TV Europe MIPTV 2011

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DTT Platforms German Shakeup Focus on Spain RTL Group’s Gerhard Zeiler Zodiak’s David Frank

MIPTV EDITION

Sky Deutschland’s Brian Sullivan ITV Studios’ Maria Kyriacou www.tveurope.ws

THE MAGAZINE OF EUROPEAN TELEVISION

APRIL 2011

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Antena 3 www.antena3.com • Hispania • A Normal Family • Physics or Chemistry • The Princess of Eboli • Bandolera

The Spanish terrestrial Antena 3 has established a strong presence for its programs in Latin America. For MIPTV, however, the focus is on Europe, says José Antonio Salso, the head of sales and acquisitions. Antena 3 will have a slate of scripted dramas, with high production quality and proven success in prime time in Spain. “Our series offer a mix of content for all kinds of targets,” Salso says. He notes the strength of the historical point of view in Hispania, a classic adventure series following a group of residents fighting against the Roman army to defend their territory.

Other period dramas include The Princess of Eboli, a story of love, vengeance and betrayal, set in the 15th century; and Bandolera, about a 19th-century woman who breaks the law to defend justice. Further titles include A Normal Family, which features superpowers, mystery and magic, and Physics or Chemistry, a top-rated teen series in Spain, with seven seasons and a strong fan following.

“ Antena 3 is making a huge bet on scripted

drama series, as they are the key programs in our schedule.

”

—José Antonio Salso

Physics or Chemistry

Bavaria Media Television www.bavaria-media.tv Life, Uncorked

• Life, Uncorked • Alpha 0.7: The Enemy Within • Carl and Bertha Benz • Men Gone Wild • Storm of Love

With its focus on international co-productions and the global distribution of TV content, Bavaria Media Television outputs roughly 30,000 minutes of TV programming annually. Bavaria is bringing to MIPTV a slate of series, TV movies and telenovelas from Germany and other European countries, including Life, Uncorked from Switzerland, and the German sci-fi mini-series Alpha 0.7: The Enemy Within, which centers around a neurological experiment involving thought control.

“We are happy to add another high-quality TV series for the broad family audience to our catalogue as well as an exciting science-fiction-thriller series with cross-media potential,” says Philipp Kreuzer,VP of international and coproduction, of the two series. Bavaria will also offer the TV movies Carl and Bertha Benz and Men Gone Wild, and the telenovela Storm of Love.

IN THIS ISSUE

“We are certain that with

our new catalogue titles, we continue to be a reliable partner to our buyers for quality fiction programming.

”

—Philipp Kreuzer

Switching On DTT is changing the TV landscape

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Germany Tunes In Looking at the German market

26

Jumpstarting Spain A profile of Spain’s broadcasting industry

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Interviews RTL’s Gerhard Zeiler Zodiak Media’s David Frank Sky Deutschland’s Brian Sullivan ITV Studios’ Maria Kyriacou

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Deutsche Welle/ DW-Transtel www.dw-world.de/www.dw-transtel.de • • • • •

Ricardo Seguin Guise

Publisher Anna Carugati

Editor Mansha Daswani

Executive Editor Kristin Brzoznowski

Managing Editor Morgan Grice

Editorial Assistant Matthew Rippetoe Lauren Uda

Production and Design Directors Simon Weaver

Online Director Phyllis Q. Busell

Art Director Cesar Suero

Sales and Marketing Manager Terry Acunzo

Business Affairs Manager Alyssa Menard

Sales and Marketing Coordinator

Ricardo Seguin Guise

President Anna Carugati

Executive VP and Group Editorial Director Mansha Daswani

VP of Strategic Development TV Europe © 2011 WSN INC. 1123 Broadway, #1207 New York, NY 10010 Phone: (212) 924-7620 Fax: (212) 924-6940 Website:

www.tveurope.ws

Once Upon a Time: Fairytales of the World

SOS: Earth Calling!

Nuclear Power: A Controllable Risk?

Global Energy Faster, Higher, Stronger: Tomorrow’s Technology Once Upon a Time: Fairytales of the World

The titles SOS: Earth Calling!, Nuclear Power: A Controllable Risk?, Global Energy and Faster, Higher, Stronger: Tomorrow’s Technology all touch on relevant social issues. These types of docs have become a hallmark for Deutsche Welle/DWTranstel, which is also presenting Once Upon a Time: Fairytales of the World. “These properties show a lot of interesting issues, and we have packaged them in the typical Deutsche Welle fashion: well made, visually appealing and with a multifaceted view of different cultures and perspectives,” says Petra Schneider, the company’s director of distribution.

Schneider also highlights the company’s nonlinear activities. “Our range of mobile content continues to expand,” she notes, “with video segments designed specifically for iPhones, Android devices and other handsets.”

“Once Upon a Time: Fairy-

tales of the World sheds light on the past by sharing fairytales from different countries and cultures.

”

—Petra Schneider

Europe Images International www.europeimages.com • The Destiny of Rome • The Last Chance Tiger • Deepsea Under the Pole • Continents: A Perilous Odyssey • Sled Dog Soldiers

The current crop of programs from Europe Images International spotlights various aspects of the past, present and future. “These programs are beautifully shot, they tell amazing and unique stories with a moving impact,” says Catherine Alvaresse, the executive VP of sales and acquisitions. “Each of them, with different angles, proposes a deep view of the world.”

The Destiny of Rome and Sled Dog Soldiers provide an understanding of history and better knowledge of our past, Alvaresse explains. She says one of her goals for MIPTV is to “continue the growth of export of our unique mini-series The Destiny of Rome, with its coming sequel, The Ascension of Athens.”

The planet, both its past and future, comes into view in Continents: A Perilous Odyssey and Deepsea Under the Pole.

Nature is the focus in The Last Chance Tiger.

“[At] MIPTV, we hope

to quickly see how our programs are welcomed by our partners and what [the trends are] for 2011.

”

—Catherine Alvaresse

Get daily news on European television

by visiting www.tveurope.ws

The Destiny of Rome

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FremantleMedia Enterprises www.fidtv.com • Laconia • Winners & Losers • The Crimson Petal and the White • Work of Art: The Next Great Artist • Anthony Bourdain: No Reservations

“Anthony Bourdain has got a growing

legion of fans around the world already, and his latest series won’t disappoint.

”

—Mel Alcock

Drama continues to play an increasingly large role in FremantleMedia Enterprises’ sales slate, and it has a trio of new offerings in this genre for MIPTV. “Laconia, The Crimson Petal and the White and Winners & Losers are three incredibly compelling dramas that will appeal to audiences anywhere,” says Mel Alcock, the CEO for EMEA. Laconia is set against the backdrop of World War II, while The Crimson Petal and the White reveals the true sexual politics of Victorian life. Winners & Losers follows as four “losers” win the lottery on the night of their high school reunion. In the entertainment arena, Work of Art:The Next Great Artist is back for a second season. Anthony Bourdain: No Reservations continues with new installments as well.

“We’ll do a lot of business at MIPTV, both in terms of signing deals and introducing clients to our new titles,” Alcock says. “We think it’s going to be a great week for us.”

Anthony Bourdain: No Reservations

Marc Dorcel www.dorcel.com

“For the last couple of years,

• Adult Only • Pornstar • Making Of...

• Jet Sex Confidential

Marc Dorcel has focused on the new technologies and the best way to bring adult content to the largest audience.

”

Marc Dorcel, the Paris-based leader in international adult content, has always been focused on new technologies and enhancing the ways it can bring its programming to the largest audiences. Recently, the company has been focusing on the 3D trend that has hit mainstream filmmaking, investing in the development of an extensive 3D catalogue. As Marc Dorcel heads to MIPTV, the company will have a slate of 75 3D programs, each of which falls into one of the company’s four categories of focus: Adult Only, Pornstar, Making Of… and Jet Sex Confidential.

According to CEO Grégory Dorcel, “Experience in production, close collaboration with the main technical and audiovisual actors of the market, and, obviously, the strategy based on the most innovative media, led Marc Dorcel to be the first adult international company developing 3D platforms for IPTV and cable operators and proposing its full catalogue to the main European broadcasters.”

—Grégory Dorcel

Marc Dorcel 3D

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Mediaset Distribution www.mediasetdistribution.com • Solving Lorenzo • Follow Your Dreams • Like a Dolphin • Antimafia Squad • Living

“ In these past years, Mediaset

produced programs that could appeal to an international audience more than ever before.

”

It’s a mix of ready-mades and scripted formats that Mediaset believes will be a winning combination for MIPTV. Leading off the slate is Solving Lorenzo, an Italian adaptation of a Telefe format.The series FollowYour Dreams features performance artists who are competing in a talent showcase in the hopes of getting discovered. Like a Dolphin is a mini-series inspired by a true story.

Meanwhile, there are scripted formats like Antimafia Squad, which scored an option in the U.S. with ABC Studios, and Living, Italy’s most successful soap opera.

“We’re offering this year a rich, ready-made catalogue and will be emphasizing our scripted formats business that has been until now quite a success, having closed options and adaptations in many different countries,” says Patricio Teubal, the head of sales. “Mediaset expects to be recognized as a provider of successful stories and not only a supplier of ready-made programs.”

