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TBI CONTENTS

16 COVER STORY DEPARTMENTS Indian File Monitor South African TV To Reform 6 India is a market of 900 million people with a film and tv industry which is already limbering up to China Impasse Delays Licenses 7 serve a plethora of private stations and a newly- Spanish Cable Law In The Works7 dynamized public broadcaster. Canada Unveils New Contenders8 16 The A -Zee of Indian TV Advertisers Demand Shake-up 8 20 Serious About Software Star TV Brushes Up Its Chinese 9 21 The Elephant Dances Market Drives Aussie Pay -TV 9 24 MARKETS Japanese Debate Ratings Change 10 RTL2 Ups Own Production 11 Travel Business Channel 5 Plan Goes Digital 11 TF1 News Channel On The Air 12 Markets, large and small, themed and regional, are cropping up all the time: should tv marketeers be more selective? EDITOR'S NOTE 26 ADVERTISING American Football 2 PERSPECTIVE Appealing Margins The Networks Stage A Comeback 4

Teleshopping and infomercials are part of a lucrative business which is gradulally moving into the broadcasting mainstream. COMMENT Protecting The Public 14 30 SPECIAL REPORT: NEWS ADVERTISING Top Of The Hour IBM s Predicament Not Unique 40

The news explosion continues to unfold, with DATA a third major player entering the agency busi- TV Is Dead... Long Live TV 41 ness and more broadcasters pursuing the all - news option. But in some parts of the world, unfettered access to news is not encouraged. PRODUCT NEWS

What's Wrapped Or Ready t 30 The Information Circus 34 Three Is A Crowd HARD TECH 38 Making The Wrong Kind Of Headlines Europe: A New TV Testbed 48

Television Business International July/August 1494 EDITOR'S NOTE

TELEVISIONM BUSINESS TBIINTERNATIONAL Open Goal

PublisherPaul Nicholson About a year and a half ago I had dinner with the folks from Group W EditorRich Zahradnik Satellite Communications. Everybody was in a good mood. Country Deputy EditorTim Westcott Music TV, the video music channel Group W and Gaylord Communications were bringing to Europe, already looked a success. We celebrated that Associate Editor Sarah Walker night; champagne followed the meal, and has happens at the best of busi- Contributing Editors ness dinners, we stopped talking about business. Barry Flynn, Toby Syfret, I brought up my personal obsession - football - an obsession I'd been Jean -Luc Renaud, Chris Dziadul, Barbara Bliss Osborn (U.S.) able to indulge since moving from the U.S. to Britain. Lloyd Werner, Group W Satellite's executive vice-president, offered that he had played soccer as a Editorial AssistantMarie Beardmore kid, in fact that he'd probably won the national scoring title playing for Col- Director of SalesSally -Anne Wilse gate University. He was only pretty sure about the title because no-one kept track of statistics then. Amazed, I asked if he'd brought up his football Sales ExecutiveCaroline Haybyrne exploits as he met European tv execs. He hadn't even thought to. It was Sales Representative then that I told him about the most important attribute I found I had as an David Field (Australasia) American doing business in Europe: I love to talk about football. Dutch distributors, British broadcasters, Spanish salesmen, they'll all talk with me for Art Editor/Business Publications Matthew liumberstone hours about football. Over Mip dinners, once we've bored each other to death with what we know about Lithuanian barter regulations, the real con- DesignerMarie Calvert versations can begin. We talk football. ProductionDebbie Williams So why all this football talk? I've spent the past seven weeks in Dallas working for the host broadcaster at the World Cup. In that time, I've Managing Director, watched as ABC and ESPN missed a colossal marketing opportunity. My 21st Century PublishingNick Snow work -place was the International Broadcast Center, headquarters for compa- Correspondents: Argentina Mike Galetto Australia Liz Fell; Brazil Mac Margolis; nies TBI covers all the time. TV Globo, ITV, France 2 and 3, ARD and ZDF Canada KarenMurray; Denmark Thomas all had studios in the IBC. They and others were interested in American Dodd; China Ma Yuanhe; Finland Eddie Hawkins; France Serge Siritzky; Germany reactions to World Cup football. They kept asking to meet with ABC and Klaus Linke, Jack Kindred; Greece Stylianos Papathanassopoulos; Hong ESPN; some wanted interviews with U.S. tv people. But though ABC and Kong Owen Hughes; Hungary Len Scott; ESPN controlled U.S. rights to the tournament, both had stayed home, ABC India Indrajit Lahiri, Asoka Raina; Ireland Fergal Ringrose; Israel Barry Chamish; in New York, ESPN in Connecticut. It got so bad, I called the ABC and Italy Cecilia Zecchinelli; Japan Mark Schilling; Kenya Kazunga Katana: Nether- ESPN press offices to point out they were passing on an international PR lands Dick Versteeg; New Zealand Vicki event of some importance and maybe they might want to send down some Hyde; Nigeria Titus Ogunwale; Portugal Eduardo Cintra Torres; South Africa Dezi executives and on -air types to do interviews in the 100 or so tv and radio Rurich; Spain Justin Webster; Sweden studios pumping feeds out of Dallas day and night. ESPN listened politely Goran Sellgren; Turkey Serhan Yarar; Serbia Branka Otashevich and said they'd think about it. In the end, they held a conference call aimed U.K. (Editorial and Advertising) mainly at American print journalists. ABC was more blunt: "They know our 531-533 King's Road London SW10 OTZ Tel: (071) 352 3211 phone number." I pointed out you can't do a tv interview over the phone. Fax: (071) 352 4883 or (071) 352 9657 "They know our phone number." Both networks, with all their global aspi- Telex: 925030 rations, faced an open goal and missed. If they knew what that was, they'd Australia (Advertising) Tel.(02) 439 1730 Fax: (02) 439 3103 know how much they screwed up.

TBI is published monthly except January and August, 10 Issues (ISSN 0953-09411 by Television Business International. a 21st Century Publishing company. TBI is ava,ahle by subscription only at an annual subscription price of L50 United King dom. US$102 Europe and US$89 USA US5110 Outside Europe including air speed delnery. Send address changes to: TBI. 531-532 King's Road. London SWSO 0120 All contents copynght 21st Century Publishing The Editor Pnnted in England by Headley Brothers Ltd Ashford gent 4cS Reproduction by Grephic Ideas Studios. 1-11 Bathes Sheet, London NI 60L U.S.A. POSTMASTERS; Send address changes to Television Business International. Publications Expediting,. Inc., 200 Meacham Ate.. Elmont. N.Y. 11003. /or freight and mailing In the U.S.A. by Publications Expediting. Inc.. 200 Meacham Ave., P.S. My thanks to Paul, Sally, Tim, Sarah, Caroline and everyone else at TBI Elmont. N.Y. 11003. Second class postage paid at Jamaica. N.Y. 11431. for helping a little kid's dream come true.

Television Business International July/August 1994 2 A TELEPORT FOR LONDON

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Sierbinel Satellite Services wleolly-owned subsidiary of Worldwide Television News Corporeal. wog. PERSPECTIVE NEW YORK

Rupert Murdoch's audacious June raid on affiliates of CBS, ABC and NBC had its heartening aspect to the shaken Big Three. In spending $500 million to bag 12 affiliates (eight from CBS The Networks alone), Murdoch showed the world that he was betting on the future of old-fash- ioned broadcast tv at a time when other big players are putting down chips on almost anything interactive. When Murdoch struck, the major net- Stage A Comeback works had been enjoying heady times. After a decade in a free -fall, during which their ultimate survival was in some doubt, the three had pulled out of to give up what the public had got sick it and became masters of the universe and tired of anyway. again. As it turns out, family -centred pro- This spring they had whopping grams, led by the sitcoms, Home advance ad sales for their fall line-up, a Improvement and Roseanne, are among positive sign if ever there was one. With the most popular in the U.S. today. Get- some $10 billion in advertising for them ting the message, all three networks are to share this year, or more than a third adding new family comedies in the fall, of the total for all television, all are on with ABC choosing the genre in five of track to top the record profits their com- the six series it's installing and eager to panies enjoyed in 1993. he known as the family network. Yet as recently as three years ago Already one senses complacency set- their outlook was grim. Ten of the lead- ting in. Top network officials talk as if ing cable channels were each making they believe the market has posted the larger profits than any of the three estab- final score, and this is the way it's going lished networks, at least one of which to be for a long time to come. "Free tele- was losing money. And at a time when vision is here to stay," Laurence Tisch, program costs were continuing to spiral BY LES BROWN chairman of CBS, crowed on a note of upwards, network audiences were spi- financial triumph, weeks before Mur- raling downward from the competition doch underscored the message. of cable, barter syndication, the Fox net-of network audiences to level off a year The networks' return to power could work, the VCR, video games and every-or so ago. Nor was it the networks' dili-be momentary, however. The forces of thing else that was spilling into the mar- gent belt -tightening that kept thechange are still at work, and the market ketplace. obstreperous Fox network from gaining has lost none of its volatility. So how to account for the miraculousmore ground in the ratings. DTH is just getting started in the U.S., turnaround? I believe it was plain dumb My theory is that the U.S. Congress and if it should find significant numbers luck. The networks seem to have comeplayed an unwitting part in the net-of subscribers in the places cable by their new-found success throughworks' comeback when it turned up the doesn't reach, the networks will surely some diametrical swing in public taste, heat on tv violence three years ago. This feel the bite. Cable, meanwhile, is tool- rather than through any calculated strat-led the three to grudgingly select pro-ing up with digital compression for its egy of their own. grams suitable for family viewing, andnext big push. According to a recent sur- To be sure, the big three helped theirthat may well have been the positive act vey; as many as 125 new cable networks profit picture by cutting costs on everythat made the surprising difference. are ready to roll out when channel front. This has included peppering The networks thus became differenti- capacity warrants. primetime with in-house programs from ated from cable in being somehow more Video -minded telcos,likeBell their news divisions. But cutting costs is germ -free (one hesitates to say moreAtlantic and Pacific Telesis, have target- a negative response to the competitivewholesome), at least in the public'sed 1995 for the start of their thrust into challenges. You don't regain dominancemind. And I think it can be proved thatmega -channel interactive cable. And through fiscal austerities. Winningviolence -for -its -own -sake had alreadythen there are the new terrestrial net- requires a positive response. begun to pall on the larger audienceworks being assembled by Paramount Clearly it wasn't their cost-cutting thatwhen Congress took up the cause. Theand Warner, and the growing lure to suddenly caused cable's steady drainingtiming was exquisite; the networks hadyoung people of the Internet and the online computer network. The U.S. Congress played Can the traditional tv networks with- stand all this? Every new thing will be an unwitting part in the networks'tugging at their life -line. I confess to hoping they make it, because I believe comeback when it turned up the heatin mass -audience tv. But if their response to the new storm of competition is on tv violence three years ago only to continue down -sizing, I wouldn't bet the ranch on their chances. Ell

Television Business International July/August 1994 4 International Film and Programme Market forTV, Video, Cable and Satellite

14m- 14n1 October 1994 succscreen Palais des Festivals, Cannes, France

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STAR LINKS UP WITH CABLE TV

Cable TV, Hong Kong's first subscription network, has given the strongest indication so faritis about to sign an agreement to offer Star Movies as a premium channel on TOR its 20 -channel service. IV1 N Cable TV's owners, the Hong Kong trading company Wharf, has been SOUTH AFRICA for it to cease operating as a commercial broad- negotiating with Star TV caster. It also outlines a two-tier structure for for several weeks. broadcasting operating at national and provincial Although both sides were levels. Given that the constitution gives the reluctant to give details, Broadcasting Body To provincial governments legislative competence Cable TV managing direc- over provincial public media, this will provide an tor Stephen Ng said: opportunity to establish a public broadcasting "There is mutual commer- corporation in each province, separate from the cialinterestinvolved Free Up The Airwaves SABC here... Star TV is redefin- Willie Currie, a media consultant who helped ing its strategy and with IBA hearings will map out draw up the FTF submission, said the IBA should this new encrypted premi- clearly differentiate between public and commer- um movie channel is obvi- new democracy's tv landscape cial broadcasting. "One cannot really talk about ously looking at other the SABC as a public broadcaster at the moment. sources of income than As South Africa takes its first steps towardThe issue needs to be sorted out before new advertising." democracy, freeing up the airwaves has commercial players enter the environment. Also, Cable TV has also secured become a priority. The eight -member Indepen- the frequency plan was designed for the SABC - a deal to broadcast four dent Broadcasting Authority (IBA), appointed which occupies the vast bulk of available fre- hours a day of BBC World before the March elections, started hearings at quency in urban centers - and must be Service Television news the end of June aimed at mapping out the future redesigned to accommodate the new dispensa- on its International Chan- of broadcasting in the country. tion." nel. More than 60,000 of At the top of the IBA's agenda, apart from the Currie said the elimination of advertising on Hong Hong's 1.5 million award of local radio licenses, will be the future SABC - currently the source of 80% of its income households subscribe to financing of public broadcasting services, regula- - would "remove the commercial influence" from Cable TV. tions on cross -media ownership, local television the broadcaster and allow for the emergence of a content quotas and independent production. healthy independent network along the lines of At the same time as it investigates these Britain's ITV. The FTF submission suggests a issues, the IBA must prepare a frequency plandirect state grant as an alternative means of fund- that will allow for the maximum number of fre- ing. quencies to become available for The submission also calls for the SABC to be broadcasting. Any recommendationsopened up to independent production and for by the IBA will be passed on to the local tv content quotas to ensure that "the chang- National Assembly via the Ministry of ing reality of South Africa" gets an airing on Post and Telecommunications. The South African screens. "It is difficult to compete IBA is expected to grant the first with the U.S. television industry. In South Africa licenses in May 1995. U.S. television drama programs can be acquired As befits the new atmosphere of for as little as R300 ($75) per minute, while the the country, virtually every organiza- cheapest local television drama costs upwards of tion involved in film and television R4,000 ($1,000) per minute," the submission out- production and in the cultural life of lines. South Africa is expected to have a Although the prospect of new licenses still say. A wide range of bodies includingappears distant, would-be foreign investors are the umbrella group the Film and Tele- already showing a keen interest in South Africa. vision Federation (FIT), human rights, One, Sweden's Kinnevik group, started negotia- educational and religious groups,tions with the ANC and local partners even combined to make a joint submission before Nelson Mandela took the presidential oath to the IBA in May. Representatives from the ANC visited the Their submission called for a com- UK studios of Kinnevik's TV3 channel in the mitment to public service broadcast- spring. ing from the giant South African SABC: ad -free future? Broadcasting Corporation (SABC) and by Dezi Rorich - SOUTH AFRICA

Television Business International July/August 1994

6 MONITOR

HONG KONG ESPN, Discovery Communications and Walt Dis- ney are also thought to be looking at Singapore A FIRST FOR as an alternative; the republic's broadcasting MALAYSIA authorities have been lobbying hard for the last License Bids Held Up two years for companies to use Singapore Tele- A consortium of Malaysian com's facilities. businessmen operating In 1993, TV New Zealand opted for Singapore under the umbrella name over Hong Kong to uplink signals to the Palapa of Binariang is set to By Sino-U.K. Standoff B2P satellite for Asia Business News (ABN) in launch the country's first which it has a 29.5% share. Paradoxically, ABN, satellite in 1996. The C - Broadcasters are considering like HBO which is also uplinked from Singapore, and Ku -Band satellite's cannot be seen by the republic's viewers because launch will herald in part a move to Singapore for uplinking of strict content policies. lifting of Malaysia's satellite dish ban, although in by Owen Hughes - HONG KONG theory only Ku -Band dishes with Binariang SPAIN decoders will be permit- ted. The satellite will also be allowed to carry international programming, but U.S. Investors Eye not before it has been vet- ted by the Malaysian government which observes strict rules as to the con- Up Spanish Cable tentofprogramming Star TV is one of only two uplink licensees acceptable in the mainly Muslim nation. continuing political row between the UK Cable legislation and investment Theand China is undermining Hong Kong'swill challenge the DTH market attempts to attract international broadcasters looking for a regional base in Asia. Spain's long-awaited cable law, due to be Despite a claim from the colony's administra- unveiled by the minister of public works, Jose tion last year that Hong Kong could become "a Burrell, at the end of July, is expected to trigger broadcasting beacon" for south-east Asia, bids by heavy foreign investment in the sector. In May, overseas broadcasters to get uplinking licenses executives from Time Warner and U.S. West vis- have been delayed by the Sino-British impasse. ited Barcelona to publicize the creation of a joint Beijing has to be consulted before any licens- venture, Cable y Television de Europa SA with es are awarded because they will straddle the Spanish partners Multimedia Cable. The object of handover of Hong Kong to China in 1997. The the new company is twofold: first to become an licensing process is also bound up in Hong umbrella through which all interested parties can Kong's planned Broadcasting Bill that should co-operate in the huge initial outlay on infras- have gone before the Legislative Council before tructure, and second to begin cabling Barcelona, the summer recess started in July. The Bill, which which Richard Callahan, president of U.S. West would have drawn together overlapping legisla- International, said has all the qualities for the tion, is now unlikely to reach legislators before making of a good market. late 1994 because of China's failure to respond to What form the cable law takes is the only amendments. remaining uncertainty over whether the U.S. Among the issues to be discussed is the companies will actually make the investment. As removal of a 49% cap on foreign ownership of far as the project in Barcelona is concerned, satellite broadcast licenses. Although Rupert which alone would involve an $100 million Murdoch bought 63.6% of Star TV, he was only investment on infrastructure, U.S. West and Time able to purchase 48% of the license, allowing the Warner are in a strong position for winning gov- original owner, Hong Kong billionaire Li Ka- ernment approval. Barcelona City Council is a shing, to retain control of the signal. 24% shareholder in Multimedia Cable's parent Until the Broadcasting Bill becomes law, Star company and it is almost certain it will be the TV and Hong Kong Telecom are the only compa- city halls across Spain who will decide who gets nies holding uplinking licenses. the franchises for cable networks. Complicating matters is China's crackdown on Arthur Barron, president of Time Warner foreign media, including the removal of private- Entertainment, said he expected the Spanish ly -owned satellite dishes and a ban on joint ven- cable market to generate considerable interest. ture film productions with foreign companies. "If the legislation is right I think there will be Potentially the most high -profile casualty is many others who will come here and want to Turner Broadcasting's TNT/Cartoon Network, invest," he said. due to begin transmissions over Asia via the ApStar 2 satellite in the last quarter of 1994. by Justin Webster - BARCELONA

