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June 19, 2007
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This newsletter is a biweekly rundown of global (Europe, Asia, Latin America) multichannel television developments in cable, DBS, advanced services (high-speed Internet, VOD, VoIP, interactive TV, IPTV) and program sales.
Mobile TV
Animax Expands Footprint Via Mobile TV Sony has taken the unorthodox step of launching its Animax brand on mobile TV in Canada and Australia — markets where the animé service has not been launched as a linear TV channel.
The move, which marks the first launch of the Animax brand on a mobile platform, will add a two-hour loop of Animax Mobile programming on mobile network 3 in Australia on June 12. The Canadian service will launch in July on Bell Mobility.
“It is the inverse of the more traditional approach,” said Andy Kaplan, president of international networks for Sony Pictures Television International. “But it is our way of introducing the Animax brand into those markets and it will help move us towards a linear channel.”
Kaplan adds that they are developing more Animax mobile products for other markets as part of a larger effort by the studio to expand content from their linear channels to mobile, broadband and other platforms. Sony has already rolled out an AXN mobile offering in Germany and some Asian markets. Some promotional content from its SET service has also been launched on mobile in India.
“In markets where we already have TV channels, we see mobile as an extension of the brand and a way to cross promote the channel and reach a larger audience,” Kaplan said. “In other markets, like Canada and Australia, we see it as a way to enter and lead our way into the market.”
The mobile products could also lead to broadband content offerings over the next year and a half, he added. “They go hand in hand and are part of our three screen strategy.”
As part of that three screen strategy, Sony acquired international TV, mobile, broadband and gaming rights for 130, two-minute episodes of Afterworld, an animated drama that is designed to play across multiple platforms.
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Advertising
Petry Seeks International Growth As advertisers expand globally and TV channels look for new ways to increase their ad revenue, rep firm Petry Media has decided to ramp up its international operations, said company chairman Earl Jones.
In April, Petry announced a deal to represent European sports network Eurosport to U.S. advertisers and is currently in conversations with a number of major European broadcasters about providing similar services.
In the early 1990s, several U.S. media rep firms tried to expand internationally but made little headway. Jones said that today, several factors have turned international markets “into a huge opportunity for us.”
Unlike the early 90s, when Europe’s pay TV industry was in its infancy, many international cable and satellite channels like Eurosport have reached a critical mass in terms of their distribution and the quality of their programming. These channels are now trying to capitalize on their growing audiences by expanding their advertising revenue.
In addition, Jones said, “There are many midsized U.S. advertisers in the travel, financial services, computer and other industries that wish to reach affluent international audiences but don’t have the ad budgets that would warrant doing multiple country buys with a number of ad agencies.”
With its large U.S. sales force and network of offices, Petry is ideally positioned to put together media buys that can help the international channels and those U.S. advertisers. “We can help international channels build up their revenue very efficiently with far less investment in infrastructure,” while helping advertisers market their goods and services outside the U.S., Jones said.
As part of the Eurosport deal, Petry will be responsible for developing North American advertising revenue for four TV networks, Eurosport, Eurosportnews, Eurosport 2 and Eurosport Asia, as well as the eight Web sites.
“Eurosport delivers 40% more CEOs than all the news networks combined but without a strong U.S. presence, it is very hard for them to capitalize on the strength of their audience and programming,” Jones said. Because of their expanded digital sales efforts, Petry can also offer cross media buys for the Eurosport channels and Web sites to clients.
Petry’s international push grew out of a strategic review of the company’s business Jones instituted after being named chairman. This review identified three key fast growing areas: digital media, out of home media and international markets.
Since then, the firm has been hiring executives with international experience. It has a London office and is eying the possibility of opening others. “We see a very big opportunity to develop a global footprint,” for our services, Jones said.
Petry’s push to expand internationally also reflects Jones’ background and his lengthy experience in international markets. In the 1980s and early 1990s, he distributed TV programs internationally and worked on the privatization of a number of TV networks in France, Chile and Spain.
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GLOBAL BRIEFING
IPTV Set To Take Off In Eastern Europe Eastern and Central European markets offer one of the most promising growth regions for IPTV, according to a new report from Strategy Analytics.
“Because multichannel television isn’t as well developed in the region and because you don’t have strong digital cable and satellite offerings, it is almost virgin territory,” Strategy Analytics director of digital media research Martin Olausson said. As a result, “telcos are likely develop into a much stronger IPTV platforms that will get a large market share relative to cable than they’re likely to achieve in most other regions.”