—Patricio Teubal

Antimafia Squad

Novavision Promotion Internationale www.novavision.fr • • • •

Pop Corn TV Crazy Hidden Camera Hilarious Home Video Show The QuizZz

“With MEG’s assets on board…

we are very confident that it will rapidly further boost our business.

”

Novavision recently finalized the acquisition of MEG (Media Entertainment Group), taking on its catalogue and business assets. “With this move, Novavision confirms its leadership in the funny-clips market for the entertainment industry,” says Nadège Boinnard, the executive VP. “The acquisition of the company’s assets will enable Novavision to grow its business even faster, asserting itself as the world’s largest provider of short, funny, nonverbal clips for family audiences throughout the world.”

The deal boosts the catalogue by five times in terms of hours available and by 12 in terms of library, with some 47,000 comedic clips. MEG’s catalogue joins the existing Novavision slate, which already includes the flagship Pop Corn TV as well as Crazy Hidden Camera and Hilarious Home Video Show. This is in addition to the short-format The QuizZz. “This game format will keep your audience watching during commercial breaks!” says Boinnard.

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—Nadège Boinnard

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ORF-Enterprise contentsales.orf.at

“ [White Beauty], the new family-drama

• White Beauty • Sky Hunters: The World of the Dragonfly • First on Everest • Secrets of the Flooded Forest • The Lynx Liaison

series [from] ORF/ARD, is the ideal primetime or afternoon show for the female 29-to-59 audience.

”

ORF-Enterprise has high expectations for the family drama White Beauty, about a woman who becomes the new stud manager at Piber, the mistress of hundreds of Lipizzaner horses.“It has the potential to follow the success of The Wine Tycoon, Four Women and a Funeral or the longrunning series Orth Castle Hotel,” says Beatrice Riesenfelder, the CFO and head of content sales. ORF also has a strong factual slate from its natural-history and science department, UNIVERSUM. Titles include Sky Hunters: The World of the Dragonfly, First on Everest, Secrets of the Flooded Forest and The Lynx Liaison.

ORF recently installed a new head for UNIVERSUM, Andrew Solomon, in time for MIPTV. “He will present new projects and ideas for the strand, including extending the topics from wildlife, nature and science to archeology and technology as well a new 3D project, Little Monsters, by Kurt Mündl,” notes Riesenfelder.

—Beatrice Riesenfelder

White Beauty

The Licensing Machine www.thelicensingmachine.com

• Kokomom • Pikaboo • Tic Tac Tales • Ranetki • Metal Hurlant Chronicles

Celebrating its 50th birthday this year, the Panini Group is a global leader in the collectibles and trading-cards sectors.

The Licensing Machine (TLM), the media division of Panini, has taken this legacy into the TV-distribution arena.

“We have been very selective with our programming,” says Bruno Zarka, the TV, home-video and digital-salesand-services manager at TLM. For the youngest set comes Kokomom, based on a well-known book collection of the same name from Asia. Pikaboo, an RTP2 commission from BIGMOON Studios, skews to the slightly older preschool demo. Another RTP2-commissioned series produced by BIGMOON, Tic Tac Tales, combines live action and animation, aging up to the 6-to-10 set. Geared toward tweens and teens, Ranetki is a sitcom starring the eponymous real-life all-girl Russian pop-rock band. Suited for audiences of all ages, Metal Hurlant Chronicles is the first TV adaptation of the French comics-anthology magazine.

Kokomom

“ The licensing and media division of the

Panini Group is aiming to become a real global family-entertainment company.

”

—Bruno Zarka

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TM International

I NT E R N AT I O N A L

www.tmg.de • Moby Dick • Haven • Shades of Love • Flashpoint • Thorne

“ If there is one common denominator in our catalogue it is quality.”

—Carlos Hertel

The epic TV event Moby Dick, starring William Hurt and Ethan Hawke, is finally complete, and is topping the list of MIPTV highlights for TM International.Also from the slate comes Flashpoint, which has been a hit for CBS in the U.S., and Haven, a Syfy original series. The catalogue features crime movies from the Thorne franchise, including Thorne: Scaredy Cat and Thorne: Sleepyhead, as well as mini-series based on Rosamunde Pilcher’s Shades of Love.

Carlos Hertel, the head of international sales, says all these titles have “excellent production value, top casts, and globally appealing and marketable stories.” Hertel is upbeat about the sales prospects at MIPTV, stating that “the worst is over” in terms of the recession.Yet, he does say that there are new challenges facing the industry. “Gaining a greater understanding of the new dynamics of digitization and embracing its possibilities will become key, alongside consolidating the traditional business.”

Moby Dick

TV5MONDE www.tv5.org Quoi de neuf doc? on TV5MONDE

• TV5MONDE France Belgique Suisse (FBS) • TV5MONDE Europe

Europe is TV5MONDE’s oldest and most well-established region. “We have a very strong penetration in these countries, where there is a demand for French-speaking programs and Francophile culture,” says Marie-Christine Saragosse, the director-general of TV5MONDE. The channel has an active subtitling policy, providing more than 1,000 hours per year of subtitling in Russian, German, Dutch, Romanian, and most recently, Polish.

Saragosse is particularly excited about the launch of the Polish subtitling, and she is also keen to highlight the channel’s activities on nonlinear platforms.

“We offer our channel for 24-hour streaming over mobile, and we have apps for the iPhone that offer exclusive programs with educational content,” Saragosse says. She acknowledges that the European market has become increasing cluttered, with new services popping up or expanding to other territories.

She says, however, that TV5MONDE’s advantage is that its programming is “unique and universal at the same time.”

“Europe is a diverse zone

with different market realities; it’s a very dynamic market.

”

—Marie-Christine Saragosse

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By Jay Stuart

Terminology sometimes gets in the way of clarity in the television business and this is probably the case with digital terrestrial television (DTT), a fancy name for a familiar concept. With the switch-off of analogue transmission in progress across Europe, traditional broadcast television automatically becomes digital terrestrial, so in a way DTT is simply broadcast television by another means. Nowadays we’re getting to the point where television sets for sale in the shops are ready to receive digital signals without any extra equipment. Getting DTT, on a free basis at least, thus becomes just like tuning in the old analogue—only there’s more of it to see.

“The main selling point of DTT is that it’s an incredibly simple way to get more free TV,” says Richard Lindsay-

Davies, the director general of the Digital TV Group, the industry association for digital television in the U.K. “It can be basically self-installing.”

Much of the expanded choice comes from the traditional broadcast networks as they push to diversify in the new environment, adding new channels to the old analogue offer.

In Spain, where analogue has been switched off, the national DTT lineup was completed in 2010, and it highlights the degree to which DTT is an extension of analogue broadcasters onto a new platform. Of the 33 DTT channels (30 free and three pay TV), no fewer than 25 are operated by the dominant terrestrial networks: RTVE has six DTT channels, Antena 3,Telecinco and laSexta have five channels each, and Cuatro has four. But the

Switching

On Digital terrestrial television, whether free or pay, is offering audiences across Europe a better viewing experience.

Robert, the mascot of Boxer in Sweden.

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long-term aim is to accommodate over 1,000 local/regional channels (the rollout of these has been sporadic to date).

The importance of DTT as a platform naturally depends on the distribution landscape in the individual markets. In Germany or Holland, for example, where there is plenty of cable, it is not really significant, but in France or Italy it has a major impact.

The M6 Group’s W9 in France is the most successful free DTT channel in Europe. In 2010 it registered an overall viewing share of 3 percent and a 3.9-percent share in its target demo.The channel pulled 45 of the top 100 audiences for DTT during the year.

Since carrying the local version of The X Factor in 2009, it has moved into talent shows of its own with the likes of Talent tout neuf: le live (All New Talent: Live) and scored with the format-based Taxi Cash. W9 also showed the extreme athlete Taïg Khris breaking the world record for the highest roller-skate jump—he leapt off the Eiffel Tower.

The M6 flock of DTT channels outpaced the main M6 network in revenue growth in 2010, generating €168.9 million, up 14.8 percent (M6 grew 10.7 percent to €677.9 million).

LIMITED CAPACITY

Perhaps the most important distinguishing characteristic of DTT as a technology for delivering television is that it has less capacity than cable or satellite. Even in the digital age, terrestrial TV capacity is still limited by being confined to the UHF spectrum, as is analogue.That can put the platform operator in a relatively strong Making the switch: Digital TV Group was set up by British broadcasters to assist consumers in the conversion to digital TV.

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position in negotiations with channels. Such is the case for Freeview in the U.K. “Freeview is the promised land for us as an operator of free channels,” says Remy Minute, the managing director of CSC Media, which operates four children’s channels, seven music channels,True Movies 1 and 2 and True Entertainment—more basic channels than anybody else in the U.K. market.“The problem is the cost.”

Freeview keeps working to squeeze more and more channels onto the platform and new slots come up now and again, but the price has escalated from the early days when DTT was a novelty. In 2001, when analogue switch-off was on the far horizon, Freeview was asking an estimated £1 million per slot and there was not exactly a rush of buyers. Now the same slots go for £8 million to £10 million per year. It’s very much a seller’s market.