Television Business International July/August 1994

7 MONITOR

CANADA two will be pay-tv services. Two licenses went to OWN GOAL French -language channels. Spicer invited the 38 FOR IBA? unsuccessful applicants, which included arts, news, comedy and sports channels, to resubmit The privately -owned Chan- New Cable Nets Favortheir applications, promising a final round of nel Two picked up the licenses by the end of June 1995. rights to show Israel Foot- "We don't apologise for loading the dice in ball League matchesfor favor of Canadian artists, consumers and broad- the next three years after Domestic Content casters," said Spicer. With all of the new channels the Israel Broadcasting pledging a high percentage, of Canadian content, Authority (IBA) declined to Canadians form a consortium to and investment in programming totaling bid for the rights in May. Can$518m ($375 million), regulators believe the Moti Kirschenbaum, direc- counter the U.S. satellite invasion country's production sector is well -set. tor-general of the IBA. Cable operators Rogers, Shaw, Astral Broad- which controls the govern- Two preoccupations above all loom large in casting, JLL Broadcast Group and CTV's Quebec ment -owned Channel One, I Canada's burgeoning tv business: resisting the affiliate, CFCF, are all involved in the plan to saiditdidnot have industrial might of its friendly but giant neigh- market direct -to -home services. They have enough money in its $15 bour to the south and, less urgently, the 500 - agreed to work with Western International Com- million budget to meet the channel universe. munications (WIC), Canadian Satellite Communi- asking -price of $5 million In June, the two converged when regulator cations (Cancom) and telco BCE group to market a year. The decision was the Canadian Radio and Television Commission direct -to -home services within Canada. criticised by the director of (CRTC) issued ten cable licenses, to increase the "It is expected the new Canadian DBS service the IBA's sports depart- offer of national channels available to the coun-will be up and running by mid -1995, when the ment, Yoash Elroi, who try's nine million cable households to 21. Shortly digital video compression set -top boxes and said: "Whoever owns the before, the biggest cable operators announced a receivers are expected to be available," said rights to local professional plan to meet the challenge of U.S. direct -to -home Andre Bureau, Astral Broadcasting's CEO. basketball and football will services such as DirecTv with a Canadian satellite Shaw, Astral, JLL and CFCF, also agreed to set be the sole winner in the package. up a separate entity to market a complete line-up ratings. Other sports have The ten licenses, issued on June 6, ranged of programming services to areas not currently no meaning for Israelis." from old movies to country music, health and served by cable. The IBA lost the rights to women's interests. By the time they run out at offer a national pay -per -view programming feed. basketball two years ago. the end of the decade, most Canadian homes will Programming services will be digitally com- Kirschenbaum, who was have access to around 100 channels and, accord- pressed and delivered via the Anik E satellite. appointed in March 1992, ing to CRTC chairman Keith Spicer, the regulator has come under fire for will have no job to do - at least in terms ofby Karen Murray -TORONTOand doubling the duration of awarding licenses. Tim Westcott - BANFF the evening news bulletin "In three to seven years, we will see the disap- to one hour, eating up pearance of channel scarcity," said Spicer. The ITALY 40% of the IBA's budget, CRTC will "intervene" for the last time next year and introducing political before leaving market forces to go to work. talk -shows which perform Eight of the licenses went to English -language poorly with viewers. services, most of which will be basic cable, and lime To Change TV,

Says Ad Association Ad revenue is static and viewers are swamped with too many spots While Italy's political parties are engaged in a war of words over the amendment of the tv law, a strictly "business -oriented" warning came from the National Association of Advertising Agencies (Assap), whose members control over 70% of the national market. "The current structure of the Italian tv industry cannot last much longer. It must be radically changed," said Assap president Alberto Contri. "Tv advertising revenues decreased in 1993 and will grow by only 1.5% this year, which is less than the rate of inflation. This is not enough to keep all the broadcasters in a healthy state." Banff: ten new channels got the green light during the festival Atthe same time, he said the number of

Television Business International July/August 1994 8 MONITOR

advertisements aired by the main networks had as China's 1.2 billion people. became "unacceptably large." In 1993, Rai, Finin- At the launch of Star Movies, the network's vest, Italia? and TeleMontecarlo broadcast nearly first subscription channel, in the Taiwanese capi- one million ads - 60% more than in 1987. tal Taipei, general manager Tony Watts said 60% According to Assap, such an excessive level of of the films broadcast would be in Mandarin, advertising concentrated in so few hands (4% ofalthough all offerings would be subtitled. Esti- total airtime for Rai and 14% for Fininvest) is mates put the number of homes with access to detrimental to the market: "Not only because it is the service at one million - about 40% of Tai- damaging for small and potential new broadcast- wanese cabled homes. ers, but also because viewers remember less and Channel V is running 60% Mandarin videos less of what they see." and 40% English -language after reaching deals Assap proposed a reshaping of the tv land- with record labels in the region. Both the intersti- scape, with more national thematic channels and tial material and the language used by the bilin- more syndication betweeen local stations. gual VJs have also seen a big increase in the use Perhaps more importantly, Assap said the big of Mandarin. "It has had an immediate effect in broadcasters, and Berlusconi's Fininvest in partic- Taiwan; Channel V has attracted more viewers ular, must end their policy of selling advertising than our Chinese Channel at times and that is space at generous discounts of up to 70%. "We unprecedented," said a Star TV spokesperson. want a smaller offer of advertising time and 'nor- "We are keeping our options open about how to mal' rates, as in the rest of Europe," said Contri. balance the language content because we have However, Assap rejected the suggestion by to see what the effect is on places like the Philip- Marco Taradash, a Forza Italia MP newly -appoint- pines where English is the preferred language." ed as president of the Parliamentary Commission Mandarin is now Prime Sport's primary for Rai, that the state broadcaster should be for- soundtrack on Star TV's northern footprint cover- bidden from selling advertising. ing countries such as Hong Kong, Tai- Such a move would be "crazy," said Contri. wan, China, Japan, Korea, Vietnam "The effect of taking away from Rai revenues of and the Philippines. Programs with a 1.4 billion lire ($850 million) a year is unimagin- clear niche like Australian rugby able." league are run in English, but largc The association, would welcome the entrance events go out in Mandarin, unless of "international broadcasters" on to the scene. "If cable operators and satellite dish Italian investors and entrepreneurs are not able to owners adjust the frequency of their create a third, strong tv group to compete withaudio channel. The southern beam, Rai and Fininvest and so better balance the covering India and the Middle East, national market, why not think of foreigners?" has not been affected.

by Cecilia Zecchinelli - MILAN by Owen Hughes - HONG KONG Now playing in Mandarin ASIA

Star TV Boosts Big Players Scramble

Mandarin BroadcastsFor Pay -TV Market The pan -Asian broadcaster is Over 100 channels are planned via prioritizing Taiwan and China satellite, cable and MDS latest phase in the market -driven introduc- Star TV, clearly focusing on the Taiwanese and Thetion of pay-tv to Australia is likely to trigger a Chinese markets, has emphasized Mandarin -scramble for cable carriage, with the potential to language programming on its two recently - create as much embarrassment as last year's auc- launched channels, Star Movies and the music tion of satellite licenses. service Channel V TV. Prime Sports has also Australis Media and Continental Century, the added a second soundtrack. It now runs high - two successful bidders for licenses to offer digital profile events like Grand Slam tennis, Formula satellite services via the Domsat satellite, plan to One motor racing and gymnastics with Man- launch this year. Both are offering four -channel darin -speaking commentary. packages which will be received direct -to -home Although English and Mandarin are the lingua in most of the country and, in the major east coast franca of south Asia, Star TV is going after the 20 cities, via cable and microwave (MDS). The million -strong population of Taiwan, as well remaining two channels are allocated to the Aus-

Television Business International July/August 1594 9 MONITOR

tralian Broadcasting Corporation (ABC). SWEDISH TV Backed by a successful share placement and TITAN major finance from TCl/Liberty Media, Australis PLANS NEW plans to offer the subscriber management system CHANNEL and MDS infrastructure for all satellite licensees. Odd One Out In The including the ABC. TV4, Sweden's national A partnership between Australis and Liberty commercial network, is Media will deliver the U.S.-based Prime Sports planning to launch a sec- channel, while a TCl/Australis joint venture com- Ratings Game ond, satellite -delivered pany will offer movies. channel consisting of Australis and the other four -channel satellite Japan still measures tv viewing by reruns, movies and news, licensee, Continental Century, have established managing director Bjorn links through small cross -shareholdings. Finance households, but changes are afoot Nordstrand told a meeting for Continental Century has been provided by a of investorsinJune. small U.S. cable operator, Century Communica- More than four decades after the beginning of Launch is anticipated in tions, and a local venture capital company. commercial broadcasting in Japan, broadcast- 1995 or 1996 if the gov- Another move that will strengthen the posi- ers and ratings services still measure tv viewing ernment gives its tion of Australis is a possible joint venture with by households. This leaves Japan the internation- approval. Nordstrand said the ABC to offer its two satellite channels, one al odd man out; 37 countries in Europe, North the major cost for the covering news and the other children's/docu-America and Southeast Asia have switched to channel would be rental of mentary programming. individual ratings. Under pressure from advertis- a satellite transponder for An auction for the remaining MDS frequencies ers, who feel they are being charged unfairly for Skr30 million ($4 million) is scheduled for July, but gaining access to the inflated ratings, moves are being made that may a year and expected fiber-optic cable network, currently under con- enable Japanese broadcasting to join the majority turnover was Skr300 mil- struction by telephone company Telstra in the by the end of the year. lion ($40 million). high -density eastern cities, is proving more con- The leader in the struggle for change is the TV4, the only commercial troversial. Japan Advertiser's Association (JAA), which rep- network to be distributed The first customer to sign up in May was resents 308 companies, including most of the terrestrially, has upgraded Cable Television Services (CTS), a small major tv advertisers. At the end of 1990, the its 1994 profit forecast to entrepreneurial company headed by Lynton Tay-JAAannounced a proposal for the introduction of Skr175 million ($23 mil- lor, a former Nine Network director. Armed with individual ratings. Television networks, however, lion) after a better than licenses for 20 cable channels, CTS reserved balked. "The current system results in higher rat- expected performance in about one-third of Telstra's cable capacity which ings," explained JAA director Akihiro Ito. "Also, it the first quarter. is limited to about 60 channels. makes it. easier for networks to arrange their At press time, the broadcasting authority had schedules and promote their programs." licensed eight companies planning a total of 166 But following the bursting of Japan's bubble cable tv channels. Would-be investors including economy in the early 1990s, sponsors watched U.S. cable companies Cox and Time Warner, their profits plunge - and as such became more who are seeking a slice of the pay-tv marketconcerned about the bang they were getting using cable, satellite, microwave (MDS) or all from their pitches. three options. However, the authority has cho- At the beginning of the year, JAA, the major sen not to release details of the coverage areas ornetworks and ad agencies began talks on how to foreign control arrangements of some licensees. make the changeover. The system ratings compa- Given Australis and the powerful PMT consor- nies and networks are now considering, devel- tium (named after its partners Kerry Packer, oped by Data Access, requires household mem- Rupert Murdoch and Telstra) have also applied bers to push individual buttons when they begin for Telstra capacity each to offer up to 20 morewatching a program. Ultrasonic and infra -red channels, demand has clearly overtaken supply. sensors then detect whether the number of view- Telstra has now cancelled discussions with cus- ers is the same as the number of buttons pushed. tomers other than CTS while it addresses theIf the number is not the same, a warning light is potentially explosive issue of channel allocation. flashed. To add to this confusion, Optus Communica- "We are still in the process of negotiating, but tions, the second telecoms carrier which already by mid July we should be ready to announce a owns the Domsat system, has decided to build clear-cut policy," said Ito. "The ratings companies another cable -to -home network in partnership have made considerable progress in determining with Continental Cablevision. Further, Optus has how they want to measure individual ratings. recently acquired Packer's Nine Network as aThere are still problems that have to be ironed shareholder. No timetable has been released forout, but we are definitely moving forward with the Optus/Continental network which will pro- this. By fall we should begin tests and by the end vide a range of services, including local phoneof the year introduce the new system. Japan is calls. Continental Cablevision, meanwhile, has clearly behind the rest of the world on this issue. already secured licenses for 35 cable channels Individual ratings are an irreversible trend; Japan with another local partner. cannot continue to cling toitscurrent system." by Liz Fell -- SYDNEY A spokesman for Video Research, one of

Television Business International luly/August 1994 10 MONITOR

Japan's two major ratings agencies together with Under Zeil- AC Nielsen, admitted there is movement in the er'smanage- ANTENA UP direction of individual ratings but was not quite ment, RTL2 FOR GRABS so emphatic as to when it would be implement- achieved a mar- ed. "First, we have to arrive at a consensusket share of Six potential buyers have between the advertising agencies, tv broadcasters 3.4% by the put offers on the table for and advertisers," he said. "Things may change in end of its first a 24.9% stake in Spanish two years or so, but for the time being we intend year last March, network Antena 3 TV, to stick with our current system. - and will report- according to Antonio Asen- edly booka sio, president of the pri- by Mark Schilling - TOKYO total of DM400 vate broadcaster. million ($245 Asensio made the state- GERMANY million) in ment in answer to share- gross ad rev- holder questions at the enues by the recent general meeting. end of 1994. Negotiations with the RR Youth Channel Start-up costs three U.S. groups interest- were originally ed - Time Warner, Disney projected at and ABC - are reported to DM500 million be at an advanced stage. Relocates To Munich ($300 million), An unnamed member of but later Antena 3 N's board, quot- In co-operation with Bavaria Film, reports put the ed in the Spanish press, figure at DM300 Zeiler: leaving RTL2 for ORF named two European RTL2 will up original production million ($183 groups, mediagiantBer- million), which could be paid off in three years, telsmann and the private loss is Munich's gain. The first putting RTL2 on the threshold of profit. As rev- French channel TF1, as Cologne'semployees of commercial channel RTL2 began enues increase, RTL2 intends to up production of additional bidders for the arriving at their new headquarters on the Bavaria its own product. Said Zeiler: "You can only cre- stake. CLT has also been Film lot late in June, in what will be the studio's ate a good image with your own productions." indentified as a possible first full-scale co-operation with a privately -run The Vienna -born Zeiler, now leaving RTL2, buyer. Asensio has guar- group. has been tipped to succeed Gerd Bacher as head anteed the sale, provoked Along with private channel Pro 7 and pubcast- of Austria's ORF public network, a post he will by the collapse of share- er ZDF, youth -oriented RTL2 is the third general officially take over in October. Rudi Reischi, who holder the Banesto bank, interest broadcaster to be located on the peri- handled RTL2's account at theIPAadvertising will be completed in three phery of Bavaria's state capital. Kabelkanal and marketing company in Frankfurt, takes over from months. As yet no news the sports niche channel DSF are already based Zeiler this summer. has emerged over what in the greater Munich area. will happen to the 29.3% Although more of its activities will be at by Jack Kindred - MUNICH of Antena 3 N controlled Bavaria Film, RTL2 will continue to be aired from by Banesto as security a studio in Luxembourg (CLT has a 24% stake). UK against a loan. Banco The channel's sport and news divisions are to Central Hispano is report- relocate this summer to the Cologne-Ossendorf ed to be maintaining its broadcasting center. 10% holding. The results RTL2 has agreed to invest some DM20 million Channel Five for 1993, including profits ($12 million) over the next three years to expand before tax of Ptas1.65 bil- Bavaria Film's centers for video and design. The lion ($12.2 million), and a channel has earmarked DM80 million ($48 mil- number of appointments lion) for productions this year, about a quarter of Back On Agenda totheboard,were which will go for use of the studio's facilities. approved at the general Bavaria vied with rival media states North - meeting. Rhine Westphalia, Baden Wurttemberg and Ham- ITC "concerned" by government burg for the contract with RTL2. But the others plan to encourage digital tv lost out when, at the urging of the state government, which has a 20% stake in Bavaria Film, the UK's fifth terrestrial channel may be avail - media authority BLM granted the channel two Theable to only 50% of the population according coveted terrestrial frequencies. Release of the fre- to a frequency plan decided by the UK govern- quencies expanded RTL2's reach in ten of the ment. One of the frequencies originally ear- state's cities, upping the potential viewership marked for Channel Five will instead be allocat- another two million viewers and increasing the ed to digital broadcasts. channel's overall penetration to nearly 19 million. The Independent Television Commission, the As managing director Gerhard Zeiler regulator which will be responsible for licensing explained: "For us, Munich was a purely eco- the channel, had asked the government to clarify nomic decision, since Bavaria's offer was the which frequencies will be available. After the best." government annoucement, it said it was "con-