The lack of a developed digital multichannel infrastructure will also encourage operators to embrace fiber. “The Eastern European incumbents are going directly to fiber to the home at a much faster rate than their counterparts in Western Europe,” Olausson said.
A number of incumbent telcos in Eastern European markets are also owned by major global telecommunications firms, giving them a competitive advantage over many of the smaller, less well-capitalized cable companies. France Telecom, Deutche Telecom and Telefónica all have investments in the region.
“You have some very strong competitors like Liberty Global’s UPC systems which are upgrading their networks,” Olausson said. “But there are a lot of small, local systems that don’t have the financial muscle to compete. There has already been a lot of consolidation and there will be more.”
While the report predicts that IPTV telco offerings will gain more market share than those in Western Europe or other regions are likely to achieve, Olausson stressed that conditions will vary significantly from market to market and that potential popularity for IPTV isn’t necessarily bad for cable.
Stronger operators like Liberty Global are likely to continue to perform well as they roll out triple play offerings and other operators may move directly to IPTV as they upgrade their networks, he said.
The most active markets for the rollout of advanced services will be Poland, the Czech Republic, Hungary and other markets where strong incumbent telcos owned by large Western European telcos are competing with well capitalized operators, the report said.
But Olausson also sees a lot of interest in Russia. “It is very underdeveloped territory where you have 50 million TV households and very little pay TV,” he said.
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Canadian regulators have approved CTVglobemedia’s acquisition of CHUM Ltd., but stipulated that CTV must sell CHUM’s Citytv stations in Toronto, Winnipeg, Edmonton, Calgary and Vancouver. In response, CTV announced an agreement for Rogers Media to acquire the five stations for about $351 million. Even with the sale of the Citytv assets, CTV has added seven TV stations, 34 radio stations and whole or part ownership of 20 cable and satellite channels.
As part of an ongoing effort to streamline its international operations, MTV has sold its stake in MTV Russia to Russian production company Prof-Media, which will run the network under a licensing agreement.
In Spain, Prisa’s CEO indicated that the media group may consider selling its stake in Digital Plus DTH platform, possibly to a telco. One likely buyer would be Telefónica, which already has a 17% stake in the platform.
ESPN has acquired the world’s largest cricket site, Cricinfo from The Wisden Group for an undisclosed sum.
Franklin Resources has increased its stake in Eutelsat from 5.49% to 10.02%.
Liberty Global’s UPC Telemach has acquired a 66.7% stake in Slovenian cable operator Ljubljanski Kabel for about $13.4 million. Separately, UPC Romania has acquired Romanian ISP, Sebmar, which has about 2,000 customers for an undisclosed price and UPC’s Chellomedia has bought the 50% stake in Minimax kids’ channel, giving it 100% ownership.
France Telecom has acquired Ya.com, a Spanish ISP, from Deutsche Telekom for about $428 million.
Naspers has acquired a 37.5% stake in the German mobileTV operator MFD, which offers services in 16 cities.
Canal Plus has launched a free satellite service, TNTSat, which will include the 18 free-to-air channels currently available on France’s DTT platform.
Virgin Media plans to launch general entertainment service Virgin One on the digital terrestrial TV platform Freeview in the fall, replacing Sky One, which was pulled off Virgin’s lineup in a carriage dispute with BSkyB. Virgin One, which will run on DTT and cable, will focus on “the very best U.S. and U.K. programming,” the operator said, creating another program buyer in the U.K. market.
PCCW has launched a new multimedia platform called ‘eye’ that will make interactive services and content available on a devise that includes a 4.3-inch screen and stereo speakers. The eye can be used as a personal TV set, a music player or to access the Internet.
Telefonica has launched IPTV in Santiago, Chile, its first in Latin America. In Poland, Telefonica Dialog has begun trials for an IPTV service.
In Portugal, Portugal Telecom has launched a triple-play service Meo, which will include an IPTV offering of 78 channels. The telco is investing about $13.4 million to launch the service, which is available in Lisbon, and it hopes to sign 10,000 to 30,000 subscribers by the end of 2007.
In Sweden, TeliaSonera has launched a digital-TV package that includes such VOD offerings as TV 4 Anytime, which had previously only been available on the Internet.
Research firm iLocus reports that about $158 million worth of IPTV gear, including nearly 1 million IP set-top boxes, were sold in the first quarter of 2007.
Separately, Strategy Analytics predicted that IPTV set-top sales will hit 7.9 million in 2007, up 111% from 2006. By 2012, sales will hit 33.5 million.