The U.K. currently has five DTT multiplexes in standard definition, one owned by the BBC, one shared by ITV, Channel 4 and Channel 5, one owned by ITV alone and two belonging to transmission company Arqiva. In addition, the BBC owns the HD multiplex and leases capacity to other channels.There is talk of adding two more multiplexes.

Like Spain, Germany has completed the switch off of analogue transmission (in December 2008). But only about 10 percent of households depend on DTT as their only means of reception. The end is nigh in the other major markets. France plans to complete switch-off by November of this year, and Italy and the U.K. have set a target of late 2012.

The analogue terrestrial switch-off has now taken place in 17 European countries.The total number of channels on DTT networks in 27 E.U. markets plus Turkey and Croatia is now almost 1,500, according to research conducted for the European Commission.That total includes a very large number of local channels, which are available on the DTT platforms in 13 countries and are especially plentiful in Italy, Spain and Denmark.

The number of national and international channels available to DTT households has grown to 760, up from 500 in the spring of 2009.This includes almost 40 multi-country brands, such as the Discovery channels, Eurosport, CNN and BBC World.

Because delivering free TV is DTT’s driving force now and it has become the default platform for delivering the main national networks that were on analogue, it’s easy to overlook that it is also an addressable platform akin to cable or satellite, which can deliver subscription services, too. In fact, DTT really began as a pay platform, a short-lived incarnation that effectively ended when Quiero TV in Spain and ITV Digital in the U.K. both crashed in 2002.

The pay potential is very much alive and the question remains as to what extent operators and content providers will try to adopt a subscription business model. Of the 760 channels across Europe, 345 are on free platforms and 415 are on subscription platforms. Pay DTT services are available in 14 countries, including the biggest markets.

Public channels continue to play an important role on the free platforms. About 25 percent of total channels on DTT come from public broadcasters.The proportion tops 33 percent on freeDTT platforms but is less than 10 percent on the pay platforms.

On the free platforms, generalist channels account for 36 percent, entertainment and fiction 15 percent and sport channels and movie channels only 2 percent each. On pay networks, channels based on entertainment and fiction account for 19 percent of the total, sport channels 18 percent and movie channels 4/11

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10 percent, while generalist channels make up 8 percent. Live football, of course, figures prominently in the marketing of pay DTT in markets such as the U.K., Spain and France.

PLATFORM COMPETITION

Driving DTT: W9 has emerged as a leading channel in French DTT with viewers under 50, featuring a lineup that includes Taxi Cash.

The British market, where about 92 percent of the digital switchover is complete, has evolved as a test lab for the way the free-TV future is going to pan out.The DTT platform, Freeview, has been going for eight years.The partners are the main broadcasters BBC, ITV and Channel 4, plus the pay-TV company BSkyB and the broadcast transmission company Arqiva.

Freeview is unencrypted. Anybody can make a box. If you want the Freeview badge of approval on it, you need a license.

Freeview does not control its technology. That falls under a company called DMOL, owned by the BBC, ITV, Channel 4 and Arqiva.

Freeview has a pay bouquet called Top Up TV, launched in 2006, whose main selling point is Premier League football available via ESPN for only £9.99 per month. Sky Sports channels have also been available since mid-2010, at over £30 per month.

“Top Up TV has been reasonably successful with pay on Freeview,” says Digital TV Group’s Lindsay-Davies,“and there is quite likely to be some increase in the pay-TV offer as the regulatory regime eases. But terrestrial is not able to compete with satellite and cable in what it can offer because of the relatively higher transmission costs and the scarcity of spectrum. It does not lend itself as well to pay.”

There is another competitive wrinkle in the U.K.—a freeTV offer on satellite. Called Freesat, the platform is owned by the BBC and ITV. Their channels perform better on their own satellite platform than on Sky. “Freeview is very much the new analogue,” says Emma Scott, Freesat’s managing director, who was the launch director of Freeview. “It’s terrestrial entry-level television.That’s fine. Not everybody wants lots of channels. But we are moving to a world where BBC will be all high-def. HD will be the norm, as in Japan. And there is no scope for that at present with DTT.” Basically, Freeview wants to upgrade terrestrial customers to more choice, while Freesat wants pay-TV customers to down-

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grade to free.There are 14 million homes in the U.K. with satellite dishes. The Freesat box is different from Sky’s, but the dish points the same way as the Sky dish. Consumers can opt out of Sky and switch to free satellite after investing in the Freesat box, priced at only £30 for the standard definition version; HD, the more attractive option, is priced at £65 and also offers an ethernet port which makes it possible to access IPTV and use timeshift options such as BBC iPlayer (ITV’s version is launching soon).

ITALIAN HITS

Italy is the only major market where DTT has emerged as a viable alternative pay-TV platform, challenging satellite head-on.

Italy is far and away the most successful in pay DTT.The subscription count of 3.6 million active smart cards for Mediaset’s DTT platform is probably bigger than all the rest of DTT pay subs in Europe put together.

The Italian DTT network is made up of 15 multiplexes offering over 40 free channels and 50 pay channels nationally, with about 200 local channels available free of charge—a picture that looks remarkably similar to the old analogue market with its hundreds of channels.

The Mediaset Premium platform has about 30 channels offering league football, film channels and children’s channels. In 2011, Mediaset reached deals with BBC Worldwide Channels and Discovery Networks Europe to create new documentary pay-TV channels exclusively for Mediaset Premium starting in March. The platform will add BBC Knowledge and Discovery World.

Another platform in Italy is operated by Centro Europa 7, offering a dozen channels under the Fly Channel brand, including the only DTT adult channels.

The Italian market may be entering a new phase of DTT competition. Authorities decided in early March that satellite pay TV Sky Italia would be permitted to take part in the contest for the assignment of DTT frequencies. Last year the European Commission accepted plans for Sky Italia to bid for DTT on the condition that it stuck to offering free TV until 2015. The Italian government, led by Mediaset founder Silvio Berlusconi, was opposed to the approval.

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Italy is again ahead of the curve. In late 2010, Mediaset, which launched HD early, tested the first 3D service on DTT. Arqiva has discussed options for delivering 3D broadcast services over the U.K.’s DTT networks. But HD already gives DTT platforms plenty to swallow without adding another dimension.

UPGRADED DEMAND

Featured as a family: laSexta, home to series such as Imagina’s Buen agente, has a number of channels on Spain’s DTT platform.

In the Nordic markets, DTT has also emerged as a big player in pay TV. Boxer TV Access, owned by Swedish state-owned broadcast infrastructure group Teracom, operates DTT in Sweden and Denmark and its PlusTV subsidiary is the leading payTV operator in Finland.

HD CHALLENGE

The arrival of high definition as a mainstream product is pushing consumer demand up the scale, increasingly becoming the norm and no doubt an expectation of the future. But delivering HD requires more capacity. This was not part of the original DTT picture.

While having limited capacity can help platform operators in price negotiations, DTT struggles to accommodate highdefinition. In the U.K., a DTT multiplex is limited to four channels in HD instead of up to 10 in SD (standard definition).

Digital has helped, but terrestrial is still considered the poor relation in comparison to satellite or cable. Being fibre-based, cable has the most potential of the three technologies to add channels.

HD launched in Spain last year and there are three national channels and ten regional channels offering high-definition programming free of charge. Other markets with HD offers are France (four free channels nationally and one pay), Italy (Mediaset offers HD movies and sport), Estonia, Finland, France, Hungary, Lithuania, Norway, Sweden and the U.K., where Freeview launched HD in the spring of 2010.

To date Freeview has sold about 1.2 million HD boxes. Freeview HD offers access to BBC One HD, the BBC HD channel, ITV1 HD and C4 HD in addition to a more limited range of channels in standard definition than the usual package.

“We know from talking to Freeview viewers that having high definition is becoming the standard when considering what type of equipment to buy,” says Ilse Howling, the managing director of Freeview. “As Freeview HD continues to roll out to new areas of the U.K. this year, it’s exciting that Freeview can meet this need by offering quality HD channels without a subscription.”

In Sweden, Boxer launched HD in late 2010 with five channels, both free TV and pay TV. The group has stressed that it’s a big step. Coverage for HDTV is about 70 percent with the goal of covering the whole country.

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The mere fact of being digital does not make DTT cutting edge.The advent of broadband has made TV through the PC not only a reality, but increasingly the mode of choice for young people.

In Spain, Antena 3’s DTT channels Neox and Nitro have been big successes, with about 4 percent of the viewing market. But even so, the group is looking beyond DTT to what it calls “Antena 3.0.” Referring to the emergence of mobile telephony, Internet TV and other platforms, group CEO Silvio González says, “We have strategically decided to be exactly where the viewer is, independently from when, how or where he decides to see our product.”

That is the same refrain one hears from the big broadcasters elsewhere. ITV’s chief executive, Adam Crozier, has said his goal is to see that the company has a revenue base that balances “free and pay TV as well as linear and non-linear viewing.”