Television Business International luly/August 1994

11 MONITOR

cemed" by the reduced coverage, which FRANCE it believes can only make the prospects of Channel Five more difficult. The successful bidder will also have to bear the cost of retuning video recorders whereFrench Cable Says they conflict with Channel Five broadcasts. The ITC will consider whether to readvertise the license in September. The ITC decided to reconsider anOui To TF1 Channel advertisement for Channel Five at the instigation of a consortium formed by Meisel: working on bid Time Warner, ITV broadcaster Meridian Private tv giant is investing $46m and the publishing group Pearson earlier this year. Since then two further groups, NBC in France's first news channel and Virgin Communications, have declared their interest. Virgin owns a small stake in satellite ser- a Chaine Info (LCI), the first French round-the- vice NBC Super Channel. clockL tv news channel, launched to 400,000 "If they want a genuine national channel, they cable homes in the Paris area on June 24. are going to have to give it national coverage," Promising to offer French news junkies the latest said Patrick Cox, chairman of NBC Europe. "If news every quarter of an hour for 24 hours a they reduce the coverage of the channel, it obvi- day, LCI is 100% owned by TF1, France's leading ously affects the amount of revenue we can private broadcaster. expect and the amount we are able to bid." Although Paris Cable was the only network to Cox said that there was a possibility of using make room for LCI at launch, all four of the further frequencies to fill in parts of the country major cable operators have agreed to carry the not covered, although some urban areas whichchannel as part of their basic packages, even would not be served - such as Manchester, New- though its fee of FFr6 ($1.09) per subscriber per castle and Norwich - are cabled to varyingmonth makes it one of the most expensive. degrees. Availability is expected to rise to 1.1 million Farrell Meisel, senior vice-president of Time homes by the beginning of 1995. Warner International Broadcasting, said that it Etienne Mougeotte, second in charge at TF1 was still interested in the opportunity despite the and president and chief executive officer of LCI, lower coverage but that it too was investigating said the annual budget will be about FFr160 mil- how to boost coverage. lion ($29m), with 160 employees out of which 80 The ITC said it wants to discuss the implica- are journalists. Although the new channel will tions of the government's digital plans on the operate independently from TF1 and is based in commercial broadcasters. As well as the analog another part of Paris, some of the broadcaster's Channel Five, the government wants to use fre-top stars such as anchorman Patrick Poivre quencies for up to 12 digital services. Four are d'Arvor will appear on LCI. likely to be simulcasts of the four existing terres- Revenue expected for 1995 is FFr15 million trial channels, with eight channels covering 80- ($2.7m) from advertising and sponsorship, FFr70 95% of the country used for new national or million ($12.7m) from cable fees and FFr35 mil- local channels, including Channel Five. After a lion ($6.4m) from TF1, for which LCI will pro- transitional period of "perhaps 15 years", the duce the weather reports. With these figures, a government wants broadcasts to move to all -digi- deficit of around FFr40 million ($7.3) is expected tal transmission. in the first year and given the slow rate of cable Possibly mindful of the BSB fiasco - the DBS growth, LCI is not forecast to break even for four service was saddled with the obligation to use or five years. Cable subscriptions will probably the British -developed DMac transmission stan- not exceed two million before the year 2000. dard - the ITC is unlikely to make any stipula- Keen to see its FFr250 million ($45.5m) invest- tions about Channel Five experimenting with ment is money well -spent, TF1 is likely to benefit digital. the 'channel with promotional support. It has Cox said NBC's studies in the U.S. and in already suceeded in rallying national and local Europe indicated that it will in any case be "a politicians to overcome the reluctance of some long way down the road." Robert Devereux,cable systems to pay the high fee to carry the managing director of Virgin, said: "The key ques- channel. The channel will, at least in early tion with digital is not the technology, but how stages, be cable -exclusive. quickly the consumer is going to take up digital LCI marks TF1's second foray into new media. tv sets. There's not much point in transmitting It already operates and owns a 30% stake in pan- digital signals to analog sets." European channel Eurosport, and plans to If the ITC decides to go ahead with thelaunch a cable shopping channel. However, license advertisement, Channel Five could be on unlike LCI, this will be forced to compete with at the air by the end of 1995. least two other operations.

by Tim Westcott - LONDON by Serge Siritzky - PARIS

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What is more dangerous: commercial television or advertising? To ordi- nary people - that is, to the majority of those not initiated in the cerebral rites of progressive intellectuals - that Protecting The question may make no sense. To the specialists in apocalypse, the question is as elementary as the answer is clear: commercial television and advertising, of course, are equally dangerous, but even more dangerous in combination. Public From Itself A representative of the naive majority might ask: dangerous? why and to whom? Poor stupid, that's the point, the noble elite will answer. Advertising is Still looming are prohibitive restric- doubly damnable. For one, it is the tions on advertising for food, medicine, means of financing the electronic cor- alcohol and tobacco. Last month, the rupter, and, secondly, it is an instrument German government decided tobacco of manipulation, aiming at transforming advertising should not generally be ver- innocent people into consumers. boten. The Italians have been fighting Exaggerated? Well, look at the catalog on the other side of the barricade - pro- of regulations thought up to fetter both fessedly in order to protect the Euro- commercial television and advertising. peans' health, in reality because they Many of those regulations are justified as want to protect their state tobacco being necessary for the protection of the monopoly. public from all kinds of evils. While intellectual do-gooders may be Underlying those efforts is a strangely motivated in their fight against advertis- split perception of humankind. On the ing by ingrained anti -capitalistic reflex- one hand, the individual is portrayed as es, the question is what makes the rest being autonomous, responsible, inde- of European advertising regulators tick? pendent and enlightened. These beauti- The aim of the Common Market is to ful attributes are freely allotted to ordi- BY WILFRIED AHRENS free commerce from barriers and restric- nary people, for example, in their role as tions. Competition is at the heart of a voters or recipients of political propa- free-market economy, and advertising is ganda. But as soon as those same indi-case, the same female who cannot bean indispensable function of competi- viduals are confronted with commercialentrusted with the choice of the righttion. Consumer protection and the pro- advertising, they are supposed to under-diet for her baby, is regarded as respon- tection of our economies are equally go a mysterious metamorphosis thatsible, intellectually independent andimportant. As things stand, those in turns them into brainless brats. morally autonomous when it comes tocharge have tended to protect less the Take the case of one of the latestthe choice between life and death. economy than the consumer - from European advertising regulations. It for- The European Parliament and Com- himself. bids producers of baby food to advertisemission have been concocting many In Germany and elsewhere, hundreds their product using baby photos and more advertising restrictions along theof politicians and supervisory bureau- obliges them expressly to stress thesame lines. It is true, some regulatorycrats have been wasting their time and superiority of mother's milk. It also pro-propositions have been blocked by indi-taxpayers' money pondering whether hibits the direct marketing of baby food vidual governments or the European the television viewer should be exposed to young mothers still in the hospital inCouncil, like outright censorship of allto two or three spot interruptions of a order not to divert them from breast-advertising by a central Brussels bureau-movie. Nobody seems to trust the tested feeding their babies. cracy or the idea that ad messagesrules of the market which would auto- So, the theory is that women cannotshould always carry a general warning matically switch off any program over- and will not responsibly decide for against the possible risks of the product. loaded with commercials. themselves what is healthy for theirThe Greens of Belgium even vented the The political treatment of advertising, new-born baby. idea of forcing the auto industry to paintespecially that on television, spells a lot Yet the same school of self-styled- in large letters - across their vehicles: of trouble for business in unified protectors of humankind have no such "Driving is dangerous to your health andEurope. It is ironic that after the break- doubt when it comes to abortion. In that ruins the environment." down of the centralised Socialist economies their main traits of dirigisme and interventionism should surface A strangely split perception of again in the traditional free part of the continent. The way advertising is han- humankind underlies the catalog dled will be symptomatic if not decisive of the direction the European economy of regulations aiming to fetter both is going to take. Without free advertising, that is, information, there will be no commercial tv and advertising free flow of goods and services.151:11

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S onsors: Radio Times Broadcast Campaign Capricorn Carlton Television Central Broadcasting Mills & Allen Sky Television TBI COVER STORY: INDIA

The A -Zee of Indian TV

the proportion of its programming This is perhaps one reason why Zee The Indian tv market is which is produced in-house andTV has recently branched out into film acquired will roughly remain 40:60, the production and is currently working on booming, with private volume required is likely to double at13 titles which will be both shown by least. In anticipation of this, Zee TV hasthe service and sold to other broadcast- channel Zee TV in the already set up its own production com-ers. Although it currently has 2,000 pany which "will generate for Zee 1, 2hours of programming (excluding films) forefront and foreign and 3 and meet other requirements." in its library, Lal thinks the volume Furthermore, although the channelneeds to be taken up to at least 6,000 operators bursting to will continue to cater principally forhours in the next one and a half years. Hindi speakers, it has "recognised aThe cost of producing a half-hour studio get in on the act. great demand for south Indian lan-based talk show ranges from less than guages." As a result, it expects soon to Rs100,000($3,226)toRs250,000 Chris Dziadul begins employ producers (either in-house or on ($8,065), with programs shot on location a commission basis) in Madras and costing between Rs300,000 ($9,677) and TBI's focus on India Hyderabad to increase its output of pro-Rs500,000 ($16,129); the price of first - grams in Tamil, Telugu, Kanarese and with a look at the (at a later date) Malayalam. Zee also acknowledges Calcutta as a rapidly expanding major film production centre and has come to agreements with two unnamed private sector companies which will both produce programs in Bengali and access others in such north east Indian languages as Assamese and Origo. The revolution currently sweeping Lal added that Zee TV's plans extend through the Indian television indus-beyond India, where it already has size- try is being driven by the success ofable audiences in Pakistan, Bangladesh, one broadcaster: Zee TV. Nepal, Burma and the Gulf. In Sharjah, Launched in late 1992, Zee TV quick-for instance, it recently set up a limited ly found its niche by targeting viewersliability company named Zee Arabia starved of entertainment and has sincewhich Lal expects will be producing at become one of the world's most popularleast two hours of programming daily satellite channels. for the network within the nextSi), The service, which is backed by themonths. There is also the possibility of chairman of the Essel group of indus-undertaking joint productions with Pak- tries Subash Chandra, is owned by Hongistan in both Sharjah and neighbouring Kong -based Asia Today Limited (51.1%)Dubai, something which he feels would and, since early this year, News Corpo- be a major development. ration (49.9%). Its programming is sup- Elsewhere, Zee TV is likely to take plied by ATL's subsidiary Zee Telefilmsover the new Mauritian terrestrial chan- Limited in Bombay and beamed as partnel TV5, while in Africa it has already of the five -channel Star package to held talks with South Africa's SABC and almost 50 million people in India and a M -Net, along with broadcasters in Kenya further 39 countries within Asiasat's mas- and Tanzania. Indeed, while conceding sive footprint. Zee TV's success has been sudden and According to Subodh Lal, Zee Tele- wanting the broadcaster to be seen as "a film's executive president, the service isstable, consolidated and reliable soft- about to enter a period of considerableware supplier," Lal feels there is "no growth which should see its daily air-way we can confine ourselves to just time increased from 12 to 24 hours andAsiasat. This is a one-way street and the introduction of one or two moreonce we are in this medium we have to channels by the end of the year. Whilego on and on." Box Wallah: The BBC is just one broadcaster biddir

Television Business International July/August 1994 16 COVER STORY: INDIA

run productions made exclusively forBesides now having an audience shareyear or two. Subodh Lal, for instance, is Zee TV is even slightly higher, so the of over 50% of all television householdsconvinced there is a future for pay-tv in service can expect to pay Rs50 crores in primetime, it broadcasts seven of the the country and says Zee TV will shortly ($16.1 million) plus a similar amount fortop 10 (and 12 of the top 20) programslaunch such a service for cable sub- hardware to meet the target. on all channels in India. Its gross month-scribers since "networks show movies Furthermore, there are lingering ly advertising revenue of over $2 million without authorisation. They are mostly doubts over whether the independentis meanwhile obtained from more than fly-by-night operations, have a lot of production sector can rise up to the320 companies and accounts for aboutadvertising but leave the viewer dissatis- challenge of supplying a large amount20% of television ad spend in India. fied." of programming to Zee TV and its com- While unable to provide an exact He also feels the terrestrial and satel- petitors. Kamlesh Pandey, Zee Telefilm'snational viewing figure for the service (itlite channels most likely to survive in vice-president of programming, said thathas been recently estimated to reachthe long term will be dedicated to only "the entertainment industry has to gear 10.84 million households in India),certain types of programming (such as up to orientate itself to the demands ofPandey believes itis growing by thesports, features and entertainment) and television and the work culture has toequivalent of the population of Australia target regional rather than national audi- change. It has to learn how to meet(over 17 million) each year. Moreover, ences. deadlines and also needs financial disci-this is not at the expense of Doordar- Although he adds that Zee TV is pline, something that does not exist inshan and its Metro Channel since the"working in perfect co-ordination" with the country at the moment." public broadcaster "is more like an elderStar TV, the latter appears to have its In his view Zee TV is in fact the firstbrother, not a rival." Indeed "they haveown specific plans for India. According company "to introduce this serious com-their own standards, we have ours. Theyto Robert Bland, Star TV Network's mitment into the entertainment industry. are very strong and powerful but thedirector of advertising sales, the country That is why we are able to produce pro-market is big enough for everybody, be is currently (along with the Middle East, grams at about a half to a third of theit for Zee, Metro or other channels, and Taiwan and China) one of its major mar- expense of others and we are proud of especially for people who can give goodkets and will "by this time in 1995 be a this." quality." very important source of revenue." The service's professionalism is borne Whether the latter is true, however, Having recently launched a pay ser- out by a number of impressive statistics. will only become clear over the nextvice aimed at Taiwan and the Philip- pines, Star TV is also expected to introduce one either targeting India exclusively or along with some neighbouring territories later this year. In Bland's view, "by introducing pay-tv we hope to introduce some sensibility to the (Indi- an) market and indeed turn it into a market." Other players also believed to be interested in launching a pay-tv service in the country include the UK -based satellite channel TV Asia. Although now only using India as a source of programming, its long-term plans envisage serv- ing Asian communities beyond the UK and rest of Europe. The greatest challenge to Zee TV, however, is likely to come from a new satellite network operated by Business India Television (BITV). Due to launch later this year, the service will be struc- tured along similar lines to the Star channel with BITV (itself owned by the powerful Business India Group, which publishes a string of successful publications including Business India and produces the weekly India Business Report program for BBC World Service Televi- sion) providing software to International Communications Network (ICN), a subsidiary company(in which the Nepalese government will have a 25% stake) based in Nepal to circumvent the Indian government's ban on private broadcasters uplinking from the country. Ashok H. Advani, Business India 0 million Indian tv consumers Group's publisher, expects BITV to

Television Business International July/August 1994 17 COVER STORY: INDIA

Managing change: Zee N's Saneep Seedi (left) and Jungle Todfar Tyre (right), Plus Channel's Sangeet Sitaare (center) operate up to five channels and have aswitch to another Russian satellite (Stat- According to Dr Jinendra Kumar Jain, general 70% Hindi to 30% English -lan- sionar-3) located nearer to Asiasatthe president of Jain TV and a former guage content. The first three will offerenabled operators to offer both ATN andBharatiya Janata Party (BJP) politician, entertainment, news and current affairs Star without employing any extra equip-the service is a purely commercial joint and film and music respectively, while ment. Although it has since gone off theventure between Indian and U.S. /Indian the others will transmit programs inair, ATN recently obtained marketinginterests and offers viewers a nine -strand regional languages other than Hindi. rights to a former Russian military satel-package of religious, political, children's, He also estimates the cost of settinglite (Gals -1) being leased by the Lon-sports, entertainment, business, health up the service (which may use a Russian don -based company Unitel and soonand population, current affairs and satellite and be uplinked from Moscow)hopes to operate a DBS service on itdevelopment and environmental issues over a three-year period will be at leastand two further satellites in the series based programming. It is carried by up $100 million, of which up to 90% is like-(due to be launched later this year andto 65% of India's cable operators and ly to be spent on programming. Indeed, sometime in 1995). has a potential audience of up to 21 mil- BITV's wish to obtain 2,500 hours of P.K. Dixit, ATN's chief general man-lion viewers in the country. pre-packaged material by launch dayager, concedes that one of the broad- Although he considers the service to has already brought in a flood of offerscaster's major tasks will be to decide on be a channel "of Indians, by Indians and from independent producers and thosethe bouquet of programming it will for Indians" and describes multinationals who have been commissioned are being offer. Yet while he is confident aboutas a "threat" to cable operators in the asked to work exclusively for the net- country, Jain also "welcomes the idea of work. foreign investors," some of whom are Advani thinks that the industry is big "For others India is a market... now talking to Jain TV. However, he enough to support Doordarshan and also warns that "for others India is a two to three satellite networks, "of for us it is a case of market... for us it is a case of developing which we hope to be one." He adds that Indian television for Indian needs." "our logic is that there is a market which developing Indian tv for Foreign companies are nevertheless can be ad -driven. Let us go out and see likely to invest in ever greater numbers if we can get it." Indian needs" in India's booming television industry. Whether the service succeeds or not, Following closely on from News Corpo- however, remains to be seen. Advanithe prospects of DBS in India, the coun-ration's acquistion of 49.9% of Zee TV, concedes that "if we want to competetry has an extremely low level of indi- the U.S. cable operator Falcon Cable TV we have to make programs people wantvidual dish ownership (compared to aentered into talks with Asianet, one of to watch. We are therefore talking tocable penetration of over 17%) and thisthe country's leading regional language various foreign companies about collab-is unlikely to rise much in the future due services, which are likely to result in it oration and looking at all possibilities." to the high cost of satellite receptiontaking a 40% stake in the venture for Yet while BITV still remains at the equipment. around Rs7 crores ($2.25 million). planning stage, a more immediate threat Elsewhere, competition has been Asianet currently uses a transponder to Zee TV has for some time been posed offered to Zee TV by the Joint Americanon the powerful Russian Ekran-M satel- by another satellite broadcaster which Indian Network (Jain) TV. India's firstlite to beam programs in Malayalam, hopes shortly to start India's firstDBS 24 -hour satellite broadcaster, it wasTamil and Telugu to a predominantly service. Asia Television Network (ATN) launched in January this year and is cur-south Indian audience estimated to be began life on Russia's Gorizont satelliterently distributed to 56 countries fromaround 1.5 million. and initially offered a Hindi -languagethe Gulf to the Pacific by the Russian Although itis already installing the channel (ATN Gold) in addition to one Statsionar 21 satellite. country's first ever statewide cable net- showing programming obtained from Besides already having a wider reach work in Kerala and could have up to Reuters Television, ABC and Thames TV than all other satellite channels targeting 300,000 connections by the end of the (ATN-One). With cable operators unwill-India (including Zee TV and Doordar-year, the agreement with Falcon Cable ing to purchase additional dishes toshan), the service is distributed terrestri-TV is likely to lead to the construction of receive and distribute it (perhaps at theally in Sri Lanka by Maharaja Televisiona fiber-optic system similar to one it has expense of the popular Zee TV), howev- (MTV) and Extra Terrestrial Vision Ltdalready built in the Philippines which er, its future looked uncertain. (ETV) and will soon also be carried byoffers both cable television and telepho- The service's fortunes neverthelessthe new Nepalese microwave service ny services. ED improved earlier this year when its Shangri

Television Business International July/August 1994 18 Likelife,the game ofsoccernever stops.

