most important” source for the company’s acquisitions, Böss expresses concerns about rising prices and the growing popularity of online video. The U.S. series “are telling great stories,” with great casts, he says. “The problem is that the studios want to squeeze out every penny from us [while at the] same time they are selling these rights to iTunes, Hulu, [and other online video sites]. We will not be able to spend as much money for fewer rights in the future.”

At ProSiebenSat.1’s German rival, RTL Television, Dirk Schweitzer, the executive VP of program licensing, says that he recently acquired “a few interesting U.S. series,” which he didn’t want to name for competitive reasons. He also stresses that “we are still open for series which fit in with RTL’s profile.”

RTL Television had a strong 2009 in terms of ratings, reports Schweitzer. In its 14-to-49 target demographic, “RTL Television was the clear market leader in 2009 with a 16.9-percent share.”

While his acquisition budget “has remained constant,” Schweitzer adds that the company continues to watch its spending and that it doen’t have “any major slots to fill” because its long-running series continue to perform well. These include big entertainment formats like Deutschland Sucht den Superstar (Idols) and Das Supertalent (Got Talent), prime-time reality formats and locally produced fiction series such as Doctor’s Diary and Lasko.

At MIPTV, Schweitzer will also be shopping for RTL’s three digital channels, for which “we regularly purchase a large volume of programs,” he says. Recently these acquisitions have included “the entire Jamie Oliver franchise, a further season of Secret Diary of a Call Girl, as well as ZOS: Zone of Separation and Lost in Austen,” he adds.

Currently, acquisitions make up about 30 percent of the schedule. The best performing acquisitions for the main broadcast channel are “fiction series but also the big Hollywood blockbusters such as Die Hard 4.0, The Devil Wears Prada or Night at the Museum,” Schweitzer says.

“In the case of free TV we mostly buy U.S. programs, [but] for the digital special-interest channels our sourcing is much more broad-based,” he says. “For these we buy U.S. series and documentaries but also British and French programs, [as well as] lifestyle programs for [the digital channel] RTL Living or Bollywood films for [the digital channel] Passion.”

SPANISH FLAIR
As for RTL in Germany, formatted programming has worked tremendously well for Spain’s Antena 3. “We’ve had great results with the recently launched Curso del 63, a European format,” says Carlos Fernández, the director of content, who adds that the network will soon debut its own version of Undercover Boss. “We’re always open to formats but under one condition: They must be innovative. And [as] they’re very important, we work a lot with them and we’ll continue to do so.”

On the scripted side, Fernández says that Antena 3 has always found room for U.S. imports. “We’re the only private network that has a regular slot for film. Glee and Modern Family are two significant productions we’ll have on our slate. Lie to Me is another series that’s part of our programming. We’re currently promoting Glee and we hope it will strike a chord with viewers, as well as Modern Family.”

Fernández explains that against the backdrop of the fall in Spanish ad revenues, “We’re doing a bit better than last year but we are unsure about the future. As of this year, we’ve seen a 1-percent increase over the last period in the ad market. There’ve been estimates this year that point to declines of up to 7 percent, which is an improvement, but one that also generates plenty of uncertainty.”

ITALIAN FRAGMENTATION
Italy also took a beating in 2009, with a drop of some 9 percent in TV ad spend, according to Magna Global. The good news is that this year the decline is forecast at only 3 percent. The advertising downturn, however, is not the only challenge that Mediaset, the leading commercial broadcaster in Italy, is facing. It is also dealing with audience fragmentation and changing viewing habits.

The group operates three free-to-air networks, Canale 5, Italia 1 and Retequattro, as well as two digital free-TV channels, with at least two more slated to launch. Mediaset also has a bouquet of pay channels that are divided by target or genre: three that offer movies and series divided by demo, and others that comprise the premium movie package.

Consequently, “Mediaset still has a great need for acquired product,” explains Francesco Mozzetti, the head of acquisitions and sales at Mediaset. “In December of last year we renewed two volume deals with Warner Bros. and NBC Universal for both free and pay TV, with important provisions for VOD as well.”

Mozzetti continues, “We have good relationships with the other studios with whom we work on packaged deals mainly for free TV—there are some small pay-TV components, but it’s mainly free. We also closed an important deal with MGM for the Rocky franchise plus a series of TV movies and animated series.”

The lion’s share of Mediaset’s acquisitions budget goes to the Hollywood studios. “But we also look carefully to European product,” explains Mozzetti. “Retequattro in the last few years has made significant investments in French and German series. There are many on air, such as Navarro and Julie Lescaut from TF1 and Hamburg Dockland from ZDF. We even buy Spanish series; in some genres the Spanish have excellent product.”

One of Mediaset’s key rivals is the Fox International Channels group. The global economic crisis has not affected Fox International Channels Italy’s business negatively, according to Fabrizio Salini, the VP and head of entertainment channels, as the bouquet is part of the SKY Italia pay-TV platform and receives a dual revenue stream of advertising and subscriber fees.