But all of this is not really bad news for DTT. It’s not an either-or scenario. “Broadband is actually positive for DTT in that it will play a supporting role for a proposition that would not be competitive without it,” says Digital TV Group’s Lindsay-Davies. “Broadband will probably help sustain homes in Freeview by making more ondemand and à la carte programming available. We already require an ethernet connection in the Freeview box, which enables catch-up TV. Our newest specs will prescribe more connectivity. I see broadband as a complement to DTT, not a challenge.”

In the U.K. ,YouView will be the next IPTV entrant in the market. The partners are again BBC, ITV, Channel 4 with Arqiva, just like in Freeview, plus Channel 5. And this time there are telcos on board, BT Vision and TalkTalk.YouView requires customers to buy a box, which would be supplied by the telcos for the bundled customers. BT Vision and TalkTalk want to do a bundled version of YouView. In February the YouView partners delayed the launch until 2012, blaming the “scale and complexity” of the project. The initial target for YouView is about 3 million subs. There will be a Freesat version of YouView as well.

While YouView remains under wraps, the broadcasters remain without their own Internet-enabled pay platform, while Sky and Virgin Media are already marketing set-top boxes with greater connectivity.

In Italy, Mediaset is doing better in extending its offer to broadband by introducing Premium Net TV, a brand new “over-thetop” TV system offering catch-up TV of all of Mediaset’s channels during the past week plus access to a library of over 1,000 programs, including 200 movies available 24/7.

When DTT providers offer that sort of seamless connectivity, capacity suddenly looks like less of an issue.

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Galileo on ProSieben.

Germany

Tunes In

Great changes are taking place in the German market, as a recovering economy is spurring digital growth and an influx of foreign cash into the pay-TV space.

By Dieter Brockmeyer Europe’s largest economy has bounced back from the global economic downturn faster than the pundits could have predicted.

With that recovery has come a return to form for the television business, with ad revenues well on the mend. However, the market has shifted dramatically since the prerecession days.

For instance, in 2010, the commercial broadcaster RTL Tele vision, which for many years has led the rankings among younger viewers, also bested its public-broadcasting competitor ARD among all adult demographics. It was a small shift, but a significant one, particularly given that 2010 was a World Cup year, with ARD and ZDF holding the free-TV rights to broadcast the tournament from South Africa.

RATINGS GAME

Last year, RTL scored an overall viewing share across all demographics of 13.6 percent, 0.4 points ahead of ARD. And its ratings highs have continued; the local version of I’m a Celebrity, Get Me Out of Here! garnered a record prime-time audience, with shares peaking at more than 50 percent, boosting the overall daily share up to almost 27 percent during peak-viewing hours.

RTL has also fared well with other format-based productions, notably Deutschland sucht den Superstar (Idols) and Das Supertalent (Got Talent).

RTL’s ratings ascent hasn’t been the only surprise in Germany’s TV industry. ProSiebenSat.1 Media’s new streamlined corporate 134

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structure for the German TV channels—now under the management of Andreas Bartl, who sits on the executive board— together with the revitalized local advertising market, created higher profits for the group.The response from the financial community was positive: the company’s preferred stock price skyrocketed by almost 190 percent, to more than €24 a share.

Ratings highlights for the group have included Germany’s Next Topmodel (hosted by Heidi Klum) and Schlag den Raab (Beat Your Host) on ProSieben, and the local legal dramedy Danni Lowinski on Sat.1. SevenOne International, ProSiebenSat.1’s international distribution division, has found international success with the format rights to both BeatYour Host, adapted in numerous territories, and Danni Lowinski. The latter is the first fiction format from Germany to be adapted for the U.S. market, with CBS Television Studios working on a pilot for The CW. For 2011, Bartl is hoping to score ratings increases with more U.S. imports for Sat.1, which has already acquired American hits like Hawaii Five-0 and The Defenders. But the number of new German series will also increase. “We intend to dedicate Monday evening slots to German series,” Bartl says.

In the pay-TV space, Sky Deutschland has been holding steady.

Since its takeover by News Corporation almost three years ago (when the service was known as Premiere), the platform’s subscriber base has remained stable at around 2.5 million. Sky has said that it needs to reach a base of 3 million before it makes a profit.

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A silver lining is on the horizon, with Sky adding a net 131,000 subscribers in the fourth quarter, but the platform will remain in the red for some time as it makes additional investments to improve the service and lure new customers.

MONEY MATTERS

Taking control: Deutsche Telekom has been rapidly notching up subscribers to its Entertain IPTV platform.

Clearly, Germany’s TV market is in a strong position; the question is, how long can it last?

In 2010, advertising revenues totaled €11.06 billion. Of the free-TV channels, RTL came out on top, taking in €2.69 billion, a 17-percent increase over 2009. Ad revenues at ProSieben came in at €1.94 billion, up 20 percent, while Sat.1’s grew by 17 percent to €2.06 billion. However, this does not represent the actual income of the channels, since advertising has been sold at Time for expansion: The format rights to the hit Sat.1 series Danni Lowinski considerably discounted rates in order to entice were recently sold to the U.S. by SevenOne. advertisers.This practice started during the downturn two years ago and has continued despite the rebound. ber of people are no longer paying their TV dues, either because With the robust figures from last year, German TV channels are they are unemployed or because they are simply not making already getting back into the partying mood—too soon, some enough. Nonetheless, the €7.6 billion in license-fee revenues that critics state. it takes in annually make the German public-broadcasting sys“At the moment we’re celebrating last year’s unexpected high tem the world’s richest. growth in TV spending and, maybe for the next couple of weeks, However, programming cuts can’t be avoided, according to will rejoice in the expectation that this year may go on as the last Dagmar Reim, the director general of ORB, the regional public one,” says Jürgen Blomenkamp, the global CEO at GroupM broadcaster of Berlin and Brandenburg and a member of ARD. Trading. “But soon, the heavy punch will strike.We will see that “Some of them will hurt,” she said at a media convention in we are operating in an overmature market.This will be no fun for Berlin last year, noting that all genres, regardless of tradition, will anybody in the TV business.” have to be scrutinized.

Martin Krapf, the CEO of IP Deutschland—which sells advertising across the RTL German portfolio—is of a different PUBLIC OPINION opinion.The rise of the Internet as an ad medium, he notes, will Others are more optimistic about the future of German public compensate for any shortfalls in the TV advertising sector.“Over broadcasting. A new system for collecting the license fee has the last five years [online buys] are increasingly adding to our been approved by the German state governors for introduction revenues and profits,” he says. in 2013. The new model will no longer be based on the numFor the German public broadcasters ARD and ZDF, the key ber of TV and radio sets available in one’s home, given the myriad of devices now available for accessing content. Instead, a flat issue is that of declining license-fee revenues.An increasing num-

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Bookish nature: The public broadcaster ZDF satisfies audiences with a broad slate, from news to highend dramas like the adaptation of Stieg Larsson’s Millennium trilogy.

fee will be levied on all homes, regardless of whether or not they own a device capable of receiving public media services. Some observers believe that with the new system, public broadcasters will have upwards of €1 billion more in funding than they did with the previous model. For sure, this is cause for concern for the commercial broadcasters that are dependent on the highs and lows of the ad market.

Also causing a ripple of fear has been pubcasters’ expansion into digital media, such as Internet portals or mobile apps.These moves are being eyed suspiciously by the German publishing industry, which is afraid that they will interfere with their own digital business models. The reach of the public broadcasting giants can’t be ignored; when ARD launched a free iPad app for its highly popular news format Tagesschau, it saw 700,000 downloads within just a few weeks.

EYES ON THE FUTURE

Digital media is certainly reshaping the German television landscape, with broadcasters’ web portals becoming increasingly popular. RTL Television, for instance, reports monthly increases on its catch-up and preview service RTL NOW for series such as the daily soap Gute Zeiten, Schlechte Zeiten (Good Times, Bad Times). One source indicates that there are times when more people are watching these shows online than on TV. So, not surprisingly, RTL Germany and ProSiebenSat.1 plan to launch a joint video-ondemand platform. The groups have insisted that the ser vice will not be a German Hulu, with the VOD platform to operate independently from ProSieben’s maxdome.

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proposal in mid-March. At press time, it was unclear if the German broadcasters would appeal the decision.

It’s not just the major commercial broadcasters that are finding success online. Deutsche Telekom’s (DT) IPTV service Entertain has been having an almost record-breaking growth spurt. The platform broke through the 1-million subscriber mark in September 2009, and today is reaching as many 1.7 million households, sources indicate.Those numbers are for viewers accessing the regular TV channels, like RTL, ProSieben or the public stations. The numbers for the pay-TV bouquet are far smaller.

Regardless, Entertain offers a very attractive soccer package with Germany’s first soccer league, Bundesliga. The shows are aired in HD and selected ones are even in 3D. There are a variety of reasons that the pay service is not taking off faster. Introducing interactive features in an IP environment requires an enormous extra investment. In addition, DT acquired only the IPTV rights to the Bundesliga. (DT, controlled by the German state, is not allowed to control both the platform and content.) The regular pay-TV rights are held by Sky Deutschland, with a strong subscriber base for traditional cable and satellite service. For that reason, Sky is optimistic that DT will not mount a significant challenge, says a company source. “Talk to the regulators; they are quite suspicious about the current DT strategy,” the source says. “DT will always remain as a distribution platform.” Meaning that, in the long run, Sky could revert to being DT’s natural partner.