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Producers Are Serious About Software

Demand for programs is surging in "the most organised entertainment industry in Asia"

The future of India's burgeoning television industry \\ ill ing the popular TV Dbantaka) or Rs3 lakh ($9,678) per film largely be determined by the ability of the country's based program and then sells its own ad time. independent production sector to provide it with pro- Moreover, UTV has started marketing its programming gramming. And with demand for software already begin- to foreign cable channels despite having a library of only ning to soar, many producers can look forward to a period 60 to 70 hours and also looked into the possibility of co - of unprecedented growth. productions with the BBC and Channel 4. BR Films, for instance, began life as a film production While Screwvala feels "there will not be an upper limit company in 1954 and branched out into television 30 years for good software" to supply India's television services, his later. It has since supplied Doordarshan with a wide range optimism is not shared by the production company Plus of programming including the highly successful Mahab- Channel. Despite overseeing the largest in-house produc- harat, a 94 -part epic which cost around Rs9 crores ($2.9 tion facility in the country, its joint owner Amit Khanna million) to produce and was subsequently sold to Europe, maintains lack of money will lead to the closure of most Asia and North America. satellite services within the next two years. According to Ravi Chopra, BR Films' joint owner, the Plus Channel's own position in the market, however, company sells its programming to the public broadcaster as may by that time have strengthened. Launched in 1989, it only it can afford to pay the sums of money which should currently produces 60 hours of mixed programming a be spent on quality productions. In his view, Zee TV is month for Doordarshan's national service, Metro -Entertain- unwilling to spend heavily and ment Channel and revamped third therefore do not reap the benefits channel DD3. It sells to an export of such programs as Mababbarat. market which includes South While BR Films is currently pro- Africa's SABC, Mauritius Broadcast- ducing two further series (the 104 - and London -based part Mababbarat 2 and a 132 -part TV Asia which accounts for 10% of soap named Bada Aadmil for Rs9 all its revenue. Among its better lakhs ($29,000) and Rs3.5 lakhs known productions are Business ($11,290) an episode respectively) Plus (a weekly review of Indian which it also hopes will be highly business, economy and politics), successful, other shows continue Business Baatein (a daily econom- to provide the mainstay of its pro- ic magazine including latest stock gramming. These include the marketreports)andBolly musical program Cibaca Geetmala Plus Channel soap Zameen Aasmaan: Long runner? wood Plus(a weekly report from and courtroom drama Kanoon, Bombay on the world's largest both of which are 52 -part series. movieindustry which offers exclusive interviews, location Chopra feels BR Films is "now geared up for a certain reports and news about premieres). type of production" and is likely to increase its output to Foreign services are meanwhile attempting to make around 300 half-hour episodes a year. As the company's their own presence felt in the industry by establishing pro- background is in film, however, most productions will duction bases. BBC World Service Television, for instance, remain story -based. signed an agreement with Asian News International (ANI) United Television (UTV) meanwhile describes itself as in March which should strengthen its news -gathering one of the few multidivisional companies in India and pro- capacity across the region and lead to the production of duces a wide range of sitcoms, children's programs and several new programs. These may in turn build on the suc- game and chat shows in addition to commercials and cor- cess the service already enjoys with India Business Report, porate videos. Its television programming, which is expect- a weekly show compiled in Delhi by the independent pro- ed to rise from 700 half-hour episodes in 1993 to 600 hours duction company Business India Television (BITV). this year, is bought by almost all broadcasters in India. Although CNN has a lower profile in India than the Zee TV is nevertheless one of its best customers and BBC, it should improve considerably once the channel currently acquires 500 half-hour programs a year. Like all becomes widely available through Apstar (and possibly UTV's other television output, however, it is produced at a Insat) later this year. Ashis Ray, CNN's south Asia bureau cost of $2,000 to $8,000 per episode which the company's chief, said: "We are looking at Bombay as a production joint owner Ronnie Screwvala describes as "conservative." base. It has occured to us that it has quite a reservoir of Yet while conceding soaps alone should ideally cost skilled technicians available at a reasonable price com- $15,000 an episode to produce, he adds that UTV supplies pared to the U.S. If we can utilize this skilled manpower even Doordarshan and its Metro -Entertainment Channel our production costs will come down." with a variety of programming. Indeed, in the latter's case In his view, India has the most organised entertainment (and like other producers) it pays the public broadcaster a industry in Asia and it is already harnessed to great effect telecast charge of Rsl lakh ($3,226) per gameshow (includ- by Zee TV.

Television Business International July/August 1994 20 COVER STORY: INDIA

The Elephant Dances India's state broadcaster has shaken off its education account for almost two-thirds of output) will remain the flagship boring image in response to private competition. national channel reaching almost all of India's estimated 40.3 million television Chris Dziadul reports households, DD3 (which until recently showed mostly music and sport) is Doordarshan was until recently con-which have recently been joined byexpected to be relaunched later this sidered by many observers to be anAhmedabad, Trivandrum, Cuttack, summer as a service targeting up to six inefficient, politically biased andJalandher and Bhopal, will eventually be million upmarket viewers in the four out -of -touch public broadcaster eschew- extended to include every state capital "Metros" (Delhi, Bombay, Calcutta and ing entertainment and hiding behind aand major city in India. Madras) and two other cities. facade of education and culture. The success of the Metro -Entertain- According to Bhaskar Ghose, the sec- The appearance of Zee TV and otherment Channel, which is watched in up retary to the ministry of information and competitors has forced it into a series ofto 10 million homes and has achieved broadcasting, "it is going to emerge... as remarkable changes which initiallyaudience figures (in the case of feature a channel aimed at a more discriminat- included the introduction of a five -chan- films broadcast at weekends) of almost ing and articulate viewer, at people who nel satellite -delivered package and now20 million, can most clearly be seen in are decision -makers or in government seem likely to culminate in the privatiza-its ad revenues. These amounted to Rs54and less forgiving. Its programming of tion of at least some of its services. crores ($17.4 million) in 1993, while Zee films, news and discussions will be of At the heart of these changes hasTV's, though expected to top Rs100quite a different nature and we want it been the creation of the Metro -Entertain- crores ($32.3 million) this year, onlyto be the very best." ment Channel, a market -led service sup-reached Rs35 crores ($11.3 million). He adds that although the broadcast- plied by independent producers and The public broadcaster has neverthe-er's three other services aimed largely at a young and urban less found itself facing competition from(which are what remain of the five - audience. Broadcast on Doordarshan'sseveral other new satellite channelschannel satellite package launched in second channel DD2, it is currently dis-including Jain TV and the soon to be 1993 and currently carry regional pro- tributed by India's Insat satellite system launched BITV. As a result, it is revamp-grams on a time sharing basis) will con- and also terrestrially in at least 15 maining some of its other services. tinue as they are, longer programs in population centres. Indeed the latter, While DD1 (where information anddifferent languages may be brought in "at a later stage." This will presum- ably happen once Doordar- shan introduces digital compression some time this year (itis currently believed to be working closely withtheU.S. company Scien- tific Atlanta) and could eventually result in every- oneinIndia being ableto watch a channel intheirown tongue. Ghose nevertheless insists the broadcaster will not lose sight of itsobjectives. Private stations are "in the busi- BR Films' 94 -part epic Mahabharat aired on Doordarshan and has attracted worldwide interest nesstomake

Television Business International July/August 1994 COVER STORY: INDIA

money. Our main mandate is informa- but almost all households are able to tion, education and entertainment as a receive DD2. third dimension and we take it serious- According to Noshir Desai, the senior ly.71 director of regional offices and media at Indeed, the government treats Door- Lintas India, the channel is "the best darshan "like any other ministry" and thing (the broadcaster) has done and provides it with an annual grant of DOORDA SHAN very relevant to the time we are passing Rs300 crores ($96.8 million) "to keep through." In his view, the service reflects going." a change in the broadcaster because "it Whether this will continue for much has finally realised that television cannot longer, however, remains to be seen. be anything else than pure entertain- The Prasar Bharati bill, which has ment." already been passed by India's lower He adds that there is a universe of house of parliament (Rajya Sabha), is Doordarshan will be "more market -perceptive" 250 million people in the country (out currently being discussed by the upper of a population of 900 million) who can house (Lok Sabha) and will, after some and the Middle East, while a Galaxybe considered to be "core potential tele- modifications, transform Doordarshan satellite will offer viewers in the U.S.,vision consumers." Besides being able to from a government -owned broadcaster Canada and Mexico six hours of its pro-afford consumer products and durables, into a state -funded corporation. The gramming. all are "hungry as hell" for the sort of next step is arguably privatization, and The key to Doordarshan's future,entertainment Doordarshan has at last with it the prospect of opening up the however, could ultimately lie in advertis- begun to provide. Indian television market to further for-ing. Although the public broadcaster's Furthermore, while most of the new eign investment following initial foraysad revenue of Rs400 crores ($129 mil-satellite services now available in India earlier this year by News Corporationlion) in 1993 represented an 11.1%are tending to segment the market (and and Falcon Cable TV. increase over the previous year, that ofin the case of English -language channels Moreover, Ghose believes the gov- cable and satellite services, though onlyattracting only small audiences), the ernment does not have a closed mindamounting to Rs60 crores ($19.4 mil-public broadcaster can still reach 220 about the introduction of privately -lion), grew by 100% over the corre-million of these core consumers and will owned terrestrial services, although this sponding period. remain the first choice for advertisers would require the framing of a broad- Yet while this could serve as a warn-selling popular products. casting bill (no such legislation yet exists ing of things to come, Doordarshan's In targeting these consumers, howev- in India) and would take a long time. Metro -Entertainment Channel should forer, they will need to bear in mind that in While refusing to discuss the possibil-some time still be able to offer advertis-India all viewership is program and not ity of privatization, Doordarshan'sers the kind of geographical selectivitytime -led. Popular films and sports deputy director-general R.K.Singh feels satellite -delivered services cannot match. events, for instance, attract huge audi- turning the broadcaster into a corpora- In Madras, for instance, the latter's pene- ences from all age groups irrespective of tion will make it "less regimented, moretration currently stands at around 12%, the time they are broadcast.fel open and market -perceptive." It may also help the service "harness to the utmost" its "limited production capability," which has hitherto kept co -productions confined to those of an "esoteric" nature. Although one of the world's largest broadcasters, itis currently working on only one joint production (a documentary named Bodhi Dharma with China's CCTV) and has none planned for the future. Doordarshan nevertheless recognizes the importance of marketing and in 1992-3 earned $270,000 in program sales to terrestrial and cable networks around the world. Furthermore it may, in Singh's view, also start targeting services such as the revamped DD3 at audiences outside India. Indeed, the broadcaster has an arrangement with the London -based transmission company GSTV which began test broadcasts in early July. Using a Eutelsat satellite, GSTV will initially transmit a daily three-hour package of Doordarshan's output in English and a range of Indian languages to Europe Letter from India: Star TV's Channel V is new to the landscape

Television Business International July/August 1994 22 ORD S BC94 SBIGGER THANEVER ...soregister NOW!

EMEIIBMON REGISTRATION Exhibition Charges including BTW/VAT Pre -Reg f50/£17.00 One form per person - please photocopy if necessary. Onsitef 75/£25.00 Student Rate f50/£17.00 Surname PLEASE USE BLOCK CAPITALS BTW/VAT No NL801030547B01 Title Initials 1 Fee enclosed - Cheques payable to IEE and crossed Job Title 2 CI Please charge my credit card Company ED American Express lj Mastercard Visa j Access Address

Cardholders Name Post Code_ Expiry Date Country Registered address of cardholder if different from above Telephone Fax For further information on the Technical Programme, please contact the IBC Office at the address below. Postcode Please tick the box closest to your job function U I do not wish to receive direct mail from a third party. 01 LI President/Managing Director/Owner This is a trade exhibition only. 02 Li Senior Management - Technical IBC regrets that children under 12 cannot be admitted. 03 1:1 Senior Management - Other The Institution of Electrical Engineers is 04 Li Financial a registered charity in the United Kingdom. 05 Programme Director/Producer Onsite fees will be charged in all cases where 06 Li Production the remittance does not accompany the em 14 07 CI Post Production registration form. -,..< Nor I 08 R&D/Manufacturing Credit card transactions will be ,...-- charged at the sterling rate...... ,--,:::i....,.. ../ 09 Li Sales/Marketing 10 Other ...... 0V..."-_;,..0j11 CANCELLATION / "...... - --iC Please complete all details on this form and return to: Refunds cannot be made in respect .....0...;;10140 IBC Office, PO Box 193, Savoy Place, of cancellation of S" London. WC2R OBL United Kingdom exhibition only 01 AMSTERDAM 16-20 Telephone: +44 (0)71 240 3839 Fax: +44 (0)71 497 3633 tickets. 09\ SEPTEMBER 1994 MARKETS

Open All Hours

Marketskaya, the Nordic Screenings and Discop made June a busy month for the conscientious tv buyer. With more and smaller markets opening up all over the world, is there enough business to go around? asks Sarah Walker

To the industry outsider, working as awork," he said. "Natpe is still aimed at television buyer or distributor must the U.S. marketplace. We buy a lot from appear one big jaunt around thethe U.S. but most of our acquisitions globe. However there are far more tax-take place at the May Screenings. Natpe ing elements involved in the business ofis more an opportunity to meet people buying and selling programs than drink- and see what is going on." ing champagne and swanning around The increasing presence of Euro- on a company yacht in Cannes. peans at Natpe, however, has begun to The market circuit can be tough andundermine the Monte Carlo market. exhausting. And everyone agrees: thereWhile many executives, are just too many. "Too many, too closemedia Entertainment's senior vice presi- together and too expensive!" said Scottdent and managing director John Ranck, Hanock, managing director of U.S. dis- maintain Monte Carlo is worthwhile tributor Unapix International. Hervebecause it is relatively small and inti- Michel, commercial director of France mate, others question the wisdom of Television Distribution, echoed Hanock: continuing to attend. "We are going "There are too many markets for thethrough some very intense soul-search- amount of production taking place. Weing as to whether we will be attending need to have shows to sell and we neednext year," said Ted Riley, president of "Although we are not looking for to have time to visit people in theirCanada's Atlantis Releasing. "Last year it short-term dollars and merely trying to offices." [Monte Carlo] wasn't very good and soget acquainted, it is not as active as we Such is the volume of markets, festi-many Europeans attend Natpe now." thought," said Herve Michel. "I expected vals and screenings, buyers and distribu- As the major markets continue to it to be more like the Beijing TV Festival tors could find themselves constantly ongrow and encroach on each other, awhere I met representatives from about the road. The reality is, of course, notrecent trend has been the proliferation 20 different tv stations." everyone attends everything. The mostof smaller events aimed at specific As most of the buyers from the major popular markets remain the Nationalregions. For eastern and central Europe Russian stations go to MipTV and Mip- Association Of Television Program Exec- there is Discop (Warsaw) and Market-com, Marketskaya was mainly attended utives (Natpe) which takes place in theskaya (St Petersburg). Discop has alsoby representatives from some of the for- U.S. during January, February's Montetargeted Asia Pacific, South America and mer Soviet Union's 700 or so local sta- Carlo Television Festival, and the grand- North Africa. Mip Asia will cater fortions, who could only afford to spend at daddies of them all for internationalsoutheast Asia, while China alreadymost $100 an hour for programming. buyers nd sellers: MipTV and Mipcom in hosts its own Beijing TV Festival in May. And although the market saw the cre- Cannes. Reed Midem's first Mip Asia, In addition, some countries hold theiration of TVS, a syndication arm for 60 scheduled to take place in Hong Kongown events such as the Paris Screenings, local and regional channels, little busi- in December, is also expected to bethe German Screenings, the Nordicness was done. For those exhibitors well -attended. Screenings and The London Programwishing to offload their catalogues it The BBC's acquisitions department,Market. While many are established and was a disappointment. But for those headed by Alan Howden, regularlysuccessful events, attempts to set upwho had already forged relationships attends Natpe, Monte Carlo, MipTV, markets for the less developed regions with Russian broadcasters either directly Mipcom, the May Screenings, the Ameri-have been met with mixed reactions. or via sales agents, it was a chance to can Film Market and the Cannes Film The first Marketskaya, held in June, build on existing contacts. Festival, but Howden is loath to singledisappointed some exhibitors by the Ufa, the television distribution arm of out the most important. "No one market lack of Russian buyers and, more so, byGerman media giant Bertelsmann, has will make or break anyone's way ofthe lack of available dollars. already established links throughout the

Television Business International July/August 1994 24 MARKETS

tainment buyers to the festival via its video kiosks, where this year 3,000 cas- settes were screened. "We provide each distributor with the names of all the people who screened their show so they can follow up after the event," said Golden Rose secretary general Pierre Grandjean. Expanding further, next year's Golden Rose will be run concur- rently with The Comedy Festival and the International Electronic Cinema Festival. The genre that has attracted the largest number of specialist markets and festivals is undoubtedly children's programming and animation. Children's buyers and executives can attend a mul- titude of events, including the Cardiff International Animation Festival held in the UK during March, the bi-annual Prix Jeunesse in Munich, September's Car- toon Forum and the pre-Mipcom youth screenings. Such events provide buyers and executives not only with an opportunity to buy, but to discuss the current state of the children's market. Joan Lofts acquires about 600 hours of programming a year as head of acquisitions and development at the pan-European satellite service the Chil- dren's Channel, and attends as many markets and festivals as possible. How- ever, she is concerned about the increasing number of children's programming markets. "We don't want children's programming to become ghet- toized in a marketplace where itis not :ussian Roulette: Gambling on new events like Marketskaya in St Petersburg can bring mixed results necessarily seen as the most important genre of programming," she said. region and works closely with its Rus- great proportion was market attendance. If the Europeans are embracing the sian consultant Andrei Orlov. Aside from ACI goes to all the major markets but smaller markets, many North Americans having strong contacts at the majoralso has a presence at the smaller ones.are not so enamoured and were con- broadcasters, Orlov acts as a syndicator "Events like Discop and Marketskaya are spicuous by their absence at events like for the small channels. "It allows us to good opportunities to meet people who Marketskaya. combine $15 buyers to make Russia into don't go to the other markets - you Ted Riley said the setting -up of local a territory and not just a tribal situation," have time to sit down and discuss thingsAtlantis offices in Sydney, Amsterdam he said. properly with them," she said. "We con-and LA means sales executives can be in "You should go to markets when you cluded deals after Discop last year in constant contact with buyers. "You have want to demonstrate something," saidfact we sold out in most of easternto question the usefulness of the mar- Ufa's program manager DeIf Ness. "Our Europe largely as a result of that trip." kets in this situation," he said. "Small attendance at Marketskaya shows weDespite this, Leonard is not sure about markets are good if you don't want to have a dedication to this market. Wethe practicality of doing the rounds of make the effort to travel to the small ter- will be following it up by travelling tothe small markets every year. "Once youritories, but individual sales trips are bet- the individual regions." have had the initial meetings you canter. Nothing beats eye -to -eye contact in Many Marketskaya attendeestravel to the individual territories to a buyer's office." bemoaned the lack of organization andkeep the relationships going. If you do Scott Hanock is more enthusiastic, foresight in creating dedicated marketsthe job right in the first place you don'thowever: "These little markets may well for this particular area. Both buyers and need to keep going back." become just as important as the others. distributors were torn between going to If the territory -specific markets areAll regions have to be focused on and if Marketskaya, to Discop, which took currently in vogue, the number of genre -the marketplace changed so we only place in Warsaw directly after the Stspecific festivals and markets such as thesaw little conventions then I would be Petersburg event, or to July's Moscow documentary market Sunny Side Of Theperfectly happy. Mip and Mipcom are a film and tv festival. Doc in Marseilles and the veteran enter- real scheduling finesse. If I had the abili- Aideen Leonard, head of sales at ACItainment festival Golden Rose Of Mon-ty to focus on each region individually International, reckoned she spent threetreux are also on the increase. Thethen there would be fewer people and months of last year travelling, of which aGolden Rose is trying to attract enter- buyers could focus on distributors." ELB

Television Business International July/August 1994 25 ADVERTISING

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There is more to teleshopping thaninto an acceptable way of doing busi- themop that makes tea and thecarness. Production values are improving, waxthat keeps animals off the lawn. products that are sold over the air are Real products with recognisable brand gaining in quality and range, and many names are finding their way into of the world's leading mutinationals are infomercials. They are proving them- experimenting with infomercials as part selves as part of the marketing mix. And of their overall marketing strategy. as manufacturers learn what infomercials Procter and Gamble recently tested can do, so advertising agencies are the infomercial genre in the U.S. with a reacting as their fears grow that they 30 -minute show produced by ad agency could lose spend to the infomercial sec- D'Arcy Masius Benton & Bowles for its tor. Even mainstream broadcasters, tradi- top -selling denture adhesive Fixodent. tionally caught with their noses high in Game, set and match to the infomercial the air, are picking up the scent of the sceptics who refuse to take infomercials opportunity. seriously, perhaps - if you are prepared It may not have come of age, but cer- to ignore the fact that P&G is the tainly infomercial production is maturingworld's largest advertiser, spending

Television Business International July/August 1994 26 NIMA International (formerly the National Attend the largest Infomercial Marketing Association) has broadened its reach to embrace all of the global direct response electronic retailing industry-including infomercials, short -form direct response television event television and home shopping.

