Buyers Step Up

This article originally appeared in the MIPTV 2015 issue of TV Europe.

Getting value for money and negotiating for multiple windows are key issues for Europe’s top buyers as they seek out new content.

European TV buyers attending MIPTV this spring [had] plenty to think about. The election of a radical, left-wing government in Greece is threatening to trigger another economic crisis across the Eurozone. The value of the Euro against the dollar has already plunged in recent months. It hit an 11-year low earlier this year. Alongside concerns about the exchange rate and the wider European economy, where in many countries austerity remains a fact of life, broadcasters have their own challenges to face.

Both free-to-air channels—commercial and publicly funded—and pay stations are looking warily at their internet rivals. They need no reminding that the likes of Netflix and Amazon are competing ferociously for content and the talent that drives it. They of course have the financial firepower to tie up deals with in-demand showrunners, writers and A-list actors. In this unpredictable, uncertain world, seeking out shows capable of bringing a new sheen to tired schedules is a lot more complicated than it used to be.

“You are no longer only buying shows for a few runs,” says Katie Keenan, the head of acquisitions at British free-to-air broadcaster Channel 5. “Viewing has changed. In addition to linear services, there is catch-up.”

Cathrine Wiernik, the programming director for general TV at Swedish broadcaster TV4, agrees. “Acquiring rights is a lot more complex these days. Segmentation is everywhere. We need to be creative about how rights are windowed across linear, pay and SVOD.”

“These days more than ever, buyers are looking for a show that can change how audiences perceive a channel,” adds Jeff Ford, a veteran buyer—having headed up acquisitions at ITV, Channel 4 and Channel 5 and served as content director at TV3 in Ireland—who just started a new job as managing director of FOX International Channels U.K.

“It’s no longer only about how many people watch a show; it has more to do with the show’s appeal to the 16-to-34 demographic that advertisers crave. For a show that reaches younger audiences, buyers will pay over the odds, perhaps as much as four times what they’d normally pay.”

Across Europe, on the main channels and on some of the smaller ones, too, buyers know that prestigious imported drama remains at a premium.

In the über-competitive British market, one of the past year’s more successful acquisitions was the Batman prequel Gotham, secured from Warner Bros. by Channel 5 in the face of keen interest from competitors, believed to be Channel 4 and Sky.

Channel 5 needed to pay top dollar for Gotham, but it was an investment that paid off, giving the broadcaster a big hit, especially with young males. “It was our biggest show of 2014, a massive tentpole,” says Keenan.

IN THE PORTFOLIO
Since Viacom announced it was buying Channel 5 last May, new synergies have emerged between the main broadcaster and Viacom-owned international channels like Comedy Central and now Spike, which was slated to launch in the U.K. this spring. While Keenan’s main focus is Channel 5, her buying brief also includes 5’s two sister stations, 5Star and 5USA, plus Viacom’s U.K. entertainment brands.

Scripted programming remains a priority for Channel 5. The final season of the staple police procedural The Mentalist is currently airing, so there are clearly gaps in the schedule.

“Lately we’ve taken a few more risks with some of our drama purchases,” says Keenan. “We still love crime shows, but Under the Dome [a sci-fi series from CBS Studios International] represented quite a departure for us. I’m looking for big-budget drama like Gotham that can really cut through.”

In Europe’s biggest TV market, Germany, acquired drama continues to be highly sought after.

At ProSiebenSat.1 Media, Rüdiger Böss, the executive VP of group programming acquisitions, says his focus remains on American drama sourced from the main studios. He buys for numerous platforms, including free-to-air channels, three pay channels, a VOD platform, and a YouTube channel. The past year has seen success with Warner Bros.’ Gotham, The Flash and The Mysteries of Laura, and CBS Studios’ Scorpion.

“Fiction is still very successful on free TV in Germany,” says Böss. “If you can build a successful series, it is a cash machine. Newer players like Netflix are coming into the market, so we need more exclusivity and longer windows.”

Business models and rights issues for high-end drama are on a lot of buyers’ minds. Jakob Mejlhede Andersen, the executive VP of programming and content development at Modern Times Group (MTG), is among them.