Sky is not relying solely on the Bundesliga to drive subscriber gains. Significant marketing spending and the launch of HD and 3D services are finally generating the intended results for Sky Deutschland. The platform also forged new alliances with cable operators. So far, it’s been with the smaller ones, but Sky eventually expects to tie up with bigger operators like Kabel Deutschland (KDG) and Unitymedia.

These partnerships do break with the old Premiere tradition of keeping sole control over its subscribers. And while that measure will be maintained in satellite, in cable the platform is keen to develop new partnerships. “This should have been done much earlier,” states an executive at a Sky partner.

There is plenty of other action taking place in the German cable industry. Unitymedia has been owned by John Malone’s Liberty Global since early 2010. Further expansion of the operator is expected. Kabel BW, a regional operator in the southwest of Germany that reaches more than 2 million customers, is for sale, and Liberty seems to be the natural buyer. Malone already failed once in Germany when he took over the old DT asset, which made up the vast majority of German cable systems in the 1990s, and the deal was nixed by the German antitrust watchdog. If his current plan works, a merged Unitymedia and Kabel BW would have about 8 million subs, second only to the leading cable operator KDG, which has more than 9 million customers.

While foreign money is making its way into the pay-TV business, the commercial broadcasters are increasingly looking outward; RTL’s parent company, RTL Group, is expanding to India.

ProSiebenSat.1’s Red Arrow Entertainment Group has been busily snapping up production companies across the globe. And ZDF’s commercial arm, ZDF Enterprises, continues to invest in international programming rights in addition to monetizing its deep German content library.

Between its international ambitions and its rapidly changing domestic landscape, Germany looks set to remain one of Europe’s most dynamic media markets in the years to come.

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Telecinco’s Hospital Central.

JUMPSTARTING

Spain

The reform of the pubcaster RTVE, consolidation, the digital switchover and new media legislation have changed the face of Spain’s TV market. By David Del Valle

Since the broadcasting industry was deregulated in Spain, in 1990, the country’s TV market has always been muy dinámico— constantly evolving—first with the launch of two commercial networks, Telecinco and Antena 3, which gave public broadcaster RTVE a run for its money, then with the arrival of pay TV in its various iterations, followed more recently by digital terrestrial television. But 2010 witnessed some seismic shifts: RTVE has had to adapt to regulation that stripped it of advertising revenues, Italy’s Mediaset, the owner of the leading commercial broadcaster in Spain, is now also a player in the pay-TV market, and DTT is carving up even further the viewing and advertising of a market already reeling from the effects of the recession.

The good news is that Spain loves its television; viewing is at all-time highs. In 2010, Spaniards spent an average of 234 minutes watching TV every day, 8 minutes more than the previous year, according to the consultancy firm Barlovento Comunicación.

MERGER MANIA

There is no question that the slump in the Spanish economy has put a strain on the entire media industry, prompting what appears to be a trend toward consolidation. Mediaset, Italy’s leading commercial broadcast group and the majority shareholder in Telecinco, recently acquired Cuatro, the TV station owned by the media concern Grupo Prisa, for an estimated €1.05 billion.As part of the deal, Mediaset also got a 22-percent stake in the digital DTH platform Digital+, of which Prisa holds 56 percent.The telecom giant Telefónica also owns a stake 140

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in the platform. Digital+ and Telefónica’s IPTV service Movistar Imagenio have more than 2.5 million subscribers, of which 773,000 are Imagenio’s clients. As a whole, this new group has an estimated market share of 63 percent against the country’s largest cable company, ONO, which has a 24-percent share.

The merger of Telecinco and Cuatro has already caused the first casualty: the shutting down of CNN+.The 24-hour-news channel, which launched in 1999 as a joint venture of Turner Broadcasting and Prisa, had accumulated €40 million in debt in the last three years.Telecinco refused to pay CNN+’s annual costs, and the channel has been replaced by Gran Hermano 24 Horas—the Big Brother channel.

And the consolidation process in the commercial-TV market continues. Grupo Televisa, the Mexican media powerhouse, is the main shareholder in laSexta, with a 40.5-percent stake.Televisa has acknowledged being in negotiations with a number of players to set up a bigger company. Antena 3 might be the most likely partner, although merger talks have failed in the past.The MEDIApro Group, which manages the audiovisual rights of several football clubs, also holds a stake in laSexta, as well as in the pay-DTT channel Gol TV. While commercial TV channels are relying on mergers to weather the financial storm, state-owned RTVE has been surviving without ad revenues since January 2010, when the new financing model, approved by the government, came into effect. The law stipulated that RTVE should be financed with public funding, a tax on the use of radio spectrum and the introduction of two new taxes— one on the revenues of the private broadcasters and the 4/11

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Wake-up call: Los desayunos de TVE, featuring Ana Pastor covering news, politics, interviews and discussions, has been a daily staple on the public broadcaster.

other on the revenues of telecom operators. The reform is now under fire from the European Commission (EC), which started legal proceedings against Spain. The EC claims that the new tax levied on telco operators to finance RTVE—0.9 percent of their total revenues—may violate European legislation. However, the Spanish Supreme Court has recently ruled that the tax is legal and refused to abolish it, dismissing the measures requested by Telefónica, ONO and Vodafone. In the meantime, the Spanish government has tightened the screws on RTVE again, reducing by 6 percent its state subsidy in 2011, bringing it to €547 million. Nevertheless, RTVE has approved a budget of €1.2 billion, which includes €250 million from telco operators, as well as funds from the taxes on private TV channels’ revenues and radio spectrum.

RTVE also makes money from the sale of its programs.

DIGITAL DAZE

Spain entered the digital era with the analogue switch-off in April 2010, five years after the relaunch of DTT, which followed the failure of the pay-DTT platform Quiero. Today, around 45 DTT channels are available in the country, of which three are pay channels: Gol TV, AXN and Canal+ Dos. Out of the total, 33 are nationwide channels operated by the seven national broadcasters: RTVE, Telecinco, Antena 3, Cuatro, laSexta, Net TV and Unidad Editorial.

Traditional pay-TV channels like MTV and Disney Channel have opened themselves up to the free-DTT market in order to reach 95 percent of the Spanish population.The DTT boom has turned the Spanish TV market upside down, although quality content is conspicuous by its absence.The Asociación de Usuarios de la Comunicación (Association of Communication Users)—which aims to defend the interests of Spanish media consumers—has reported that many local DTT channels are breaking the law by broadcasting “inappropriate” content, like adult content, teleshopping or fortune-telling programs, in some cases 24 hours a day.

High-definition and 3D TV are the new challenges Spain is facing after the analogue switch-off. Consumer142

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electronics manufacturers have urged broadcasters to develop HD content to help stir up demand. TVE, Telecinco and Antena 3, and regional networks such as TV3,Telemadrid and Aragón TV are increasingly introducing HDTV transmissions. Digital+ and Imagenio are also launching HDTV packages. The government recently approved a law that requires electronics manufacturers to equip all TV sets larger than 21 inches with HDTV capabilities. However, around 12 million sets in Spain—46 percent of the total market—are not ready for HDTV and another 11 million need a special set-top box.

In the second half of this year, the government plans to set up the State Council of Audiovisual Media to oversee the TV market and guarantee free competition and quality content, among other remits, in accordance with the law. It will be a single regulatory body with responsibilities over TV and telecom markets under the umbrella of the current Telecommunications Market Commission (CMT), like Ofcom in the U.K. or AGCOM in Italy. The creation of this watchdog is the result of an overall broadcasting law that came into effect last May. It paved the way for the development of pay DTT, HDTV and TV cross-ownership, among other things.

It enabled broadcasters to merge and lifted limits on crossownership as long as a newly formed company does not reach a combined 27-percent audience share or have more than two DTT multiplexes.

The law also requires TV channels to dedicate 51 percent of their annual programming to European productions. Commercial broadcasters are obliged to invest 5 percent of their total annual revenues into European productions—theatrical features, TV movies, TV series, documentaries and animation—

The Ratings Race In 2010, RTVE’s channel La 1, with its viewer profile dominated by men 45 and up, was the most-watched network, with an average audience share of 16 percent, followed by Telecinco with 14.6 percent and Antena 3 with 11.7 percent. In January 2011, La 1 had an average share of 15.2 percent, but that was down from 15.5 percent in December. Telecinco had an audience share of 13.4 percent, ahead of its rival Antena 3 with 11.6 percent. Telecinco is the favorite channel among women 25 to 44, whereas Antena 3’s sweet spot is young people between 13 and 24.

The smaller networks laSexta and Cuatro both pulled in a 6.3-percent audience share in January.

Regional TV stations drew an average audience share of 11 percent.

The DTT boom has contributed to a fragmentation of the audience. Overall, DTT channels drew an average share of 18.5 percent in 2010, with the children’s channels Clan, Neox and Disney Channel leading the ratings. Thematic TV pulled in an average share of 7 percent, with FOX, AXN, Canal Plus and Paramount Comedy taking the lead.