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NBC Super - but Mollier says his company will not go channel usedahead until the rules stipulating that to air up to 21brand names cannot be mentioned on - hours a week air are lifted. ofinfomer- Elsewhere in Europe, home shopping cials. This hasprograms and channels are forcing their been reducedway past local preconceptions and regu- to just an hourlations. Terrestrial broadcasters in Spain, aday.The Portugal and Greece have all been loss of up toreliant to varying degrees on revenues $6,000 angenerated from selling their time to hour sooninfomercial producers. Kinnevik-owned builds into aTV -Shop has blazed a trail for the significant infomercial/teleshopping culture in the sumfor a Nordic markets and on into Germany channel strug-and the Baltic states. Under the direction gling to findof managing director Jan Sjowall, the its niche. Thecompany is currently working with more cost of pro-than 20 tv and radio stations in these ducing ormarkets, offering brand manufacturers a acquiring pro-service that will take them through all gramming tothe infomercial stages from the produc- fillthis gaption of the program through the place- could provement on the channels to the fulfillment impossible. of orders when the tv viewers start to Wherever respond. regulators cre- Meanwhile, Regal Shop International, ate rules tothe London -based arm of U.S. parent attempt con- Regal Communications Corporation, and

always have pursued global strategies that have American Telcast's Peter Rabbit Informercial, hard sold by Angela Lansburyentrepreneurs seen them put products and shows on tointerprettelevision networks across the world. almost 90% of its annual $3 billion bud-the rules in a way that shows them howThese are multi -million dollar companies get on tv. misguided they are in their protection- that are prepared to stake millions on The recent NIMA International con-ism. In France, where television hometheir ability to get the product and the ference in Amsterdam (NIMA stands for shopping rules imposed locally are moremedia buy right. Last year, Regal was National Infomercial Marketing Associa- restrictive than any other EC country, responsible for more than 100,000 hours tion) demonstrated a growing interest inTF1 has broadcast a teleshopping pro-of broadcasts on more than 1,200 sta- infomercials from European broadcast-gram that has become an institution. tions in the U.S. alone. ers, as well as being a rallying -point and Called Teleshopping and produced bonding exercise for Europe's growingby a TF1 subsidiary of the same name, band of infomercial and home shoppingthe show airs for 30 minutes, five days a It is reasonable to expect an producers with their American col- week at 8.30am and generates $50 mil- leagues and mentors. Quite clearly some lion a year from sales to viewers, and a major European terrestrial broadcasters further $10 million from sales from cata- influx of big brands and and broadcasting groups were seeinglogs sent to 300,000 clients. Not bad how far and fast direct response wasconsidering no brand names may be developing and what it could mean tomentioned on air. Fabrice Mollier, ad agencies into the business them. Teleshopping's export manager, reckons Infomercials are not new to Euro-that over a year, more than 1,400 differ- peans. Indeed, they have proved vitalent items will be offered over the air, Other infomercial producers, like Bob revenue streams for many of the newand that over seven years more thanWoodrooffe's Interwood Marketing, are commercial broadcasters (particularly 5,000 products have been screened. Theslowly building networks of partners the cable and satellite -delivered chan-price range of the products offered vary across the world from South Africa to nels). And as such, inevitably, they have from $40 right up to diamond rings atChina. In each market there are the attracted the attentions of the regulators.$25,000. Middle price for most products inevitable local difficulties with regula- The EC broadcasting directive says that a is reckoned to be about $100. tion and what is going to work cultural- channel can air up to one hour of pro- Mollier is expanding the format toly, but Interwood is getting infomercials gramming a day that is making a directother countries, working wih localon -air - often seling very basic products offer to the consumer. For some chan-broadcasters on program production as - in what would seem the most unlikely nels this has created some large revenue well as product selection and fulfillment places. gaps - not to mention holes in theof orders. There is also a home shop- Back in the U.S. the rise of home schedule to be filled as slots for infomer- ping channel planned for cable in theshopping channels like HSN and QVC, cials are axed. wings.A cable license hasbeen granted and their headline -catching management

Television Business International July/August 1994 28 ADVERTISING ORIGI A - Barry Diller in particular - is familiarketers from product explanation and "Te Sixties Beat " through all forms of the press. generating awamess to the more tradi- The infomercial business is less well - tional hard sell. An infomercial for documented, particularly internationally. Philips CD-i is an example of a show Sam Catanese, publisher of research firmwhich sold nothing directly but which the Infomercial Monitoring Servicewas designed to help sales at retail out- (IMS), and an infomercial producer him- lets. self, reckons that more than 25% of all Structuring an infomercial deal is not broadcast airtime in the U.S. is paid.cheap. While an infomercial marketer According to IMS more than 270 newneed not make much upfront commit- half-hour infomercials have debutedment to a brand manufacturer - a usual since the beginning of the year. upfront commitment would be between Infomercials are not a marginal activi-$25,000 and $50,000 with the deal struc- ty. Jeff Knowles, NIMA Internationaltured to make further on -target pay- general counsel and head of the Elec-ments or lose the rights to that product - costs start to escalate rapidly when it comes to producing the show and buying the airtime. A simple 30 -minute demonstration show might cost between $100,000 and $175,000 to produce, while a show with celebrities or special effects could run as high as $800,000. To buy a compre- Alk hensive national campaign in BEAT -CLUB the U.S. will cost between $6 million and $10 million. Big Mir costs, but the win can be big. Infomercial producers typically expect to generate in gross sales two to three times the media dollars spent. Williams saysitis not unusual for a product to gen- Sjowall: blazing the trail in Nordic countries erate $60 million a year and on to $100 million and $150 tronic Marketing Practice Group at million over its lifetime. Washington -based law firm Venable, While infomercials may still upset the Baetjer Howard & Civiletti, says that last television purists, those who have to year direct response television generated make television pay can't fail to be inter- $2.2 billion of home shopping sales (via ested in those kinds of returns - The "BEAT co" archive represents 1 broadcasters like QVC and the Homewhether it is to assess how they price hours of RoWnd Pop music at its bes Shopping Network), $900 million oftheir airtime or to negotiate revenue - sens nal collection of artists and gro infomercial sales and $700 million ofsharing relationships with the infomer- brin k memories of when music commercial spot sales. cial marketers. made the heart. Produced from the These are figures that are unlikely to The potential for direct marketing is sixtie he mid -eighties this music is s decrease depite fears that the home -110e and influencing today's increasingly exciting brand manufactur- tastes and emotions. shopping channels will consume all theers and advertising agencies as technol- revenue available. With many of theogy drives television into a new transac- The "BEAT CLUB" Archive is an important Fortune 500 companies either on -airtional era. Already direct response tv is i.1.Jompilation with an enormous historic and with infomercails or starting to explore having a major impact on spot advertis- --Wkrtainment value. It was a crucible for th their marketing possibilities, it is reason-ing. So much so that recent research music video explosion of the eighties. able to expect an influx of big brandconducted by Channel 4 in the UK marketers and their advertising agencies found that 12% of all ads aired on The archive is suitab r all -media into the business. British commercial tv carried a tele- exploitation including CO d CD -Rom and i Katie Williams, whose companyphone number. available for footage use and Williams Television Time acts as a man- Small comfort for an infomercial sec- for conwilatOn co -productions. agement consultant to brand manufac- tor all fired up but with limited places to turers on their infomercial activity, has go. However, as QVC continues to drive worked successfully with Philips, Braun, itself deeper into Europe and its U.S. M&M Mars as well as more recently hav- counterpart the Home Shopping Net- ing just completed an infomercial forwork plots its own European entry, so Fernseh Allianz GmbH Hoover. Williams says an infomercialthe infomercial producers can expect Studio Hamburg can fulfill a number of roles for mar- the opening of a new frontier.BIB Jenfelder Allee 80 D 22039 Hamburg Television Business International luly/August 1994 Tel: 49-40-66885445 29 F(1)( 49-40-6ARR5199 SPECIAL REPORT: NEWS PROGRAMMING

All the world wants news. The market, in the era of global news networks, stretches from Tucson and Buffalo to Tirana and Beijing and the field of all -news broadcasters and all - news suppliers is growing, even if the financial rewards arelimited. But some governments still want to control access to news, and news moghuls appear to be willing tocompromise their ambitions to build global coverage, reports Tim Westcott, kicking off TBI's focus

rmation Circus

Reporting restriction: live news from the world's trouble spots

Television Business International July/August 1994 30 SPECIAL REPORT: NEWS PROGRAMMING

The league of truly globalplementary service, in every Dropping the BBC was notthe UK, obeyed the ban, no media companies isa continent. A few months on,the hardest decision Murdochdoubt to the bemusement of small one, and arguably itthat dog has not been heardhas taken. The BBC alreadythe more numerous body of includes only two players-to bark, while BBC World Ser- has a particularly poor rela-viewers outside the UK. To Rupert Murdoch and Tedvice TV, beaming news totionship with China, whichflout the ban would have put Turner. Murdoch has alreadythe information -hungry resi-was not helped by last year'sit in a tricky situation at a beaten Turner to one of hisdents of Iran, Saudi ArabiaTimewatchdocumentarytime when the UK govern- prized goals - owning a Hol-and China, has been axedabout Chairman Mao's sexment is fighting its corner in lywood studio - and has all the dispute over EU program but secured another- a net- quotas. work. The Australian -Ameri- "Our policy is to respect can has also out-mogulled the laws and the communica- Turner in Asia with last year's "... talk to the otherguy, tions regulations in each takeover of Star TV. country in which we oper- In one area - news - ate," said CNN president Tom Turner can claim to have the Johnson. CNN's experience of edge. CNN International, he's the one who is "complications" is not con- launched nine years ago, has fined to countries with a his- built up a worldwide audi- tory of press censorship, ence of nearly 80 million Johnson pointed out. Israeli households in 200 countries. causing all the trouble" authorities warned the net- Murdoch's Sky News, work not to report on the launched in 1988, is still pre- location of Scud missile dominantly a UK service, attacks during the Gulf War. despite continued pledgesfrom the northern beam oflife (not, incidentally, broad-More recently, it was obliged that it would enter the inter-the Asiasat satellite to becast on WSTV). But althoughto concur with reporting national market. replaced by a film channel.the WSTV channelhasrestrictions on a Canadian Given Murdoch's newspa-Murdoch, never one to worryproved a honey pot formurder trial. per background,itisa much about officialdom,advertiserslured byits "[CNN] is purely a news strange disparity. After all, the noted that "there had beenupmarket audience, even cor- reporting channel and I think pre -CNN Turner used tosome sensitivity, particularlyporation executives agree thatthat fit is] because we really make a point that his stationsabout beaming foreign newsthe replacement of WSTVadhere to very solid standards did not "do" news. Now, atinto China," and pledged:with a Chinese channel madeand try to incorporate both least in the international"We certainly intend to dosense on commercialsides of the issue that we are arena, Turner is doing theeverything we can to resolvegrounds. able to continue to operate in news while Murdoch doescertain difficulties with the The launch of an Asiansome very complicated envi- films, sport and entertain-government of China." OnSky News, according to Johnronments around the world." ment. April 17, WSTV was droppedO'Loan, Sky TV's director ofJohnson said no journalist has But Murdoch's speech infrom the Star TV package. news development, would beever been able to point to an London last September at the Commentators were quicka matter of "what transponderexample of the channel launch of Sky Multichannelsto seize on Murdoch's failurespace was available and whatpulling its punches as a result highlighted the revolution into practise what he had beenthe economics of the situa- global information distribu-preaching. Did the interest intion were atthetime." tion. George Orwell, whokeeping access to a countryWhether there is room in an depicted "the possibilities ofwhich contains a fifth of theextended Star TV for a news totalitarian control" in 1984,world's population outweighchannel may well be the real had, he said, been "provedthat of freedom of informa-test of Murdoch's credentials wrong" by advances in com-tion? If so, it seems, Murdochas a global news mogul. munications technology. isn't the only one to be The dilemma of reporting "Fax machines enable dis- affected. the news while remaining on sidents to by-pass state-con- At the March pan -Asiangood terms with the authori- trolled print media; direct dial satellite conference, Ted Turn-ties is not confined to coun- telephony makes it difficulter indirectly blamed thetries where press freedom is for a state to control interper-Chinese authorities' crack-frowned on. When Larry sonal voice communications.down on the installation ofKing's interview with Sinn And satellite broadcastingsatellite dishes on Murdoch. Fein spokesman Gerry Adams makes it possible for informa-Noting that CNN had beenwas broadcast on the Euro- lion-hungry residents of manytransmitting to the region forpean feed of CNN Interna- closed societies to by-pass12 years, enjoying "an excel-tionalearlierthisyear, state-controlled television lent relationship" with China,Adams' voice was dubbed in channels," said Murdoch. Turner suggested that per-lip-synch by an actor to com- In the same speech, Mur-haps "the other party hasply with the British govern- doch announced that plansanother agenda... talk to thement ban on interviews with were well advanced to launchother guy, he's the one whoAdams' organization. Sky News,ora com-is causing all the trouble." CNNI, which is licensed in Johnson: solid standards

Television Business International July/August 1994 31 SPECIAL REPORT: NEWS PROGRAMMING

of official pressure. John Ramsland, editor offor using Corporation and As a commercial opera-BBC World Service Televi-World Service staff and facili- tion, however, hotel andsion News, pointed out thatties and will now shoulder cable carriage and access tothe Corporation's radio ser-part of the cost for develop- satellite transponders arevice has been dealing withing the BBC's newsgathering. CNN's lifeblood. Like inter-the problem for 60 years. In Asia, the BBC's main national print media such as"We are maintaining a corepriorities are to find a way The Economist, Time andofcorrespondentsandback in to northern Asia and Newsweek, it must continual- stringers worldwide who areto resolve what happens ly run the guantlet of bansthere on the ground andwhen its contract for the and censorship. In additionthere for the long term. southern beam expires in CNN has reciprocal agree- "Our approach is built on March 1996. ments with over 200 broad-the expertise of these people Geoff Hazell, manager of casters worldwide - includ-and the criteria we set our-sales and distribution for ingChinesestatetv-selves are to report thingsWSTV, said it had "made a enabling them to exchangefairly and even-handedly. It'sawful lot of progress" in footage. very hard for people to saylooking for alternative satel- Eason Jordan, head ofwe don't want you around iflite deliveryvehicles. newsgatheringatCNN, you give them the opportu-"Although Asiasathas insisted that "journalists arenity to express their ownbecome the hot bird for the not in the business of worry- view as well as those whoregion, there is a whole O'Loan: news partnerships ing about distribution" of theare expressing a contrarybunch of satellites going up channel. He added: "Time view." in the next few months. Ouris a worldwide news service and time again our reporting Since forming its globalintention is to get back innow. We obviously have a irks officials and government gaping hole in that we're not leaders, what have you. in the United States and Sometimes they express their we're not on in Asia yet. displeasure by just telling us "journalists are not in the Rome wasn't built in a day." they are unhappy with our Without confirming the reporting... sometimes they reports that Sky has spoken ban us from a particular to both CBS and ABC about country for a certain amount business of worrying a global service, O'Loan of time. agreed that "no-one can pro- "It's especially challenging duce a news service by to us because people are themselves. There are vari- watching us everywhere. In about distribution" ous forms of partnerships North Korea, we're being that we could use to achieve closely monitored by the the same ends." Sky News leadership there. The leaderalliance with Pearson, thethere and make sure we getalready has a relationship of the Korean Workers' PartyCorporation is aiming toa ride on the best satellite." with CBS News in the shape told me he's a fanatical CNN build WSTV's coverage fur- Hazell added that 70% ofof the European Satellite viewer." ther than its current claimedthe WSTV audience in AsiaNewsgathering consortium level of 60 million viewers tocan still receive the channeloperated by the two net- something approaching theon the southern beam, butworks as well as Germany's radio service's 130 million. that the northern beam gave RTL, Belgium's VTM and TBS The funding structure is access to important markets:Japan. Sky also has "quite an designed to ensure that nei-Taiwan, Hong Kong, theextensive agreement" with ther the Corporation's license Philippines,Koreaand Reuters. feenorForeignOfficeChina. Hazell even suggests Althoughit recently money which funds thethat the news channel couldclosed its Budapest bureau, radio World Service financework together with CNN inO'Loan said Sky News had the television operation.the region. "We would be "greatly increased" its infras- Ramsland said this systemhappy to be on the sametructure for international meant the commercial sidesatellite as CNN. Wherevernewsgathering over the past of WSTV is totally separate possible, broadcasters should year. from the editorial side. co-operate in the sky even if Since then the global "Commercial considera-theycompeteonthenews service appears to have tions do not impact on theground." been relegated to the back - editorial decision -making at John O'Loan said of theburner. The appointment of all." Although he concededglobal news service Murdoch Kelvin McKenzie, doyen of that the tv and radio newstalked about in his Septem-British tabloid journalism, to staff which WSTV can access ber speech: "We still havehead Sky TV, does not seem would not have been therethat hope and desire. It's justto fit in with a plan to com- had it not been for Corpora-that we haven't worked outbat Turner and the BBC at Jordan: North Koreans tune in tion money, WSTV will payhow to do it yet. Sky Newsglobal level.