“A priority is to work out how to marry international scripted co-production with Nordic co-production,” he says. “Are there other ways of doing scripted drama? And is it possible to control rights across different windows? The traditional studio model where you buy in only one window is no longer sustainable.”

BUY IT OR MAKE IT?
Add to this the economic woes in some parts of Europe, and the question of whether to invest in acquired or locally made shows is not quite as straightforward as it seems.

“In certain territories, incumbent broadcasters facing increasing financial pressure to sustain long-term output deals—which continually deliver high volumes of returning series—turn instead to locally acquired content,” says Jason Simms, the senior VP of global acquisitions at FOX International Channels. “It is far too simple to say this is the case everywhere, but it is something we have observed in some territories. This can create opportunities for new windows to open in places that may previously have seemed locked up under long-term deals.”

So, is there a further trend away from spending big bucks in Hollywood and instead a trend toward putting the money behind local shows? If only it were that simple.

At TV 2 DANMARK, Anette Romer, the head of acquisitions and formats, explains, “Our budget remains the same as [it was] last year. However, funds are being redirected from output deals to local production, where we see increased investment in Danish drama as well as other genres.”

She adds, “Imported programming is important in the sense that it delivers perspective, a ‘window on the world,’ and we love to find strong, engaging documentaries and drama—and yes, it’s always much more cost-efficient than local productions.”

Romer buys for the main channel TV 2; niche channels TV 2 Zulu, aimed at young males, TV 2 Charlie, aimed at mature audiences and TV 2 Fri, aimed at middle-aged audiences; as well as the digital platform TV 2 Play.

IN THEIR PRIME
Acquired shows have a few prime-time slots on the flagship TV 2, especially in the summer months when audiences are at their lowest, but primarily play during daytime or late night. Zulu airs comedy and young-male-skewing entertainment, while Charlie shows plenty of drama and entertainment. Fri focuses on lifestyle and factual entertainment. The latter is being tweaked in order to broaden the genre mix.

Romer singles out imported documentaries such as Tsunami: Survivors’ Stories as doing well in recent months. An innovation was buying a James Bond movie package from MGM. Another successful acquisition was Broadchurch. Romer has high hopes for the second season of the ITV commission and for the Sky drama Fortitude, starring Sofie Gråbøl of The Killing fame. Romer is also excited by the Norwegian acquisition The Heavy Water War, a World War II drama.

At Sweden’s TV4, most of the investment in acquired shows is for SVOD services. “Audiences no longer have the patience to wait a week to watch the next episode of a series,” says Wiernik. “When pirated sites are as sophisticated as they are, viewers want to watch on demand. The second season of Gotham flopped in peak time for us. Broadchurch stripped across two weeks did well, but the second season of MGM’s Vikings was far less successful.

“The days of being able to build a linear schedule around a big U.S. show are long gone,” Wiernik continues. “Ninety-five percent of TV4’s peak-time schedule is now locally produced.”

BALANCING THE BUDGET
Overall, acquisitions budgets appear to be static and, in some cases, on the rise.

“What we spend is certainly not decreasing,” says ProSiebenSat.1’s Böss. “Overall, the amount is stable and in some cases is going up a bit.”

At the U.K.’s most-watched commercial broadcaster, ITV, budget stability is the watchword, too. “I’d say our acquisitions budgets are consistent,” notes Sasha Breslau, the head of acquired series. “The money we spend varies quite a lot across the channels. Rather than having a pot of money, we work out what we need in terms of slots and genres.”

The big-spending British pay giant Sky continues to funnel large amounts of money into acquisitions. Sarah Wright, the platform’s controller of acquisitions, describes her budget as “healthy.” She adds, “It’s full steam ahead for Sky. Our customers love our ‘Best of the U.S.’ policy, and we are not deviating from it. They expect to have the very best shows from the U.S. and around the world. For us, it’s very much business as usual.”

Wright’s portfolio encompasses Sky 1, Sky Living, Sky Arts, Sky Atlantic and Sky Movies, plus the free channels Challenge and Pick. She lists The Flash, Forever and Hawaii Five-0 among the U.S. shows that have performed well for Sky 1 during the past year.