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The in crowd: One of Antena 3’s top series is Física o química, with production currently under way on season seven.

while state-owned channels must invest 6 percent.

The new legislation also opened the door for payDTT channels at a time when the pay-TV market in the country is deadlocked.

Today, IPTV leads the growth in the pay-TV market with the Telefónica-controlled platform Movistar Imagenio.

According to the CMT, payTV subscribers grew to 4.19 million by September of last year. Prisa TV, formerly Sogecable, leads the market, but Maintaining control: In Spain’s very crowded pay-TV landscape, Digital+ is still a leader in not the growth, with a 42.3terms of market share. percent share through Digi41.1 percent and 152.5 percent, respectively, capturing a martal+ with 1.8 million subscribers. ONO is second, with a market share of 22.8 percent and 954,267 subscribers, whereas ket share of 2.6 percent and 2.8 percent, respectively.

TV consumption in Spain continues to grow despite tougher Movistar Imagenio has an 18.4-percent share and more than competition from other media like the Internet. Football is the 770,000 clients. Other, smaller cable companies, such as most widely watched programming genre. The January match Euskaltel,Telecable or R; IPTV operators like Orange; mobile TV companies; and now pay-DTT channels complete the between Barcelona and Betis, as part of the Copa del Rey (the King’s Cup) tournament, drew almost 6 million viewers and an highly saturated pay-TV picture. average audience share of 28.7 percent. In scripted entertainment, local TV series like Cuéntame como pasó on RTVE’s La 1 or El (B)AD TIMES Hit by the economic crisis, Spain’s TV ad market is now one- barco on Antena 3 are performing very well, with shares of 24 perthird smaller than it was in 2007, and it seems like the golden cent (almost 5 million viewers) and 23.4 percent (4.8 million viewers), respectively. Spanish TV channels rely mostly on entertimes will never return. Last year saw a slight recovery, with an estimated growth of 4 to 4.5 percent, due mainly to the FIFA tainment to capture audiences, followed by fiction and news.

The dust has yet to settle in the Spanish TV market, with World Cup, compared to a 19-percent drop the previous year. more consolidation to come. Commercial broadcasters are Advertising spending is expected to grow by 2 to 2.5 percent still grappling with having to help fund RTVE. Meanthis year.

To complicate matters, more players are vying for the same while, the growth of DTT and IPTV channels continues TV ad pie. The DTT boom largely contributed to fragmen- to fragment viewing and tation of the audience and of advertising revenues. But the advertising. One thing advertising ban on RTVE freed €500 million in ad revenues remains certain for now, h oweve r — S p a n i a rd s to the benefit of its main competitors in the commercialTV market. Pay-TV channels and commercial DTT stations continue to say me encanta la televisión. took the lion’s share of the TV ad growth, with increases of

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ZEILER: We’re already learning a number of things, although

RTL Group’s

Gerhard Zeiler With 40 TV channels and 33 radio stations in 10 countries, the RTL Group calls itself the leading European entertainment network. That is because besides operating leading TV stations, such as RTL in Germany, M6 in France, Antena 3 in Spain and RTL 4 in the Netherlands, it also owns FremantleMedia, one of the largest international creators and producers of program brands in the world. RTL Group’s CEO, Gerhard Zeiler, talks about the strengths of the group’s channel strategy and its program-producing prowess.

By Anna Carugati

TV EUROPE: What growth are you seeing in the digital channels and what audience niches are they attracting?

ZEILER: I’d rather talk about a “family of channels” concept where you have different generations of channels.Viewers don’t care whether it’s digital or analogue, they just want to watch their favorite programs. All the European countries where multichannel television developed earlier—Germany, Belgium and the Netherlands—have second-generation channels that are quite big. In Germany, for example, our channel Vox has an audience share of almost 8 percent in the target group, and Kabel1 from our main commercial competitor has a 6.5-percent share. In France, the second-generation channel of M6 Group is W9.The digital terrestrial channel was launched in 2005 and now has a 4-percent audience share in the commercial target group. These are just different stages of development. Eventually, everything will be digitized and there will be hundreds of channels in every country.

You might have more cable penetration in one country, more direct-to-home satellite in another, and in yet other countries you may see an impressive penetration of IPTV services, like in France. But for the broadcasters, this doesn’t matter. In principle, you still have the same landscape: there are two or three major TV groups, and then there are a lot of small channels which address defined niche audiences.

TV EUROPE: What are you learning from your various catchup-TV services?

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we’re still at an early stage. First of all, catch-up TV is not cannibalizing linear TV. Linear TV is still growing, and so far catch-up TV has been additional viewing.

The second aspect concerns fragmentation. In the linear world, digitization always meant further fragmentation, with viewers being spread over ever more channels. In the nonlinear world, it’s the opposite: on-demand means less fragmentation. If you take a closer look, it’s quite logical.What do people watch on demand?

Their favorite shows they missed on linear TV because they weren’t at home or had other things to do, or there were other programs that were even more interesting. So on-demand viewing is about viewing blockbuster shows. Regardless of whether you look at data from the U.S., U.K., France or Germany, it’s always the same picture: the top-rated shows get a much higher share on nonlinear than in the linear world. In other words: ondemand favors the most popular programs, favors big channels, and therefore favors companies such as RTL Group.

Finally, nonlinear is all about what you missed in a serial. So Desperate Housewives and Lost are watched more than CSI.This is true not only for the fictional world but also in the reality genre.

A program such as Come Dine with Me in France is one of the top shows on nonlinear because it’s serialized.You know the results will be presented on Friday but you missed Wednesday’s episode, so you want to know what happened and you catch up on nonlinear.

TV EUROPE: What opportunities do social networks like Facebook and Twitter offer broadcasters, and how is the RTL Group using them?

ZEILER: We’re all still experimenting, and I don’t think anyone can say today what the combination between social networks and TV will be in the future. It’s a great marketing tool, for example, for event shows such as I’m a Celebrity, Get Me Out of Here! or the Dutch talent show The Voice of Holland. I also believe social networks can provide access to creative people. TV is about professional content, but how do you find the future creators of great programs? And for young creators, the key question had always been how they can catch the program director’s attention if they had a show or idea to pitch. Now they can put it on YouTube or Facebook, create a buzz without huge costs—with a fair chance that professional commissioners and the people who are scouting next-generation creators will see it. Social networks connect broadcasters and producers with young talent. In the future, we’ll be seeing much more of this as a positive impact of social networks.

TV EUROPE: How has FremantleMedia managed to keep its finger on the pulse of what viewers want to watch? That can’t be easy.

ZEILER: A production company is in the creative business, which is always more volatile than a stable business like broadcasting. A producer can’t be as flexible with its costs as broadcasters can. Managing an international production group is essentially about managing talent.To look into someone’s eyes, talk with him or her and say, I believe in this person and I will let this creator develop the next show, that’s the big challenge— being on the cutting edge of what happens next. It’s absolutely great to have such a creative powerhouse as FremantleMedia in our group; it’s the true forefront of the TV industry. Broadcasters have more time to look at what is developing and to decide where to invest. Production companies have to be first.

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the commercial channels and to the BBC’s channels. And that’s very beneficial for the production community.

In the Netherlands it has to do with the fact that there has always been a strong relationship between producers such as John de Mol and the broadcasters. For example, RTL Nederland has an ongoing output deal with John de Mol’s Talpa Media. At the same time, John de Mol’s company is a minority shareholder in RTL Nederland. The fact that the Netherlands is a relatively small country also nurtures a positive mind-set when it comes to trying out new concepts and experimenting.

Magical journey: FremantleMedia Enterprises has been rapidly expanding its slate of drama, which includes the BBC One commission Merlin.

TV EUROPE: So the bigger the country the more expensive it is to improvise?

ZEILER: Yes, and the higher the risk.

TV EUROPE: Is the recession yesterday’s news, or are you still

TV EUROPE: The Hollywood studios are starting to get into the

feeling the impact of it? And where do you see growth?

format business. Sony has for a while, but it’s a long way to get to where FremantleMedia and Endemol are, right?

ZEILER: They’ve got a very long road ahead of them. Why? It’s not about creating a new format or two. It’s about having the capability to roll them out worldwide. Actually, rolling out formats such as Idols, Got Talent or The X Factor worldwide is not that difficult. But to roll out a format such as Hole in the Wall to 41 countries within 18 months, you really need a great organization. And to build this organization from scratch is what Endemol and FremantleMedia have done. To get what they have will cost you either an incredible amount of money, or you have to be really brilliant and lucky. At the very least, you have to have deep pockets.

ZEILER: TV advertising in Western Europe has rebounded with

TV EUROPE: Do you think the studios have waited too long to

catch up?