Television Business International July/August 1994 32 SPECIAL REPORT: NEWS PROGRAMMING

first quarter, Johnson said itMurdoch said at an L.A. news knowledge into many kinds Turner's frequent would have reached its objec-conference earlier in the yearof physical and social activity,unprompted references to tive of carrying 70% originalthat the stake held by cableto generate wealth in new "the other party" in interviews output, part of it produced byoperator TCI in CNN made itways, and in doing so to alterand speeches suggest that for a new Hong Kong productionimpossible to launch a rivalprofoundly goals and values.him, Murdoch looms large as center which will come on-news network in the U.S. We are moving towards aa competitor. So far, howev- line by then. William Shawcross, whoworld in which informationer, the other party has given The BBC is also looking tosubtitled his biography ofproduction and distributionno indication of where his launch a service for the U.S.Murdoch "Ringmaster of thewill overshadow material pro-true role in the information and is reportedly negotiatingInformation Circus," writesduction." circus really is. with Cox Cable, its partner inthat the "infor- European satellite channelmation area" UK Gold. has now There are also possibilities replaced agri- outside the cable environ-culture and ment. Johnson said that CNNindustry as one could,in the long term, pro-of the major vide a news service to one ofengines of the networks to save costs. social develop- MeanwhileMurdoch'sment."They swoop on the New World sta-are being tions has revived speculationreplaced by a about Fox launching its ownforce which is news service, and Sundaystill undefined. Times editor Andrew Neil has Itdraws on been drafted to the U.S. to human add weight to the Fox newsresource capi- operation.Significantly,tal to transfer Ramsland: Commercial considerations do not impact on editorial

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Three Is A Crowd

A Reuters cameraman keeps filming while police fire on ANC demonstrators in South Africa: news agencies ensure no story is leftuncovered The television news agency business is hotting up, with AssociatedPress launching a tv service later this year to compete with Reuters and WTN and changes in major alliances between agencies and broadcasters. Nick Bell looks at a market where both the suppliers and the buyers are influx

Until recently the television ber of channels over the pastnization. AP believes televi- Although Reuters TV and news agency business hasfew years, they are still theson to be a strategic impera-Worldwide Television News been a quiet backwater ofonly players in the game. Buttive for future growth, and itare making up -beat state- an industry undergoing revo-that is all changing. The busi-is clearly prepared to makements about welcoming new lutionary change. ness has entered a period ofthe necessary investment tocompetition, there is plenty For as long as televisionupheaval that is shattering abreak into the market. Aof cause for concern, with memories stretch back therestatus quo four decades old. recent order it placed withsome observers doubting have always been just two A third television newsSony for equipment to kit outwhether the market has room specialist companies whole-agency will be operationalthe new venture ranks as theenough for three players. saling international newslater this year backed bybiggest the Japanese electron- WTN has 38 principal footage to broadcasters and,Associated Press, the world'sics corporation has everbureaus around the world, despite the exploding num-oldest and largest news orga- received. while Reuters (which also

Television Business International July/August 1994 34 SPECIAL REPORT: NEWS PROGRAMMING

owns a pressagency) has 120the capacity of the agency bureaus, and both have business is inevitably going to access to 400 camera crewslead to a fierce battle for mar- who are linked back to head-ket share even if the number quarters via global satelliteof tv channels around the networks. They churn out aworld continues growing vast amount of news andrapidly. "We're not expecting sports footage - Reuters isto be established insix adding about 15,000 items tomonths; there's a ten-year its library every year - todevelopment plan behind this clients who pay a subscrip-[venture]," said Steven Clay- tion fee to access them. Sub-pole, head of APTV. "We're scribing channels will usually coming in here with the add their own voice-overs intention of staying." and editorial slant. WTN Broadcasters need agen- claims around 1,000 cus-cies because being complete- tomers in 80 countries andly self-sufficient in interna- Reuters 200 broadcasters plustional news gathering would their affiliates (the figures arebe economic lunacy - even not directly comparable) infor a 24 -hour, global network 84 countries. like CNN. The costs of run- AP, which has 229 pressning an international network bureaus around the world, is of journalists and cameramen recruiting 150 people world-are very high, and even if a wide for tv, with each staffernetwork did make a massive backed up by about two part-investment it still wouldn't be Claypole: "We're coming in here with the intention of staying" timers. This quantum jump inable to cover every good

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For further information,contact: MAP -TV Secretariat Executif GO France 3, Place de Bordeaux, 67005 Strasbourg Cedex, France. Tel.:+ 33 88 56 68 46/47/48 Fax : +33 88 56 68 49 SPECIAL REPORT: NEWS PROGRAMMING

ferentiate one ser-example of a newsgatheringCLT recently announced the vice from another,co-operative between broad-creation of a newsgathering so the competitorcasters. It played a pioneeringarrangement between the offering the cheap-role in newsgathering whenhalf -dozen European chan- est service will winin 1953 it set up its own ter-nels in which itis a share- market share.restrial communications net-holder. In another deal CBS, "Clients are tellingwork able to relay pictures ofSky News in the UK, VTM in us that news distri-Queen Elizabeth's CoronationBelgium, Germany's RTL and bution and syndica-from the UK to broadcastersTokyo Broadcasting Systems tion is all beginningthroughout Europe. Thishave agreed to share satellite to look the same,"became a permanent networktransponders and ground said APTV's Clay -paid for by the EBU mem-hardware equipment, which pole. "Thirty to 40%bers, and the two agenciesnot only eats into the busi- of one feed willwere allowed to use it to dis-ness of third party facility ser- look pretty muchtribute coverage to their sub-vices provided by the agen- the same as the scribers. cies but could also evolve to next. APTV will be The EBU's Eurovision include news sharing. very competitive onnews exchange is the biggest In 1992 a major realign- the top stories andsharing arrangement amongment between broadcasters active in certainbroadcasters, with its mem-and agencies occured, the niches." bers distributing Claypoleisn'tnews footage to Cramer: looking for partnerships disclosingwhatone another free niches APTV hasof copyright. identified, thoughEvery day there news story breaking aroundobviously providing a greaterare six fixed times the world. In the main, itis national and regional feel towhen members only the public broadcastersnews would be attractive toreview footage, and the U.S. networks whobroadcasters. However, doingeach session last- have sizeable internationalso will also add to the costsing for between news operations; for the restof the operation, and it is20 and 45 min- it is simply not worth it. something that Reuters andutes,plusan International news doesWTN are also doing. average of about not pull in high ratings and Last year WTN reportedlythree flash items. so newsroom editors tend to made profits of $5 million, upReuters and WTN adhere to the principle that36% on the previous year,pay afeeto there is only one kind offrom revenues up 11% to $63access material news - there's domestic newsmillion. Reuters does notwhich they then happening at home andbreak out figures for tv, butdistribute on to there's domestic news hap-the business is profitable andtheirnon-EBU peningabroad.Viewersbigger in revenue terms thansubscribers. "Alto- watching CNN or any otherWTN's. Although both com-gether there are U.S. network last year duringpanies are involved in busi-about 20,000 the policing of Somalia wouldnesses other than the coreitems exchanged be ignorant of the fact thatnews agencies (such as non -per year. I can't there were just as many Ital-news programming, librarythinkofany ian and Pakistani troopssales and satellite services),broadcaster in the involved as Americans. they probably do not have aworld with an "The value of internationallarge cushion against lossesappetite for that news is low, except in thein the event of a price war,amount of news," case of exclusives of majorjudging by WTN's modest 8%said Naetes. events and they're prettynet profit margin. Although the Jare: news is seen as an integrated package rare," said Tony Naetes, head The uncertainty created byEBU is a resource of the news division of theAPTV's imminent arrival isforthenews European Broadcastingnot the only change that theagencies it is also a competi-knock -on effects from which Union. "Most stories are sotwo agencies are having totor, and if more broadcastershave yet to fully run their well covered now, nothing ingrapple with. Internationalclub together it could makecourse. It was triggered when this world can happen with-newsgathering operatesfor a tougher marketplace.Reuters wholly acquired Vis- out at least one of Reuters,through a complex web ofNews -sharing alliances havenews, re -naming it Reuters WTN, an EBU member oralliances and co-operationalways existed outside theTV, by buying out the BBC someone else covering it." agreements among broadcast-EBU, but recently alliancesand the U.S. network NBC, Ths implication is that theers and the agencies, withhave started forming betweenwho were minority share- news agencies are operatingnew ones forming and oldthe younger and growingholders. "The BBC's and in a commodity -type businessones breaking up. commercial broadcasters. NBC's interest in Visnews was in which itis difficult to dif- The EBU is the premier Luxembourg media groupto underwrite the cost of their

Television Business International July/August 1994 36 SPECIAL REPORT: NEWS PROGRAMMING NEWS

international coverage," said Enriquebroadcasters such as the daily Break- GATHERING Jare, director of Reuters TV. "Theyfast News it produces for GMTV in the weren't really interested in selling itsUK and a weekly current affairs show services." for the Russian broadcaster Ostankino. A few months later,Reuters It also plans to launch a Spanish -lan- VIDEO became an 18% shareholder in Inde-guage 24 -hour news network deliv- pendent Television News. Traditional-ered by satellite to Spain and Latin ly ITN only syndicated news pro-America. Called Telenoticias, the ser- PRODUCTION grams to the UK's commercial broad-vice is being launched in partnership casters, who also owned it. But awith Telemundo Group. Starting in change in regulations freed it fromSeptember, Reuters is acting as a dis- SATELLITE these constraints and ITN is now oper-tributor for a weekly 15 -minute news ating as a profit -making commercial feed supplied by a specialist UK -based enterprise selling programming toagency, World Environment News, to TRANSMISSION other broadcasters such as NBC SuperEurope and the Americas. Channel. Television is also central to Reuters. As a result of these changes ITN'smultimedia strategy. The Reuters From Conus' studios, teleports close relationship with WTN, datingGroup not only operates one of the and news bureaus in from 1956 and formalized through alargest press agencies, but it is also a Washington, Los Angeles, New 10% shareholding in the agency, looksleading supplier of information and York, Tokyo, Budapest, and like coming to an end. This woulddealing products to the financial com- Minneapolis; mean that ITN will no longer usemunity. "As a news organization it1,, From any location in Eastern WIN's services and WTN will stop also appropriate to incorporate mox Europe, or even the Middle East distributing ITN's material worldwide. ing pictures," said Jara. "Content is InthemeantimetheBBC converging into a single stream of bits, and Africa, via our "fly -away" announced a news -sharing agreementand the customer is beginning to look satellite news gathering unit; with NBC's rival ABC, which in turn isat news not in its individual format,, From any news event or an 80% shareholder of WTN. but as an integrated package." production location in North "The reason that the BBC News Reuters critics say that the company America, via Conus' satellite signed with ABC is that we want towill alienate its news agency clients by transmission vehicles, mobile form partnerships around the worldmoving downstream into broadcasting video production facilities and with like-minded broadcasters whoand, in effect, competing with them satellite news gathering have the same commitment to, andfor audiences. Not so, said Jam: willingness to invest in, international "Telenoticias is at an arm's length. organization, the world's first news," said Chris Cramer, head ofIt will operate as if it's a company on and largest. BBC newsgathering. "We're notits own and it will subscribe to WTN." To you. Wherever in the world divorcing [our previous partners], it's Reuters recently launched a finan- you are. Whenever you want it. just a cooling of relationships." cial television news service, delivering Exactly how you want it. And All this activity points towards alive coverage of key market events on budget. close co-operation between Reutersand commentary from leading finan- and ITN (who share the same buildingcial analysts to information screens in Conus is the USA's largest in central London), perhaps recreatingdealing rooms. Reuters will eventually independent television news the sort of relationship that ITN hadcreate a multimedia database deliv- gathering and video production with WTN, while the BBC appears toered on its telecommunications net- company, providing broadcasters be drawing closer to WTN via ABC. work (which is the largest privately - throughout the world with direct Reuters and WTN are steeringoperated network in the world and access to events, information and markedly different strategic coursesalready fully digital) to its clients in technical facilities. Our goal is to through the turbulent waters of thethe financial markets. Dealers and provide our clients with the news agency business. WTN has beenanalysts will, for example, call up real- resources and innovative solutions diversifying into other forms of pro-time and historic data on a company's they need to implement their gramming specifically targeted at theshare price along with interviews of new international television market oftop executives. news and television programming young stations. Leveraging off its Like Reuters, APTV is a believer in decisions. existing relationships with hundred ofthe multimedia future and that to con- channels, the company is producingtinue thriving as a news organization programs like Earthfile, about envi-it has to offer a video stream. Claypole c4nius ronmental topics, the news magazineenvisages that within a few years the Roving Reporter, the youth -orientedcompany will be offering news on INTERNATIONAL News Wrap for MTV and the crimedemand and electronic encyclopedias Conus Communications series Crime International. updated on a daily basis. 3415 University Avenue, Minneapolis Reuters TV is also moving into pro- But by the time these new products Minnesota 55414, USA. gramming but remaining within thestart making money it is quite possible Phone 612-642-4645. Fax 612-642-4680. field of news. It is moving down-that all three players will have spilt a 1825 K Street NW, Washington DC stream from its agency business byconsiderable amount of red ink get- 20006, USA. Phone 202-467-5600. creating customized programs forting there. BM Fax 202-467-5610.

Television Business International July/August 1994 37 SPECIAL REPORT: NEWS PROGRAMMING

Broadcasting executives inarguing that much of n-tv's Atlanta, CNN Internationalviewing takes place in busi- posted profits of $45 millionnesses and hotels which are in 1993 on revenue of $110not measured. Kuhlo main- Making The million. tains that in reality four mil- CNN has proved that therelion people watch n-tv for at is money to be made fromleast 15 minutes per day. what cable distribution there Nevertheless n-tv, which is is in Europe and from thenow being marketed by the underdeveloped pan-Euro-Holtzbrinck publishing group, Wrong Kind pean advertising market. has seen fit to slash advertis- News, however, does noting rates to a guaranteed cost come cheap. LCI, the leastper thousand of DM16 ($10). costly of the four all -newsOppermann said that the rate channels currently offered tonow compared favorably European viewers has anwith the main networks and Of Headlines annual budget of $28 million,that his agency, which buys while that of n-tv weighs in atfor Mercedes Benz, Beiers- $62 million. Unlike the U.S.,dorf and Henkel, would now the advertising communityconsider using the channel. has still to be fully convinced Thebargain -basement Millions of Euronews, a co-operativethat the news channels,approach contrasts with the venturebetweenpublicwhich typically register smallupmarket pitch of the chan- dollars have broadcasters part -funded bydaily viewing figures, arenel, which devotes around a the European Commission,worth their money, andquarter of its schedule to been poured into by Germany's n-tv and, fromaccess to a second stream offinance and business and is last month by La Chaine Info,revenue from subscriptionlinked by satellite to the European news operated by France's leadingand cable fees is problematic. Frankfurt money markets. private broadcaster, TF1. In Germany n-tv has regis- A similar pitch has under- networks aiming By the end of the year,tered viewing of only 30-pinned the overhaul of NBC Telemundo and Reuters are40,000 on the Gfk audienceSuper Channel, which has to steal some of planning a Spanish -languagemeasurement system - hardlyentirelyscrappedmusic news channel which will beenough to inspire CNN's thunder, distributed in Spain and theconfidence among BBC aims to convert Worldadvertisersand but as yet the Service TV into an all -newsoffering nothing format. NBC, having boughtto back up the Turner channel is and rebranded Super Chan-claimthatthe nel, has built up a schedulechannel is deliver- the only one which majors on news anding a predomi- business to pitch for the high -nantly upmarket making money, demographic audience reac-audience. hed by CNN. Last, but not Henning reports Marie least, Sky News, on the airOppermann, head since 1988, serves the bur-ofresearchat Beardmore geoning UK direct -to -homeHamburg media and cable market. buyer debis "We expect intensifiedG.F.M.O., said that There isstill only onecompetition in the interna-advertisersare benchmark for tv newstional marketplace," said Tomusing the channel networks: CNN. AfterJohnson, president of CNN.more or less on twelve years on the air, Ted"We will continue to do ourtrustthatthe Turner's channel may novery best to emphasise ourviewing will have longer be unchallenged incompetitive edge, which isa greater repre- the 24 -hour news game but itlive coverage of global newssentation of the is almost certainly the onlyevents." "higher target one showing a profit. CNN has so far exploitedgroup" than other In Europe, where aware-its major competitive edgechannels. ness of CNN reached near -over the new pretenders - its Dr Karl -Ulrich saturation point in the wakepracticallyunchallengedKuhlo,founder of the Gulf War, the networkdominance of the 60 million -and managing has steadily built up availabil-home U.S. cable market - todirector of n-tv, ity and revenue from advert-invest in its overseas distribu- has unsurprisingly isers. But competition hastion and production facilities.taken issue with sprung up in the form ofAccording to senior Turnerthe Gfk system, Kuhlo: Claims four million viewers for n-tv

