Europe Looks to Latin America for TV Growth
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THE BUSINESS JOURNAL OF FILM, BROADCASTING, BROADBAND, PRODUCTION, DISTRIBUTION JANUARY/FEBRUARY 2013 VOL. 33 NO. 1 $9.75 In This Issue: ATF Review Must See TV Useless Film Fests Sección en Español ® www.videoage.org LATAM’s Content Piracy Biz is Europe Looks to Latin a $3.5-Billion-a-Year Industry America for TV Growth BY DOM SERAFINI BY BOB JENKINS forming SevenOne (now called Red ontent piracy in Latin America is a multi-faceted issue, and even though it istorically, Latin America Arrow International) in 2005,” said Jens affects all concerned, each sector has its own reasons not to eradicate it. has been a difficult region Richter, managing director of Germany’s For example, as was pointed out during IQPC’s “Anti-Piracy & Content for European companies to Red Arrow. “It has always been a good Protection Summit,” held crack. Now, though, the market for us because our portfolio has territory is taking on growing in New York City last (Continued on Page 22) November, the business importance, model of content owners as regional Cencourages piracy because it goes Heconomies flourish and new Where Sellers Go against normal consumer behavior. players — especially those in the digital arena — offer Wrong with Buyers Nowadays, many consumers opportunities for a wider BY ISME BENNIE don’t want to wait for the industry’s range of content. But to crack imposed windows (which are necessary this market, executives have to maximize profits in order to sustain good distributor is someone who found that an on-ground understands the local market and is willing high production costs). Therefore, presence is necessary. they resort to illegal ways of obtaining to work with programmers to help solve content for immediate gratification –– “Latin America is an “Atheir scheduling needs,” said Doug Smith, without considering it a crime. important market, and VP and general sales manager for Canada at CBS it is one to which we Studios International (CBSSI). The high costs of DVDs and have paid attention since (Continued on Page 20) (Continued on Page 18) History Repeats Itself: NATPE at 50 BY SARA ALESSI t seems the age-old adage is true — history really does repeat itself. Many of the issues that made headlines at NATPE in years past are still making news today. At the advent of NATPE’s 50th birthday (though NATPE was established in I1963, its first trade show wasn’t held until 1979) VideoAge decided to take a look back at our coverage of the event over the past 32 years (since VideoAge was founded in 1981). What we discovered might give those who have attended NATPE over the years a sense of déjà vu. The floor versus suites conundrum was as much an issue in the past as it is now. The same is true for the question of whether enough attention is paid to the international contingent, and then there’s the ongoing debate regarding the number of seminars/conferences at NATPE, which VideoAge has for years maintained is detrimental to the business of buying and selling content since it reduces the amount of floor traffic. Let’s take a look back at some of the highlights (and lowlights) of NATPE through the years. (Continued on Page 24) C ONTENTSVIDEO AGE No.1 January 2013 a a Cover stories: 13. Sección en Español LATAM’s content piracy business is a $3.5-billion-a-year industry El mercado NATPE gana fuerza Europe looks to Latin America s en vísperas del festejo de sus for TV business growth margins C “Grandes Cinco” Mistakes content sellers make that Piratería de contenidos en don’t make international program s América Latina: Un tema buyers content. In other words where costoso por todos lados sellers go wrong with buyers La vida del comprador de History repeats itself: NATPE s programas ha cambiado, at 50 is like NATPE at 35 pero no la atención hacia él 4. World: The U.S. in ads, VoD dollars; Brazil in football reais 6. Book Review. Don’t 32. Travel news, trade show calendar touch that dial: Inside the rise and fall of “Must See TV” is top of the rock 34. My 2¢: Film festivals are useless to the industry 8. ATF Review. Asia: A tough TV territory facing a difficult market It’s likely that Hurricane Sandy, VoD $ Signs which ravaged the northeast at the end of October, impacted ad spending as Getting Clearer well, since some stations opted to limit ndustry experts are predicting that or forego advertising altogether for a few U.S. Video-on-Demand /Pay-Per- days in order to provide uninterrupted View revenue data is about to become a lot more transparent. coverage of the storm. Pivotal Research As the Los Angeles Times recently Group analyst Brian Wieser estimated the noted, studio accountants have Weak Ad Signals