ZEILER: No. Remember, the studios have always been very

focused on the U.S. Yes, the importance of international has grown quite dramatically over the last 10 to 15 years. But if you have a domestic market where at least 80 percent of the money you make is from either drama or sitcoms, then you don’t really focus on anything that has to do with reality and entertainment formats. When I look at what the U.S. networks are doing in terms of non-scripted programming, I recognize that a lot of them will only take a show if it’s already successful in Europe, and mostly if it has been successful in the U.K. As the U.K. is FremantleMedia’s home ground, that’s good for us.

a vengeance. Nobody, not even the most optimistic of optimists, would have thought we’d see TV-advertising growth rates of 9 to 11 percent in countries such as Germany, France, Belgium, the Netherlands.The U.K. was up almost 18 percent in 2010. At the same time, advertising markets in Central and Eastern Europe did not recover, but we can assume that most CEE markets have bottomed out. Southern Europe is more difficult, except for Spain.Though the country’s macroeconomic situation isn’t the best, its TV-advertising market saw pretty impressive single-digit growth in 2010.

Probably what happened is that in some of these countries TV advertising became so cheap during the recession that other media turned to TV. The newspaper and magazine businesses are still declining, so that could be one aspect. In Greece, the TV-advertising market has dropped 40 percent over the past three years.

TV EUROPE: Germany should own a few islands in Greece.

ZEILER: Some people made remarks to that effect and there was

quite an uproar. Germany’s biggest tabloid, Bild, ran a headline that read,“Sell some of your islands, Greece.” It was a nightmare!

And our company is seen as ‘the Germans’ in Greece. At least, I can always say I’m Austrian, I have nothing to do with it.

TV EUROPE: You have strong bases in the U.K. and in Hol-

land. Both are strong incubators of formats.Why is that?

ZEILER: In the U.K. you have a completely different balance between creating and producing on the one hand and broadcasting on the other hand. I’m not even talking about the rights situation, that’s another issue. If you have a successful afternoon daytime show in Germany or in France you air it 250 days a year. And if you have a lot of money you can afford 190 original episodes. With less money available you might cut it down to 170 original episodes, but it’s still the same show and the rest of the days you run repeats of the show. That’s how we program schedules in Germany, France and Spain. In the U.K. it’s a maximum of 60 new episodes a year. Even if it’s a hugely successful format they don’t air more on the channel.

Don’t ask me why. But as a result, more new formats make it to 4/11

Working in harmony: FremantleMedia has production operations across the globe, including in Germany, where it produces the hit Das Supertalent, based on the Got Talent format, for RTL. World Screen

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Zodiak’s

David Frank The Zodiak Media Group was formed last year when the Italian De Agostini Group acquired the RDF Media Group. The combination formed a company that consists of 45 production outfits with a presence in 17 countries, including the U.S., the U.K., France, Italy, Spain, Scandinavia and Russia; and an international-distribution business whose catalogue contains more than 10,000 hours of programming. Zodiak’s content spans a variety of genres, including factual, entertainment, drama, children’s, lifestyle and comedy, and this range is what David Frank, the company’s chief executive, considers to be one Zodiak’s main competitive advantages.

By Anna Carugati

TV EUROPE: What benefits were Zodiak and RDF looking to gain from a merger?

FRANK: If we look at Zodiak first, it is a group that was built from about 2008, when our majority shareholder, the De Agostini Group, embarked upon a project to position themselves in the content business.They began with the acquisition of Magnolia Group in Italy and Spain. Next was the acquisition of Marathon Group in France, followed by Zodiak Television, a publicly listed group headquartered in Stockholm.

At the point at which Lorenzo Pellicioli [the CEO of the De Agostini Group] got into a dialogue with me at RDF, there was clearly a fairly substantial hole in their ambitions to be a global content player because they didn’t have a meaningful presence in the U.K. or in the U.S. They had a relatively under-developed international rights business. They did have some very strong rights activities attached to some of their local companies, Marathon Media and Marathon Image in France. When looking for the final piece of the puzzle—a content company that had a major presence in the U.K. and 148

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a presence in the U.S. and ideally could enhance the international rights-exploitation business—that’s what we had.The fit was extremely good for both parties. There is relatively little overlapping in the two businesses even though we were both very active in the creation of TV content and its exploitation.

From an RDF perspective, the RDF Media Group had evolved originally in the U.K., where it was founded, then expanded into a group and, over the course of a decade, became a multi-genre producer. At the same time, we also moved into the U.S. We became a public company to finance this and although we were a U.K.-U.S. company with an international-distribution arm, we had never become a global player. Because the operations in the U.K. and the U.S., two of the most important TV markets, were well financed and used to innovation, we had no economic compulsion to move into new markets in the way that an Italian producer—with all the constraints in the Italian market, where it is very difficult to launch new shows, [there are] relatively few buyers, and [it] is quite political—would have a crying need to expand and grow outside of Italy. Similarly, a Dutch company—that is the story of Endemol: it started in a small territory and expanded rapidly— would have to move outside that market in order to grow.

However, from a longer-term strategic point of view, the RDF management team recognized that in the changing landscape of the global broadcast business, it would be extremely helpful to be part of an international group that would give us direct access to other markets. So when Mr. Pellicioli and I got into a dialogue, it became apparent very quickly to both of us that it was a very strong marriage based on the equal and opposite needs of both parties.

TV EUROPE: Would you give us an example of how you

are trying to make one of the individual companies more international?

FRANK: Magnolia TV [which is now Zodiak Southern Europe] is a perfect example of where the aggregation of a group works to the benefit of the whole. The greatest experience we have within Zodiak of producing very large live entertainment shows is in Italy, because Magnolia produces The X Factor and Celebrity Survivor—very big, very expensive longrunning shows with big audiences. A huge amount of skill and experience is required to put on shows like these. The problem they face is that they don’t have the opportunity to turn that knowledge into new business. What we are doing is using that skill and experience to contribute to our development efforts outside of Italy. We can get the guys who made The X Factor in Italy to connect with the guys who develop shows, let’s say, in the U.K., so that we can then sell a show to a U.K. broadcaster using that experience and expertise. We are crossing a border that would have been impossible for Magnolia to cross unless they were part of a bigger group.

TV EUROPE: Is there a challenge to get individual companies to share know-how and best practices?

FRANK: There is a challenge and I would put that as the number one challenge facing me. It’s a very exciting challenge; there are other challenges that I would put into the category of unpleasant! I would say the creative challenge is absolutely central to the success or otherwise of this group over the next five years. Hence, it’s become my single most important priority. I’ve got a team at HQ that is working 4/11

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in an environment where cost is becoming absolutely paramount. A production group that puts a premium on its ability to be flexible and embrace new technology enables us to deliver high-quality programs at a slightly different rate and that’s a huge competitive advantage to have. If we can identify some of those practices in one place in the group, we can then transfer them very rapidly to other areas in the group because we can control that communication.

New home: Zodiak’s Being Human has been adapted by Syfy in the U.S.

on all aspects of what I call creative renewals. One element of that is how can we position ourselves so we understand better the audiences that we are trying to serve. Producers are very, very guilty of not bothering to invest enough time in understanding the audience that they are serving. We are locked in a kind of strange world where we are in a B-to-B business developing ideas that we sell to broadcasters. And yet the success of that B-to-B business is based on a B-to-C business, which is our ability to reach people at home to watch our programs. But it’s the broadcasters and the advertisers that fund broadcasters [that] have the direct relationship with the audiences. So one initiative we are putting in place is essentially a research development center, which is built around consumer trends, audience behavior, and the ability to get audience reaction to content that we are creating before we even pitch it to broadcasters. We’ve got sophisticated tools to assess the merits of what we think is a good idea.

We are trying to address that. We are putting in place a significant program for the exchange of expertise. One of the things that struck me in my first six months traveling around the group for the first time is the huge and really interesting array of methodologies in development, pitching and in production. In other words, if you look at the way a show is pitched in L.A. versus the way a show is pitched in Norway, they are significantly different. I’m not saying one is better than the other, but I definitely know that the two parties would benefit from looking at each other’s methods for engaging commissioning editors to buy their shows.There is a huge array of ways people stimulate creativity at the local level with development teams and brainstorms and the methods they use—there is a lot to be shared in that area—and in production techniques, particularly 150

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TV EUROPE: Of the many genres Zodiak produces and distributes, are there any in particular you are focusing on?

FRANK: One of the key points of differentiation—which I embrace and want to make a virtue of—between us and some of our major competitors, like Endemol and FremantleMedia, is the breadth of our output. People think of Endemol, for which I have enormous admiration, as an entertainment company. Endemol does some other things as well, but its brand is principally built around the fact that it does Big Brother, Deal or No Deal and Wipeout—all entertainment shows.

What I really like about Zodiak is the very fact that we are a significant player in drama, kids’, factual and many other genres.Take kids’, for example.When you aggregate our kids’ businesses we are genuinely a world leader in that area and yet no one from the outside would say, “Oh Zodiak, that’s a kids’ business.” And the reason is because it’s not a kids’ business, but Zodiak has a very large kids’ business within it. Similarly in the scripted area we’ve had great success with our Scandinavian company,Yellow Bird and the Millenium trilogy. We’ve got a very good scripted business in the U.K. and a sizeable one in France, but no one would look at Zodiak and say, “It’s basically a drama house.” If you look at the entertainment area, in certain territories like Italy, Spain or Scandinavia, we are making some of the biggest entertainment shows in Europe, but again no one would say that we are just an entertainment company. So very deliberately I don’t want to prioritize one genre over another. I want to foster an environment in which we celebrate success in any of these genres. We seek out the opportunities in those areas, whether those are transactional opportunities in broadcast schedules, or whether its acquisition of companies or talent.