At the BBC, acquisitions spending looks to be on a tight leash in the run-up to tense negotiations with the British government over future funding.

“We all know that most people at BBC TV have less money than they used to,” says Sue Deeks, the public broadcaster’s head of program acquisitions.

FOREIGN EXCHANGE
For some continental European buyers, one worry is the high value of the dollar against the Euro.

“The strong dollar is a bit of a headache for us,” admits MTG’s Mejlhede Andersen. He buys content for around 60 channels in the Nordics, Russia, Central and Eastern Europe and Africa.

His point is echoed by Böss, who says, “U.S. shows have become more expensive due to the Euro losing ground to the dollar.”

The vagaries of the advertising market, especially as online platforms expand, need to be calibrated into the deals that distributors can extract from buyers. “For a lot of people, the challenge is that advertising money is moving online, although that is not an issue for us,” says Mejlhede Andersen.

Nick Lee, the acquired series manager at Channel 4 in the U.K., has a different perspective. “Currently the advertising market is resilient. I would disagree that acquisitions are a more efficient investment. It’s simply a part of our very distinctive proposition to viewers and advertisers here at Channel 4. It’s certainly not the case that acquisitions are increasing.”

The encouraging news for distributors is that for broadcasters, the ability to occupy shelf space on program guides with a significant channel portfolio is arguably more important than ever.

Channel bouquets are fine-tuned constantly. In this respect, what has recently unfolded in the U.K. may be instructive for broadcasters on the other side of the English Channel in continental Europe.

While Channel 5 has been prepping Spike, ITV has been adjusting its own channel lineup. Female-skewing ITVBe debuted in October. “ITVBe and ITV4 will both be priorities at MIPTV,” explains Breslau. She wants “glossy U.S. reality shows, although they could hail from Canada or Australia,” for ITVBe, and factual-entertainment content for ITV4.

Storage Wars, Pawn Stars and Counting Cars have all worked well on ITV4, according to Breslau. She is looking for high-volume series that have a minimum of 20 to 30 hours so they can be stripped for both daytime and peak.

The main channel, ITV, rarely offers viewers acquired series in evening slots. An exception was the Cold War drama The Americans, which was axed by ITV earlier this year from its late-night slot after two seasons. “The Americans was a clever, well-produced, well-written show. Sadly, the ratings just weren’t good enough,” explains Breslau.

“We are not actively looking for another drama acquisition for ITV,” she says. If the right property emerged, “it would need to be a high-quality show that added a different flavor to the channel.”

The requirements of ITV’s main British rival, the BBC, are more modest. The French drama Spiral has secured a cult following on upscale channel BBC Four on Saturday nights; season five ended earlier this year. Deeks spotted the potential of the Parisian police series around a decade ago. Spiral was bought by the BBC in 2006, before The Killing ignited the boom in brooding, European detective drama that still resonates today. “In a way, Spiral was the show that kicked the whole thing off,” says Deeks, who is one of Britain’s most experienced buyers. “But initially, Spiral was overshadowed by Wallander and The Killing.”

THE BEEB’S NEEDS
Deeks’ buying needs cover all four BBC domestic channels. This is despite the fact that youth-friendly BBC Three is due to switch to an online-only service in the near future.

“I’ve been told that acquired shows will still have a place on BBC Three when the channel moves to online only,” says Deeks. “I am waiting to hear the details.”

Flagship service BBC One is effectively a no-go zone for imports during prime time. Daytime is another story. BBC One runs The Doctor Blake Mysteries from ABC in Australia; season three is being lined up for later this year.

Another Antipodean drama, A Place to Call Home, has played on the more rarefied BBC Two, also in a daytime slot. New for the channel in 2015 is the NBC conspiracy thriller Odyssey.

“I’m interested in drama and comedy for peak-time slots on Two, Three and Four,” concludes Deeks. “At MIPTV I hope to pick up intelligence about pilots and what the majors plan to unveil at the L.A. Screenings in May.”

In this respect she won’t be alone, despite all the uncertainties facing the international TV community as it once again takes center stage in Cannes.