“Our channels are performing very well. Both our ratings and income are still growing. We recently launched a new channel on the SKY platform, FoxRetro, [and] our acquisition budget has not been affected negatively by this crisis.”

Salini, who oversees five entertainment channels, says he’s looking to acquire product for each of the channels based on their “editorial profile.” FOX is “dedicated to the best television series” while FoxLife offers a variety of “female-oriented entertainment” and FX is programmed with “dramas, comedy, reality series and documentaries” for men, he explains. FoxCrime, he adds, “is the only Italian TV channel dedicated to crime and investigation.” The group’s newest channel, FoxRetro, which launched in 2009, focuses on the “best television series from the 1970s to the 1990s,” he says.

The American majors play a crucial role in Fox’s programming acquisitions. “We have several long-term relationships with Disney, Twentieth Century Fox and HBO, and these deals recently brought us series such as Glee, White Collar, Modern Family, Cougar Town, FlashForward, True Blood and Bored to Death,” he states.

But the channels also acquire programs from France, the U.K., Germany and Spain, and Salini expects those to become even more important in upcoming years. “We are confident that European productions will continue to improve [and] be able to really compete with the major American productions,” he says.

IRISH WOES
Ireland was one of the countries in Europe worst hit by the financial crisis, with TV advertising falling a whopping 21.5 percent in 2009, according to Magna Global. “I think only Spain, Portugal and Greece have seen the falls in TV advertising of the magnitude we’ve seen in Ireland,” admits Dermot Horan, the director of broadcast and acquisitions at RTE. This has reduced the amount of money RTE is spending on both original productions and acquisitions. “My acquisition budget has been cut quite significantly and I’ve had to make the budget work harder,” he says.

RTE1 remains the most popular channel in Ireland, he notes, with about a 31-percent market share, and RTE2, which skews younger, is the third-ranked channel, with about an 11-percent or 12-percent market share.

Local productions are the highest-rated fare on RTE1, but the channel also airs movies and has slots for such U.S. dramas as The Mentalist. “Movies don’t generate the audiences they once did, but they generate a younger-skewing audience, which is important,” Horan says.

RTE2 captures young viewers and has more acquired programming, including a wide variety of U.S. dramas and “a number of comedies, both indigenous and British and American, as well as some movie slots,” Horan says.

Horan is currently scouting for prime-time comedies and dramas from outside the U.S., as well as kids’ and factual.

In the kids’ arena, he is particularly interested in tween and teen comedies and will be looking for true-crime documentaries to fill some late-night slots.

Horan stresses that RTE’s deals with the Hollywood studios remain very important but that the economy is forcing it to reduce spending as those deals come up for renewal. “We very much want to continue to do business with the studios but we’ve taken the view—and the studios have cooperated with this—that they need to recognize that we are in a different place than we were two years ago,” Horan explains.

POLISH PURSE
Bogdan Czaja, the deputy programming director at TVN—the leading commercial network in Poland—also indicates that the economy has put pressure on his programming budgets. “Last year, the Polish market was no different than many others. There was a decline of some 15 percent [in TV advertising], and we don’t know what 2010 will look like, so that has an impact on acquisitions and we have less money to spend.”

Czaja says he “is open to new and interesting shows and deals” but won’t be rushing to make agreements. The station also has large deals with Warner Bros., Paramount and Universal, “so in terms of U.S. movies and series we are pretty much full,” he says.

Describing his programming strategy, Czaja says that TVN is currently number one in the targeted 16-to-49 demo and that the most popular shows are local productions of big entertainment formats like Got Talent and Strictly Come Dancing. Local scripted dramas and comedies have also been doing well.

While it airs some British shows during the day, about 90 percent of TVN’s acquisitions come from the U.S., with movies being the most important category. Local versions of foreign series, such as The Nanny, have, however, done well, as have big entertainment formats, and Czaja is looking for more.

CEE CHANGE
Elsewhere in Central and Eastern Europe, the Romanian market has been slammed by the global recession. But Sorina Big, the acquisitions director at Pro TV, stresses that the crisis has “not changed our way of looking at acquisitions; we have always carefully evaluated the programming we’ve acquired and we will always do that.”

Big says she’s looking for prime-time programming for the channel’s 18-to-49 target audience. Popular programs at Pro TV include Romanian versions of the Televisa format Bailando por un sueño and Extreme Makeover.

Acquired movies, particularly action, comedy and thrillers, also garner strong ratings, making “American programming central to our acquisition strategy, as they are the most-watched [type of programming] by our audience,” she notes.

Some American series are also successful, including CSI: Miami, CSI: New York or Ghost Whisperer, and European programming remains important, particularly product from British, French and Italian distributors.

Recent acquisitions include the mini-series The Pillars of the Earth and the series Legend of the Seeker and Ghost Whisperer. Deals with the Hollywood studios have also brought Pro TV blockbusters such as Superman Returns and Stealth.

While the size of their budgets differ, European broadcasters across the board appear to be ready to scout the market for new programs and remain willing to open their checkbooks for the right concept.