Television Business International July/August 1994 38 SPECIAL REPORT: NEWS PROGRAMMING

videos from its schedule andservice LCI has effectivelyic: "Cable needs us as muchscription revenues and adver- bolstered its business pro-sounded the death knell ofas we need cable," he said.tising, Sky News, which is gramming supplied by CNBCEuronews Francais. And"We have conducted researchstill in the clear, acts as a and Financial Times TV. Euronews Deutschland is inand each time it has shownloss -leader which is good for NBC Super Channel chair-disarray because, although itthat people would subscribethe credibility of the overall man Patrick Cox believes thathas a partner in ARD sub -to cable first for movies and service. the market of light viewing second for information." Likewise the presence of executives is largely Another advantage thatCNN and Time Warner on its untapped in Europe, and that "It would be a LCI has is the comfortingboard appears to be n-tv's the cost of using general partnership with a very bigbest hope of survival. "They entertainment channels to broadcaster. "LCI will have allsupport us because we have reach them is prohibitive. The miracle if n-tv the resources of TF1 at itssomething to offer them, we channel is preparing to spend disposal," said Gouze. "It willare a good product with an $4 million in a consumer have its own identity andimportant audience," said advertising campaign this fall went into the presenters but will also be Kuhlo. aimed at hoovering up any able to call on the technical CNN has also talked to LCI advertising dollars that are services and pictures of TF1."and although it is keen to be available. black this year or The channel is expected toinvolved with the channel, The decision about cost an estimated FFr120-the dispute over its sister whether the best market for FFr150 million ($22-28 mil-channel TNT/Cartoon Net- news channels is pan-Euro- even next year" lion) per year. But analystswork has made it a difficult pean or national is a crucial reckon TF1, which postedtime for the French company one. NBC Super Channel i, profits of FFr459 millionto make any commitment. available in 30 million homes, sidiary launus Film, under($83.5 million) in 1993, can The real tester for CNN while CNNI currently reachesGerman law public broad-sustain a loss of FFr100 mil-will come in five or six years' 25 million and Euronews 13casters cannot receive statelion ($17.9 million) a year ontime when the up and com- million. Greater distribution,handouts, putting the futurethe project. ing channels have built up a it is argued, compensates forof the venture into doubt. Sky News, which did notloyal following of their own. the low ratings and offers In addition, national chan-have the same advantage, has But the new players know access to the kind of advertis-nels can automatically jumpa technical reach of 3.6 mil-that it will be a long and ers - finance, travel, comput-the queue for cable carriage.lion households,allbutarduous battle. Kuhlo certain- ers and luxury goods - whichIn France, LCI secured com-730,000 via DTH. Its share ofly knows it. "It can take years Already use the internationalmitments from all of the bigtotal viewing in a typicalto get to black figures; it print media. four cable operators beforeweek is around the 1% markwould be a miracle if we However, with the size ofits launch. Lyonnaise Cablein satellite homes; an estimat- En-tv1 made black figures the pan-European marketshunted BBC WSTV (at pre-ed 100,000 watched its mostthis year or even the next generally estimated at nosent an entertainment service)popular program in the week year." Fill more than $100 million, thereout of its basic service intoending May 22, rather fewer is not much to go around.extended basic, where view-than the number of people Sky News, which is generallyers will need a Visiopasswho read a quality newspa- sold as part of a packagedecoder to see it at a cost ofper. Estimates of Sky News' with the other BSkyB chan-an extra FFr30 ($5.50) perannual ad revenue range nels, seems to sell out mostmonth. Euronews was movedfrom £11 million ($16.5 mil- of its slots while CNN breaksto squeeze in the newcomer, lion) a year (media buyer Ini- are full of endless channelalthough it stays in the basictiative Media) and, according promos and direct response tier. to a more optimistic City ana- ads. Even so, few observers If n-tv has failed to find itslyst, £22.5 million ($33.75 mil- believe that Sky News is mak-feet in a market of 17 millionlion) out of total ad revenue ing enough money fromcable homes, what are the of £80 million ($120 million) advertising to cover its annualchances for LCI in a countryfor the whole BSkyB pack- budget of £25 million ($36where cable reaches only 1.2 age. million). million households? LCI is Like LCI, the profitability Euronews, which alreadymaking up for the problemSky News will be enhanced broadcasts in five languages,by charging cable operators aas the universe expands, but is looking to increase thefee of FFr6 ($1.50) perits prime function is not to amount of "local" program-month, and there is also agenerate major profits. As ming in France and Germanypossibility of carriage in theone of six BSkyB channels, by establishing national win-Canal Satellite DTH package, Sky TV director of news dows. So far it has not metwhichreaches 122,000development John O'Loan with a great deal of success.homes. said "Sky News is important A rift between the French Sylvain Gouze, deputybecause it completes the government and TF1, managing director at LCI isBSkyB package, enabling us Euronews' would-be partnerconvinced that the relation-to carry a well-rounded ser- inthe venture, and theship between LCI and its dis-vice." While the film and advent of TF1's own newstributors can only be symbiot- sports channels rake in sub- Gouze:Cable -friendly

Television Business International July/August 1994 39 ADVERTISING LONDON

Account moves in advertising do not normally make international headline news. But they do if the company in question is the fifth biggest in the world, if the budget could be up to $500 IBM Predicament million, and if the said company is reducing its worldwide roster of advertising agencies from more than 40 down to one. The company in question is IBM. It awarded its entire business to Ogilvy & Is Not Unique Mather at the end of May. Acts of globalization almost never come as big as that. It instantly prompts the question: are we witnessing a trend, and if so, what does ishing effectiveness of spot advertising, it mean for tv companies? caused by the growing cacophony of One swallow does not make a sum- messages. More products and more mer, and it is surprising how little pub- labels on the shelves; more television lished evidence there is testifying to the channels and more media generally; and existence of globalization. Intuitively, more advertising clutter. one suspects that internationalization, if In short, it seems that advertisers not globalization, of brand communica- have entered the age of the megaphone, tions is a current trend. Thus, comment- where they have to shout louder in ing on the IBM decision to entrust its order to be heard, and the value of the entire advertising account to one agen- advertising dollar is shrinking. cy, Harry Reid, the European chairman This undoubtedly is a global trend. In of Ogilvy & Mather, was quoted in The the case of advertising clutter, there can Wall Street Journal as saying that be very few countries, if any, where "There's been an explosion in the members of the public on average do amount of pan-European advertising." not see more commercials a day now Because of the demands of major multi- than they did ten years ago. Of course national advertisers for wider cam- BY TOBY SYFRET there is clutter and clutter. At the upper paigns, O&M has "had to centralize extreme, American and Japanese view- more to serve their requirements. And ers are exposed to more than 100 com- we've put an enormous emphasis onvalue terms has become more fragment-mercials per day, which is still several productivity." ed and more differentiated. It seemstimes greater than the daily exposure of It is questionable whether globaliza-that, in trying to keep up with the frenet- the Germans, Dutch and British. Howev- tion or internationalization per se areic pace of change by scampering down er, there seems to be only one direction important. Much more interesting, andevery business corridor; IBM is in severein which the laggards are heading. possibly significant, is why IBM and oth-danger of losing its "IBM-ness" as its Theoutcome is that, even if the big ers are going down this route. sprouting off -shoots go their own pro- advertisers are spared the commercial Where IBM is concerned the causesmotional ways. Hence, the latest boldtrauma to which IBM has fallen victim, appear specific. It has been a colossus inand desperate gamble to pull everythingthey too are at risk over maintaining the the computer world for as long as any- back to the centre by re -asserting theidentities of their brands. One strategy is one can remember. In the process ofIBM brands. to simplify communications by laying attaining giant status, the name of the And yet, there does seem to be a par-greater stress on the company name company has become a symbol of tech-allel case for treatment. In T.S. Eliot'sbehind the array of product brand nical excellence and steadfastness. play The Cocktail Party the head of anames. Indeed, I suspect that if you But, as everyone knows, IBM's leg-sanatorium says to one of his patients, were to compare the sum of promotion- endary stature grew out of its domi- "All cases are unique, and very similar to al messages from pack design to tv com- nance of the mainframe business; how-others." Similarly, it could be said that mercial for the big fmcg multinationals, ever, conditions have changed drastical- IBM's predicament is unique and isyou would find ample evidence of a ly in recent times owing to the phenom- shared by many other companies inrecent and ongoing shift in emphasis enal growth in computing power. unrelated product sectors. The problem,from individual products towards the As a result, the core market for com-which the big television advertisers allhigher ground of product ranges and puter hardware and software products inface one way or another, is the dimin-company brands. Supposing that this shift in communications really is occurring, the question Even if they are spared IBM's for tv companies to ask is whether their biggest clients will continue to rely so commercial traumas, advertisers are heavily on tv generally, or spot commercials in particular, as they try to come to at risk over maintaining the terms with the megaphone culture; be this at the level of the globe, the conti- identities of their brands nents, or the countries of the world. WI

Television Business International July/August 1994 40 DATA

TV Is Dead...Long Live TV

As the discussion about the deploy-A survey by the IIC mapped out the expected ment of advanced video technology reaches the popular press, the level time of arrival of an array of new technologies. of hype increases in proportion. Let's look at terrestrial digital television. Digi- As Jean -Luc Renaud reveals, broadcasters still tal modulation techniques for this modehave some breathing -space of transmission are still being tested in laboratories, but if one were to believe the press, terrestrial digital tv is around Rom, CD-i, and, why not, virtual reality,CD players, CD -Rom, CD-i, virtual reali- the corner, becoming fully operational are bound to dent the traditional broad-ty); Image Display Systems (widescreen, in a couple of years, with the switch -off casters' market. flat panel display, HDTV sets). of the existing Pal norm predicted in But when will this challenge become It is clear that the size of a country, its seven to 10 years. irresistible? If one goes by the findingslevel of technological sophistication and Whether those who expound thisof a recent study carried radical timetable believe in it is open to out by the International question. Their objective seems to be toInstitute of Communica- Table 2 - Advanced Television Services tions (IIC), broadcasters frighten into extinction the conventional Market Penetration (TVHHs) terrestrial generalist advertising orwillstillenjoy some 40% license -fee supported broadcasters -breathing space for a NI Near -Video -On -Demand to Video-On-Deman these alleged technological dinosaurs -good many years 30% and clear the way for the new digital come. Interactive TV interactive video world. An independent, 20% Should traditional broadcasters be multi -disciplinary organi- worried that their "sell -by" date is soonsation with a world-wide 10% approaching? Surely, no condition ismembership representing permanent. The widespread use of thea broad variety of interest 0% VCR has been challenging for quitein the communication 1995 2000 2005 2010 2015 some time broadcasters' ability to con-field, the IIC designed Year struct advertiser -friendly, linear tv sched- "technology timelines," ules. With the explosion of the rentallocatingintime the and sell -through video markets, timeexpected introduction of various digitalthe presence (or absence) of an industri- spent watching tapes is time spent away technologies and plotting their anticipat- al/communication policy will very much from the broadcasters' fare. ed market penetration over the next 20impact on the deployment of advanced New systems will further challenge years. services. Because of the small size of the traditional broadcasters, fighting for the The timelines, covering 16 digitalsample of respondents, it would have attention of the viewers. Interactive tv, media, were based on questionnairesbeen unwise at this stage to identify dis- satellite digital tv, near -video -on -completed by some 40 internationaltinctive trends in Europe, Asia, North demand, video -on -demand, but alsoexperts from 12 countries. Respondentsand South America. In the context of this "off-line" systems such as Video CD. CD -were chosen by an IIC panel and includ-exercise, the figures relate to countries ed heads of laborato-currently capable of developing and ries, chief engineers,deploying the various services exam- Table 1- Transmission Media For Digital TV technology strategists ined. and technology poli- "Market penetration" in the tables Market Penetration (TVHHs) cy planners -all means the proportion of tv homes which recognised experts in are equipped to receive particular digital 70% 111. Satellite DTH their field. services. Table 1 confirms the view that Cable TV 60% Technologies were satellite will be the first distribution Terrestrial Optical fibre dividedintofourmedium to use digital compression. 50% broadcategories: Interestingly, the experts think that satel- 40% Advanced Television lite -delivered digitally -compressed tv Services (interactiveservices will only be overtaken by co- 30% tv, VOD, NVOD);axial cable after the year 2000 - despite 20% Distribution Tech-cable's clear advantages in delivering nologies (digitalinteractive services. Maybe the experts 10% cable, digital satellite, think that compression advances will 0% II digital terrestrial, opti-mean that the telephone system will be 1995 2000 2005 2010 2015 cal fibers); Advancedsufficient to provide all the return band- Year Media Systems (Video width anyone will require on satellite in

Television Business International July/August 1994 41 DATA

he available via co -axmay be the reason why their growth will keep up with that of high -resolution flat Table 3 - Image Display Systems cable and optical fiber. After all, the telephonepanel displays until 2004-2005. As the companies, who initiallyprice of flat panel displays become more Market Penetration (TVHHs) competitive, they will clearly overtake 50% developed VOD, always Wide-screen TV sets said that the provision the bulky HD sets. Latecomers to HDTV 40% HDTV sets of the service via twist- may go directly for a flat panel HD dis- Flat panel displays ed copper lines usingplay, whereas tv homes that adopted 30% the ADSL technologywide-screen tv early may buy an HD set 20% was only an interimas well. Multi -set tv homes will he the stage before the deploy- norm. 10% ment of optical fiber What about "off-line" or "in-house" video services, as opposed to "on-line" 0% networks. It could also 1995 2000 2005 2010 2015 well be that cable oper-or "transmitted" services, examined so Year ators will move into thefar? If the experts are rights, viewer/con- VOD business on theirsumers will not rush to acquire the CD - the short term. co -ax (or hybrid co-ax/fiber) networks.based system - market penetration for Terrestrial digital broadcasting is aAlthough the architecture for the supplyVideo CD players and CD -Rom is put at distant third. The slow penetration ofof VOD services is undoubtedly more around 35% by the year 2015 (Table 4). digital set -top decoders for reception ofcomplex than that for terrestrial digital services - 25% of total interactive television. tv homes by the year 2000 - may havethe latter does not Table 4 - Advanced Media Systems to do with the rich service offeringappear to seduce as which will already be available on satel-many viewers (or Market Penetration (TVHHs) 40% lite and cable at that time. experts) as the for- Video CD players Table 1 also shows the inexorable mer. Ell CD-ROM rise of optical fiber which slowly Will there be ten 30% CD -I replaces co -axial cable. No doubt thatmillion (West) Euro- VR systems by the year 2000 and beyond, set -toppean homes with a 20% digital decoders will be multi -standard, wide-screen tv set in accommodating reception of signalssix years' time, as 10% coming from cable, satellite and terres-predictedbythe 0% trial transmission networks. Thus, theexperts (Table 3)? 1995 2000 2005 2010 2015 choice of signal sources will likely be Possibly, especially if Year determined by the unique variety of ser- the European Com- vices which will distinguish satellite,munity Action Plan cable and terrestrial program providers. subsidies for the promotion of advanced It would seem strange that CD-i, Table 2 is testimony to the fact thattelevision are converted into action.working in conjunction with a tv set digital satellite programmers have been "Wide-screen" in the table means a 16:9whose penetration has reached satura- positioning themselves as providers ofcathode ray -tube screen with convention, is beaten flat by CD -Rom, which near -video -on -demand (NVOD) services tional 625 -line pictures. requires desk -top machines whose mar- par excellence. But they are about to When fully-fledged high definitionket penetration is at best a quarter of face tough competition with the emer-television programming will start beingthat for a tv set. It is not so if the CD - gence of video -on -demand (VOD). Thetransmitted, it will ignite a market forRom category includes all the gaming fact that VOD will beat NVOD in popu-HDTV cathode ray -tube sets. More cum- systems, which are hot items. They are larity some time between 2010 and 2015bersome than the emerging flat panelhighly interactive, but currently offer strongly suggests that VOD services will displays, HD sets are cheaper, and that lower picture quality than CD-i does. It remains that CD -Rom will maintain its present market lead over CD-i well into Table 5 - Projected 1999 Distribution Of U.S. TV Viewing Shares the next century. Video CD - which is the "linear" With 40 million digital households With 100 million total digital households* White Book standard - will, however, Digital services 8% Digital services 20% steadily gain on it. Maybe the experts Interactive 1% Interactive 2% believe VCR owners will progressively 9% Movies -on -demand 4% Movies -on -demand trade in their VCRs for Video CD play- 9% Other Video -on -demand 4% Other Video -on -demand ers, and since the installed base of VCRs Cable TV 26% Cable TV 34% is so huge, this will give rise to a very Pay channels 4% Pay channels 5% high Video CD penetration... and a fur- Basic channels 22% Basic channels 29% ther occasion to watch non -broadcast Broadcasting 66% Broadcasting 46% television. Network affiliates 51% Network affiliates 40% Other (independents Other (independent The author, who has been an advisor to & public tv) 15% & public tv) 6% the HC on this study, thanks Tom * excludes shares of viewing of HDTV services Source: Discovery Communications Inc McQuaide, HC's principal investigator, for his assistance.