Warner Inc., Discovery Communications storm’s impact on the U.S. advertising traditionally been criticized for not Inc. and News Corp. market could manifest as a revenue loss Ibeing entirely forthcoming about VoD revenue numbers, leading filmmakers Plague the U.S. As reported in The Wall Street of around $500 million, or one percent to wonder whether they’re getting a fair Journal, advertising holding companies of the volume for the fourth quarter. share of the pie. arning signs from several Interpublic Group of Cos., WPP and In October, Comcast Corp., which Arbitrage, a Roadside Attractions/ advertising companies Publicis Groupe all stated that marketers owns NBCUniversal, stated that its Lionsgate Entertainment feature film in the fall indicated a slashed their spending in September as a cable networks division recorded flat ad that was released concurrently in theaters decline in ad spending result of political uncertainty in the U.S. sales for the quarter, and News Corp. — and on VoD, is being seen as a sign of in the U.S. ahead of and the economic crisis in Europe. They the sea change, the Times reported. pending reports for the which owns Fox News, Fox and FX, as saw a decline in a number of industries, According to the two companies, VoD well as The Wall Street Journal — was September quarter from including retail, pharmaceutical and sales for Arbitrage (which include Internet, Wcompanies such as CBS Corp., Time consumer packaged goods. projected to report flat ad revenues. cable and satellite television), have reached about $11 million, and are expected to reach $12 million. Combined with expected box-office gross of around $7.5 million, the film will break the combined sales record for a day-and-date release. Companies like Lionsgate seek to benefit from an increase in revenue transparency, the Times explained, since they can now show off those profits when they go to buy films at festivals and markets. Usually, 70 percent of VoD revenues are allocated to the distributors, as opposed to the 50-50 theater owner/distributor split often used for box-office sales. TV Rights Boost Brazil’s Football omestic TV rights to sports games are helping Brazilian football (soccer) clubs earn more money and hold onto talented players. The top clubs earned total revenues of R$1.93 billion (U.S.$927 Dmillion) in the 2011 season, an increase of 29.7 percent from the year before, as reported in the Financial Times. With the rise of pay-TV in the country, 36 percent of clubs’ income stemmed from TV rights. In 2011, the top-earning club was the São Paulo-based Corinthians, which generated total revenues of R$281 million. This marked a 36 percent rise compared to the year before, according to investment bank Itaù BBA. Coming in second was São Paulo, up 15 percent with R$225m. Santos came in third, pulling in R$189m, an increase of 62 percent. Although consulting and financial advisory firm Deloitte reported that Brazilian clubs were still earning below the level of those in Europe and the U.K., Brazil’s domestic growth and plans to host the 2014 World Cup could bolster earnings. Another factor contributing to the rise in revenues were sponsorships, with state bank Caixa Econônmica Federal paying a record R$30m to put its brand on the Corinthians’ jerseys. J ANUARY 2013 tempered with an awful lot of hard work.” When he first took on the job in the early ’90s, Cheers was the network’s top-rated comedy, but a call from the lead, Ted Book Review Danson, saying he wasn’t returning to the show sent Littlefield into a panic. Eventually, though, Littlefield bet on Seinfeld to replace the ever-popular Cheers, and that bet paid off in full. By the time the Cheers finale aired in May 1993, Seinfeld had surpassed the show in Don’t Touch That Dial: Inside ratings. Plus, at the height of Must See TV’s popularity, a 30-second advertising spot on Seinfeld garnered $800,000 (about NBC’s “Must See TV” Hits $1.28m today). Guarding every penny, the network gradually shaved 30 seconds off each episode until they ran at least a minute ctor John Lithgow, who shorter in the last few years, leading Seinfeld starred in NBC’s 3rd Rock and David to exclaim, “Stop making the from the Sun, once said, show shorter!” Ad spots for the final episode “When it’s right, there’s brought in $1.8 million (about $2.554m). nothing like a sitcom.” Well, Just as he and his team took risks with during the 1980s-1990s, Seinfeld (developing it out of the Variety NBC had it right. and Specials department because the AIt all started with NBC’s “Night of Comedy department lacked the funds), Bests,” the name the network gave its Littlefield also took risks with the other Thursday night lineup consisting of classic shows that became Must See TV.