What we are trying to do is build a very broad portfolio because my theory is that as a point of differentiation we are a pure content player.We do not [own] and we have no interest in owning a broadcast platform. Our business model is built around creating content for audiences and we are neutral as to where those audiences exist.

A company like Zodiak Active is a very sizeable digital business, doing €40 million of sales per annum mostly in the nonstandard platform space. By virtue of our staying a nonbroadcast content [player], with a very broad geographical and genre base, we position ourselves to be much more attractive to a lot more media partners than would otherwise be the case. For example, in the development of our relationships with brands, which is a key priority and is one which is being executed largely through Zodiak Active, we have become a much more attractive producer for a brand by virtue of the fact that we are not stuck in any one genre.

So we can deliver, whether it’s a campaign or a message, in any form and in many territories. I want to develop a philosophy that says we are at our heart a creative people’s business that is just intent on making great programs.

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Since first acquiring a 14.58-percent interest in the German payTV platform Premiere in January 2008, News Corporation has steadily invested in the company. It re-branded the service as Sky Deutschland, upped its stake to 49.9 percent and implemented the strategy of offering quality content, innovation and advanced services, which has already proven to be successful with Sky in the U.K. and Sky Italia. Brian Sullivan, Sky Deutschland’s CEO, who spent more than a decade at Sky in the U.K., talks about meeting the underserved needs of the German pay-TV market.

By Anna Carugati

TV EUROPE: Innovation has always been part of the DNA at

News Corporation. How do you gauge at what time to introduce something new?

SULLIVAN: The biggest change in the last 20 years is that people still watch as much if not more television, but they watch it on their own time. The more you can focus on ultimately what that customer wants, the more success you are going to have as a pay-TV operator.

We did a number of things in the last year that have just barely started us on that path. When we saw that the iPad was coming to market, we gauged it was probably going to be the first true second-screen device [beyond the TV screen] that was going to reach some kind of mass appeal. We decided to introduce our Sky Sports service on the iPad on a live basis, as soon as the iPad launched here in Germany and right around the World Cup.We had the rights to the World Cup and we showed the matches, as well as all of our other great sports content, directly on the iPad.That was a great way of getting people to pay attention to Sky as a service and a product, as opposed to the history of the company, which has had its peaks and valleys. We want people to talk about what they will potentially be buying from us because they think the service we have is fantastic.

We then went a couple of steps further. We increased that service on our iPad to bring in our HD sports channels. We made it available on 3G as well as Wi-Fi and we introduced our service onto the iPhone as well.We’ve been doing a lot of things that have been setting the stage for the next three to five years, when we think that consumption of media, while still primarily being on the TV set, will start to get augmented by other devices as well. We want to make sure customers can get our great services wherever they want to.

[Last year] was a lot about setting the stage and turning the attention away from the history and more about the future.

[This year] is going to start to deliver that future in a more concrete and exciting fashion. We think we are on a really good path with a good wind behind us to finally unlock the potential of what is the last untapped major market in Europe.

Launching Sky Sports News HD next winter will add significant value to our customers and give us another daily opportunity to prove our leadership in providing unique content.The channel will be the first and only 24/7 live sports news channel, and will be hiring over a 100 new staff [members], among them more than 50 sports journalists.

Sky Deutschland’s

Brian Sullivan

TV EUROPE: What do you consider must-have programming?

SULLIVAN: It’s about as broad as you can expect it to be.

Here in Germany and Austria, we start first and foremost with football and obviously the Bundesliga. It’s the cor152

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nerstone of our business and will remain so for years and years to come. The subtlety about our business that people don’t necessarily understand yet is that our customer base comes from a much wider spectrum than just football. We had a very strong fourth quarter and during that time we sold really well across all of our packages, but the package that actually sold best was our film package. Some people think subscription pay-TV film services are a bit passé because of DVDs and online video services, but the fact of the matter is that they are spectacular value. Particularly when you deliver film packages in HD, they are spectacular value with great convenience and picture quality as well. They are as much a part of our growth story as sport is.

Increasingly—and this is a market that has struggled with this in the past—our growth now spreads across to basic services, what we call our Sky Welt. There is a bit of a reputation here in Germany that because there are so many free-to-air channels, basic pay-TV channels really don’t stand much of a chance. And that is just a myth. There is just as much free-to-air choice, if not more, in many other European markets as there is here in Germany, the only difference is there’s been a lot of free-to-air choice for a long time here. But consumers are responding incredibly well to high-quality highly differentiated channels of programs. We have value-for-money scores increasing across all of our packages, but the package that has had the most significant increase in value for money over the course of the last six months has been our basic package. And that for me bodes very well for the future of our business. We don’t want to be just about one particular component or product, we want to be about the full entertainment spectrum: quality, quantity and convenient access.

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company called BASE Productions. They produce an excellent factual show called Police POV, which we launched last market. And we have a deal with Wild Pictures, which produced a critically acclaimed documentary series for ITV1 on the Holloway women’s prison.

We’ve got some very successful longer-running relationships with producers and at MIPTV we’re going to be launching some of their shows. Mammoth Screen has a new medical drama for ITV1 called Monroe starring James Nesbitt, which looks phenomenal. We’ve got very high hopes for it. And with Ruby Films and Television we will be launching Case Histories, which stars Jason Isaacs and is based on the very successful series of books by Kate Atkinson.

TV EUROPE: And you have been forging partnerships

ITV Studios Global Entertainment’s

Maria Kyriacou As the international distribution arm of ITV, the leading commercial broadcaster in the U.K., ITV Studios Global Entertainment represents more than 35,000 hours of original and formatted programming from ITV Studios and from leading independent producers. Maria Kyriacou, managing director, talks about the importance of securing a constant flow of content that has international appeal.

By Anna Carugati

TV EUROPE: What have been your goals since you took over ITV Studios Global Entertainment?

KYRIACOU: We want to be known as the place for the best content, which is the key to all of this.You have to have the right kind of content to sell to broadcasters, and that’s where our success is going to come from. Adam [Crozier, the chief executive of ITV] has reiterated a number of times that a key objective of ITV’s transformation is creating content that resonates internationally. We also want to be known as the best distribution network for producers and providing them with the best possible service. We are a large-scale distributor and we can use that to make sure producers’ shows get into as many homes as possible. I’d like us to be known as a totalvalue distributor. We can deliver not only to audiences on television but to consumers who want to connect with shows in different forms, whether it’s a book or it’s online, or if it’s a kids’ property it could be toys or apparel. We are really focused on how we can grow our consumer-products business so that we are a total-value distributor.

TV EUROPE: You have also been making partnerships with

third-party producers.

KYRIACOU: We announced last MIPCOM our distribu-

tion deal with La Plante Productions and that’s the kind of content that ITV has long been associated with.We’ve got the latest Above Suspicion and we will be launching it at MIPTV. We also announced a distribution deal with an L.A.-based 154

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with broadcasters.

KYRIACOU: We have a relationship with Hunan TV in China and we think we are breaking some new ground with this. Hunan TV and ITV have gotten together not only to bring some Western ideas into China, but also to recognize that the Chinese market has its own cultural identity and we really need to be developing on the ground specifically for the Chinese market. We have a co-development deal and together we intend to develop brand-new ideas and then we at ITV can distribute them across the globe.

TV EUROPE: You mentioned you are developing your consumer-products business. What is the strategy?

KYRIACOU: Step one was to hire a well-respected, very experienced executive named Jean-Philippe Randisi. He previously worked at MTV Networks International. He was also at Saban Consumer Products Europe and Walt Disney Records. He comes from a world where creating and exploiting brands is bread and butter. With Jean-Philippe we’ve put home entertainment, promotions and merchandising and licensing under one roof.With him in place we will start to create greater scale at an international, rather than just a U.K., level. Part of the process is to [see] what we’ve got in our library, where we’ve got a lot of very valuable IP, and have a look at re-inventing some of the shows that are in there.

TV EUROPE: In what areas do you see growth?

KYRIACOU: For us it’s all about creating content. We are

going to spend a lot of time with ITV Studios here in the U.K. and with the international offices using our first-hand knowledge of the global TV market to ensure we are developing more internationally relevant content. We are also building relationships with third parties. So our growth is about bringing the right type of content to market and exploiting it in the right way.

One area we want to be more active in is co-productions.

We believe there is a market for international collaboration on bigger projects and, as an example, we’ve got Titanic. This is an ambitious, high-value production. Julian Fellowes is writing it and in collaboration with Lookout Point we have secured presale co-production partners in the U.S., Canada, Ireland, Spain, Portugal, Sweden, New Zealand and Australia—partners who have come on board early to co-produce and co-fund. I believe there will be more of these large-scale international collaborations.We’d like to build some calling-card-type brands to add to our extensive and broad-reaching output.

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