Television Business International July/August 1994 42 Calling All Producers & Distributors Worldwide

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PRODUCT NEWS

NBC has joined forces with French Indie Looks Abroad Canada's WIC Western Interna- tional Communications and Cata- FRENCHindependent AB lyst Entertainment Inc to produce Productions has begun devel- the Martin Short Show, which will opment of four foreign -lan- be aired on the U.S. network and guage versions of its success- in Canada this fall. NBC has ful youth -oriented shows in ordered 13 episodes of the France. sketch/comedy show starring Four AB series dominate the Canadian -born actor, which the 6pm to 8pm slot on will be broadcast on stations French private broadcaster owned by WIC, Canwest Global TF1. Thirty -minute episodes and CFCF in Montreal. Shooting of Le Miel et les Abeilles, Les will start at NBC's studios in Bur- Filles d'a cote, Premier Bail- bank before moving to Canada ers and Helene et les Garcons for the 1994/5 season. are currently stripped across Catalyst has meanwhile sold an TF1's primetime-access equity stake to the UK -based scheduleinatwo-hour independent producer Britt All - block. According to sales executive Manuel Catteau, the company has already completed 26 German -language episodes of Helene et les Garcons for private broadcaster RTL. Additional pilots have also been completed in Le Miel et les Abeilles: appealing to foreign tastes? English and Spanish.In Spain, where the show is already aired in a may notbe adapted into French -language ver- croft. The two companies already dubbed form, negotiations are ongoing withsions. One of the first, a proposed youth co -produce children's show Shin- two Spanish broadcasters for the formatseries called Making Waves, has already ing Time Station. Charles Falzon rights. Talks are also being held with undis-reached the pilot stage. (above}, president of Catalyst, closed U.S. cable channels. Aside from the While the business of formats has to date said the new investment would U.S., an English -language pilot also opens up been most prolific in the areas of gameshows, go into financing distribution pro- the possibility of a sale to other English- the universal nature of youth issues make the jects through a fund which will speaking territories such as Australia, New series perfect for adaptation... and cheap. be renewed every five years and Zealand, Canada and the UK, said Catteau. All the formats are made within the con- into development. The original French version of Helene et les fines of AB's extensive studio complex in Dutch Independent production Garcons, of which there are currently 300Paris and use the same sets and scripts, with a company Blue Horse Productions episodes of 30 minutes each (four episodesfew modifications. "The actors are different is developing an English -lan- are produced daily), has been sold as afor each version but they basically look the guage feature film called Cross dubbed version into parts of South America same," said Catteau. "We make a few cultural My Heart and Hope To Die with and Africa, Belgium, Switzerland, Norway andadaptations such as replacing the bottle of German media giant Bertels- Greece. wine in the French version with a glass of mann and Dutch electronics firm However, Catteau said the company isCoca-Cola for the U.S. version, but we try and Philips. The production will also anxious to tap into areas where it is virtuallykeep as close to the original as possible." be available as a three-part impossible to sell dubbed shows, namely the AB Productions is also producing a French - series for television and as a English-speaking countries. language feature film version of Helene et les full -motion video CD -I, for which For this market AB has gone one step fur- Garcons, which should be ready in time for Philips is providing the expertise ther. It is also developing original English -lan- Christ mu guage youth programming ideas that may or- Sarah Walker

Television Business International July/August 1994 44 PROGRAMMING

and some of the budget. Fox Takes Risk In Outer Space According to managing director Chiem Van Houweninge, Blue JULIAN Grant, creator of Scavengers, the 20thCarlton for the ITV network in the UK, Ante- Horse Productions plans to Century Fox -financed show which premieresna 3 in Spain, Telemunchen in Germany for develop more CD -I versions of its in the UK this month, said he wanted to "do RTL2 and Nordisk Film, producing a Scandi- productions despite the increase something very different" from the tried and navian version. in costs. "The work involved in tested format of the gameshow. According to Doug Schwalbe, vice-presi- making the CD -I version of Cross The result is a sci-fi action -adventure show dent of marketing and co -production for 20th My Heart and Hope To Die will set on a space station a couple of milenniaCentury Fox, further sales have been agreed amount to almost three feature into the future which Grant summarizes as "a with Portugal, Australia and Taiwan and talks films," he said. gameshow with elements of drama", filmed are progressing with South Africa and pan - Probably better known as a pro- on a set reminiscent of Aliens and basedAsian station Star TV. Two sponsors have ducer of sitcoms and drama, around frantic activities which echo thebeen brought in to sweeten the package for Blue Horse is also developing a France 2 show Fort Boyard. Rai, which is interested in making an Italian 6x1 hour cop show set in the The set, built at the stage in Pinewood Stu-version. Grant says that over 80 broadcasters Caribbean, titled Davelaer. dios, England, which was used for the James around the world were pitched. UK independent producer Bond film Dr No, accounted for the lion's Despite the back-up of Fox's muscle in Hewland International has tied share of Fox's $3m investment in Scavengers. marketing and distribution and the licensing up format sales of its computer Four broadcasters have already signed up to and merchandising deals thrown in with the game show Games World to produce local -language versions of the show: package, Scwalbe says Scavengers is a "risk", Sat1 in Germany and Kanal 6 in and notes that itis unusual Turkey. The show runs five for an international project to nights a week in the UK on Sky originate outside the U.S. One. Sat1 bought the right to Besides use of the set, broadcasters buying the rights have use of costumes and special effects developed for the show. Each broadcaster makes their own adjustments to the format of the show and although Grant expects each broadcaster to screen the make 26 half-hour shows after show in primetime, its place giving the show an initial 13 - in the schedule will vary. ITV week run in the spring. According has opted for the Saturday to marketing director Craig Gold- evening slot normally occu- man, talks are underway with a pied by Gladiators and soft- major U.S. studio and broadcast- ened some of the darker ele- ers in Europe and Australia over ments of the show to capture further sales. International distri- a broader family audience. bution is being handled by ECM. Antenna 3 is expected to German pubcaster WRD has schedule its version later in completed production on Danger- the evening. Scavengers: Carlton was first up the scramble -net - Tim Westcott

Spanish Channel Tests Series Format

SPANISH regional public broadcaster TV3mixing comedy with an element of drama to ous Games, a drama filmed in Catalunya is attempting to spice up its prime -provide characters and situations an audience English in a variety of European time programming schedule with the develop- can identify with. Unlike a sitcom, each locations. RTPA, which has the ment of a new 45 -minute weekly program-episode will have its own story but there will worldwide rights outside the Ger- ming format that program director Olegueralso be underlying stories running through. man-speaking territories, already Sarsanedas describes as half way between a Using an intensive production schedule has an offer for the UK pay-tv series and a sitcom. currently reserved for the production of rights from Sky TV and interest "A few years ago we thought sitcoms wereTV3's series Proble No, Sarsanedas hopes to from the BBC and ITV, said man- most adapted to our financial capabilites forkeep costs down. Budgets are projected to be aging director Simon Willock. primetime, but increasingly they are being rel-in the region of $65-75,000 an episode. Two Dangerous Games will be avail- egated to access primetime," he said. 26x30 minute series are already in develop- able at Mipcom in four one -hour The idea behind the new format is toment, one for this fall and the other for 1995. episodes or two of 100 minutes. develop programming of -a broader appeal;- Sarah Walker

Television Business International July/August 1994 45 PROGRAMMING

Bob Hoskins and Robin Williams have become the latest Little Extras Make For Brisk Screenings film stars to ignore the old show- biz maxim "never work with chil- FORthe majors, sales of new dren or animals." Both are shows at the May screenings appearing in In The Wild, a in Los Angeles was brisk, but wildlife series made by UK inde- the market isn't as easy as it used to be. "There's more pressure on both sides," said MCA TV international president Colin Davis. International broadcasters are producing more home-grown programming and face more competition, while U.S. distributors are competing against more pendent Tigress in which celebri- available product coming ties are filmed in search of the from cable and first -run syn- animal of their dreams. The dication. There were 22 first - Hoskins (tigers) and Williams run syndication hours pre- (dolphins) films, produced for ITV sented at the screenings this and PBS, will both be unveiled by year. distributor RPTA at Mipcom. Of the new series at the Anthony Hopkins and Timothy screenings, there were some Dalton have already appeared in surefire bets like Spelling the series, which will consist of TV's new series Models Inc six one -hour films. and Madman Of The People, Central Television Enterprises a half-hour comedy. Both (CTE), which handles internation- sold in Europe, Latin Ameri- al sales for British ITV compa- ca,Australiaand New nies Carlton and Central is to Zealand.Rightstothe supply 100 hours of factual pro- Spelling Premiere Network gramming to BBC World Service series' Robin's Hoods and Television's satellite news and Heaven Help Us have already information services. The pack- been picked up in Europe, age of programs includes Carl - but Worldvision were able to ton's Hollywood Women and add sales in Latin America Central's Legacy, Heaven Must and Canada. Wait, Naturewatch and Voyager - Twentieth TV screened the World of National their new series Wild Oats, Touched By An Angel: CBS's fall contender Geographic. Territories covered Chicago Hope and Five Mrs by the deal are Asia, the Middle Buchanans, in addition to theinternational provide more programming for thenetworks East and Africa and the compa- co -production Scavengers, two miniseries Loy- than any other studio this season, screened a nies are discussing their use on alty and Betrayal, and the children's showplethora of programming including four half- other channels including WSTV's Red Planet."People think the Europeanshours: Daddy's Girls, Friends, Young At Heart Arabic and European channels. don't buy at the screenings but they do," saidand On Our Own, three one -hours: Under Atlantis Films and Showtime Marion Edwards, senior vice-president at Suspicion, ER and Pointman, and four mid - Networks have signed an exclu- Twentieth TV International, noting Fox closedseason series: The Office, The Ties That Bind, sive two-year deal with Maintitle deals in Canada, the U.K, Scandinavia, Italy, Medicine Ball and The Great Defender. Pictures, a company formed by Spain, Portugal, Israel and Australia. Like Warner Brothers, Columbia TriStar former Showtime executive Bar- ABC, which has led the networks in the also had its hands full with one -hours such as bara Title, to develop tv projects. growing trend towards in-house production, Fortune Hunter and Party Of Five, The Ricki Under the deal, Showtime will screened an unusually large number of showsLake Show, a syndicated half-hour talk strip have first refusal over projects this year, including three series destined for and The News, a strip comedy series. Title develops for Atlantis. Title, the network Fall schedule: Me And The Boys, Executive vice-president Michael Grindon who will work from the Canadian McKenna and My So-called Life. ABC alsoadmitted that it's hard to present so many company's Los Angeles office, screened The Boys Are Back, a series the net-new shows at once. "Our emphasis is on worked with Atlantis on comedy work is producing for CBS. helping to promote and market our program- movies Heads and Sodbusters. CBS Entertainment presented Touched Byming overseas," he said. "It involves more Her first project will be a film of An Angel, a one -hour drama produced byresearch and information. We're trying to Possessed, the true story which Maysh Ltd and created by John Masius, whose understand the needs of the client and pre- formed the basis of The Exorcist. credits include St Elsewhere. sent programs that fit that need." Warner Brothers, which once again will- Barbara Osborn

Television Business International July/August 1994 46 PROGRAMMING

Grundy Worldwide has All American Dream secured a second daily serial commission from a German ALL American has picked up Fremantle Inter broadcaster and its first Italian national from the Interpublic group for $63 deal. Grundy/Ufa productions million. The deal gives All American a signifi- has landed a first order of 250 cant boost in the international distribution business. As well as adding Fremantle's gameshow catalog (it has 93 game show productions in 27 countries) it adds to its own distribution network with Fremantle's offices in London, Cologne, Istanbul, Madrid, Athens, Lisbon and Sydney. The acquisition of the gameshow company does not include Fremantle Corporation, owned by Paul Talbot, which has international rights to Baywatch, daytime soap Loving and Grace Under Fire. Ironically, Baywatch is Baywatch: International stays with Fremantle Corp episodes of Verbotene Liebe syndicated in the U.S. by All American. ('Forbidden Love') from public Talbot, who founded Fremantle Interna- But for All American the deal is more than broadcaster ARD. The series will tional in the 1950s, sold his remaining 20% just adding new game show product like The be broadcast from the beginning stake to ad agency giant The Interpublic Price Is Right, The Dating Game and Super- of 1995. In Italy, Rai Uno has Group in early July. This left Interpublic posi- market Sweep. The merger of the two compa- ordered 11 episodes of Beato tioned to sell the whole company to All nies, both turning over $60 million -plus a Tra Le Donne (Happy Among American. The two deals were announced on year, establishes All American as a serious Women) - a version of its highly consecutive days. The sale is part -cash and player with the backing of a major media cor- successful entertainment format part -equity and leaves Interpublic holding poration in Interpublic. Previously All Ameri- Man 0 Man - at two hours each. about 20% of All American stock. can had limited success internationally and Reg Grundy Productions in the The acquisition puts All American into a frequently ended up working through local UK has made entertainment different league internationally, with the Fre- agents. The relationship with Interpublic series Small Talk, which started mantle International product leading its cata- (Lamattina is a former chief operating officer on BBC1 in July. log. It is expected that Larry Lamattina, chair- of Lintas USA, an Interpublic company) strate- Pan -Asian satellite broadcast- man of Fremantle International and now pres- gical I \ gives it the weight in the advertising er Star TV has signed a deal with ident of All American Television, will lead the world to open up new broadcast doors. Polygram Film International company internationally. - Paul Nicholson allowing it to screen the studio's 1994/5 output on its pay film service, Star Movies. The deal is non-exclusive and will provide Pilots Aims To Lift European Writing Star with up to 20 films a year including Four Weddings and a Funeral and The Hudsucker THEY are a staple of most schedules, butUK and as little as 1% in continental Europe. Proxy. Star said the deal was the production of long -running tv series in "The biggest problem with Europe is that first in a series of output deals. Europe has remained an alien concept forthere are no experienced tv writers. There is Frontline: Innocence Lost - the many national broadcasters. The cheapertalent but not experience," explained U.S.- Verdict won the Grand Prize at option has been to buy U.S. product, in returnborn producer/director and Pilots tutor Steven the Banff Television Festival, for lower ratings than quality domestic prod-Bawol. "The idea should be to take what's becoming the first all-U.S. pro- uct usually achieves. good about the U.S. and not the mistakes." duction to win the accolade. The Pilots, a Media program initiative con- Ten teams, encompassing a script writer, four-hour documentary was writ- cerned with the development of televisionscript editor and producer from either a Euro- ten and produced by Ofra Bikel series before they go into production, is hop-pean broadcaster or independent production for WGBH, and was also named ing to change this. "The idea behind Pilots is company take part in Pilots. The initiative best social and political docu- to encourage the production of long -runningoperates over five months and includes two mentary. Other awards at the tv series and to encourage the industry -two-week workshops which take place in festival, held on June 6-11, went broadcasters, independent producers, writers Spain during July and October. to NYPD Blue (best continuing and script editors - to understand the value of At the start of the first workshop, the teams series), Frasier (best comedy), the development process," said head of stud- present their projects to experienced industry The Snapper (best made-for-tv- ies Julien Friedman. According to Friedman, a experts who provide critical analysis as to movie) Prime Suspect 3 (best series produced in Europe is developed andhow it can be improved. Scripts are then miniseries) and programs from the first scripts written by just one writer, asrewritten over the summer. By the end of the France, Germany, the Nether- opposed to the U.S. or Australia where thesecond two weeks, each team should have a lands, Finland, the U.S. and process is done in teams. In the U.S. some 7-complete package ready for production to Britain. 10% of the entire audiovisual budget is spent show bmacicaqers. on development, compared with 2% in the- Sarah Walker

Television Business International July/August 1994 47 HARD TECH BARRY FLYNN

Europe Becomes A New TV

European cablers launch interactive tests... Japan Testbed adopts a pragmatic approach to HDTV...

After a number of fits and number of hardware manu- Media Service GmbH, the Now it seems that both starts, northern Europe is facturers for the equipment pay-tv services joint venture stories had an element of finally entering the new age needed for the trial. run by the telco and pub - truth in them. First, it has of tv. At the end of May, Norwegian Telecom said caster ARD alongside Ber- emerged that an in-house France's new pay -per -view that ADSL (Asymmetric Digi- telsmann and Kirch. report prepared by the MPT service, Multivision - which tal Subscriber Loop) tech- The Berlin tests, the first recommends that Japan claims to be the first com- nology would be used ini- in Germany, will be adopt a digital HDTV system mercial European PPV chan- tially, although other tech- launched around the middle within the next two years. nel - was launched on nologies might be used at a of the year. Besides movies - Second, a senior director at French cable. later date in a separate trial. on -demand, home -shopping the R&D labs of public However, Multivision's Apparently, Telecom and pay -per -view program- broadcaster NHK has con- signal was available to only doesn't suffer from the same ming will also be tested. firmed that NHK is working 50,000 Parisian homes to regulatory barriers that other Films are likely to come on a digital HDTV system, begin with, which makes countries' telcos do: it is from Kirch Group's vast based around MPEG-2 stan- the subsequent announce- allowed to provide enter- archive of titles. dards. ment by Swedish cable tainment services over its Until Hollywood block- However, it seems that operator Svenska Kabel TV network. busters feature in the line- the approach to the new that it, too, was now in the Intriguingly, Telecom's up of titles, the buy -rate is standard will be a typically PPV business, rather more initial focus group tests likely to remain pretty tame. pragmatic one. The NHK significant. According to reacted badly to a proposed To date, the Hollywood stu- engineer said that until a Svenska, over half a million menu of films, music videos, dios have still to decide on a digital infrastructure was Swedish households have games and home -shopping, VOD window. Kirch could completely in place, Hi - access to the service, princi- feeling that a VOD service help speed the decision - Vision and the new digital pally in the main population should provide something making process. system would continue in centres of Stockholm and that was "socially redeem- parallel. In fact, NHK even Malmo in the north and east, ing." This puritanical reac- plans to make decoders which means it is a substan- tion resulted in Telecom re- Every (Large) Home which will allow Hi -Vision tially larger venture than the formulating the service to .ets to receive digital HDTV French one. offer a less entertainment - Should Have One signals. The service boasts four led menu, which included Neither NHK nor the first -run Swedish movies, items such as language at the beginning of MPT, however, has which have been purchased lessons, DIY and First Aid. Bkthis year, a statement by a explained how it will deal through a deal with Swedish This elicited a much more Japanese government offi- with the major problem that Film Industries, plus a vari- positive response. (British cial that the country's ana- confronts Japan's struggling ety of other titles - some Telecom's early consumer logue HDTV standard (vari- HDTV set market: the large already released on video research into VOD, inciden- ously known as Muse or Hi - size of the tv receivers and some not. Svenska tally, indicated similar resis- Vision) was to be dropped required. The trouble is that wouldn't say how many tance to an entertainment - in favour of a digital system Japanese homes are small subscribers had so far used only diet.) met with a storm of protest and compact, and HDTV the service, but claimed that Not to be outdone by its from consumer electronics sets are not. Only upwards the response was double Scandinavian neighbours, manufacturers and broad- of 20,000 Japanese homes what had been anticipated. Deutsche Bundespost casters, who are believed to have therefore been pre- Meanwhile, Norway's Telekom, Germany's nation- have invested over $9bn in pared to sacrifice precious state telecommunications al telco, announced at the the system over the last 30 space to purchase an expen- company, Norwegian Tele- end of May that it would be years. The Ministry of Posts sive, bulky (and possibly com, has just announced running a VOD pilot in and Telecommunications already obsolete) technolo- that it plans to trial video - Berlin later this year, con- (MPT) subsequently issued agy. Many observers believe on -demand in or around necting up between 50 and swift denial - declaring that that HDTV will only take off Oslo early next year to "sev- 100 homes.What is signifi- Hi -Vision still had a good when flat -screen technology eral hundred" domestic cus- cant about the trial is that it many years of life left yet, allows large cinema -type tomers. It has already issued represents the first step into and that there was no pro- screens to be hung on the a Request for Proposals to a the interactive tv arena by posal afoot to junk it. wall like a painting. 1111]

Television Business International July/August 1994 48 pay

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