In other research news, there were 298 million broadband subscribers in the world at the end of the first quarter, U.K. research firm Point Topic estimates. The U.S. remained the largest market at 60.4 million subscribers, followed by China with 56.3 million and Japan at 26.5 million.
In one of the first major programming deals between a Hollywood studio and a U.K. broadcaster since the Screenings, Channel 4 and E4 have acquired rights to the rookie drama series Dirty Sexy Money and Reaper from Disney ABC International Television.
In the run-up to this week’s DISCOP in Budapest, Endemol International announced it is now producing 26 formats in Eastern Europe and that it had recently signed a number of new deals with ONT in Belarus, Polsat in Poland, Antena 1 in Romania and a number of other broadcasters.
Granada has inked a VOD deal with Orange in France for a wide variety of dramas and feature films.
The Voice of America has launched a three-and-a-half minute daily video webcast, the Daily Download, which features U.S. and international news.
In Germany, Premiere is launching on online sports portal Spox in the fall.
It was also a busy period for channel launches. In Japan, J:Com announced plans to launch a HD sports channel, J sports Plus.
In the U.K., Tiscali has inked a deal to carry three Disney channels on its IPTV service.
News Service Russia Today is now available free-to-air on the Sirius satellite system in the Baltics and Nordic countries.
In France, Club Internet will offer 15 Music Choice channels on its IPTV package.
French news network France 24 has been added to Italy’s DTT platform.
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Barbara Williams
Senior VP of Programming and Production
CanWest MediaWorks
Canada’s largest media company, CanWest owns two broadcast stations, Global Television, and CH, which is being rebranded this fall as E!, as well as eight specialty cable and satellite stations, that are one of the market’s largest buyers of U.S. product. At the L.A. Screenings, Barbara William’s team acquired 15 new U.S. shows for its channels and a number of which will bow on the recently announced broadcast schedules. Global’s fall schedule will include four of those rookie shows — Journeyman, Cane, Back to You and Life — while E!’s new U.S. shows include K-Ville, Bionic Woman, Women’s Murder Club and Viva Laughlin. Barbara Williams, who heads up all entertainment programming for CanWest’s broadcast and specialty channels, talked to Multichannel News International about the company’s programming strategies. An edited transcript follows:
Q: How would you describe your overall programming strategies at your main broadcast network, Global?
A: Global is the No. 2 network in Canada fighting hard to be No. 1. We focus very much on 18 to 49 and skew a little female.
Like other broadcasters our business is very dependent on primetime and in Canada that means primarily focusing on American hits that we can put on our primetime lineup.
We have Canadian content regulations, which are very important to our programming plans. They require that we are 60% Canadian content over the course of the schedule and in primetime between 6 p.m. and midnight we need to be 50% Canadian content. The other 50% tends to be almost entirely U.S. network programming.
Q: Do you acquire much from other countries besides the U.S.?
A: They don’t have much of a place on Global. Because U.S. product plays so well, we tend to focus on filling the slots we have for foreign programming with U.S. content.
But there is certainly a place for programming from all the English speaking territories on our specialty channels. There isn’t, however, an appetite here for dubbed or subtitled product.
Q: How important are formats?
A: We have done some but we are very selective. We had a huge success with the purchase of the U.S. version of Deal or No Deal and we did a short run of episodes of [a locally produced] Deal or No Deal Canada, which was tremendously successful.
Our other big success is with a daily version of Entertainment Tonight Canada, which is unique in the world. ET Canada is a format deal but we run it back to back, with [the U.S. version of] ET so we have what we call “the power hour of entertainment news.” We work very cooperatively with the ET team in L.A. on a daily basis to be sure that the two shows are complementary.
Q: What about your Canadian dramas?
A: We’ve had a great drama on the last couple of years, which is also broadcast in the U.S. on ABC Family, called Falcon Beach that has done very well in primetime and we are just launched a new series called the Best Years.
In many cases, we try to find an American broadcaster, generally in the cable world to help finance these series. We have a very tough time financing big time primetime properties independently and as the American channels face budget realities they are more interested in finding partners to finance their product.
I think more and more the Canadian industry is finding that it has a home and place in the U.S. For so long the product has moved north, so it is nice to see some of our product move south.
If we can work cooperatively and make programming that qualifies as Canadian content but also suits the studios needs in the States. That is a real win-win for everyone.
Q: Are you acquiring new media rights and have you put much of your content online?
A: It is a very evolving story. We are certainly in very active conversations with all the studios as we buy products about acquiring those ancillary rights. But to be honest, I don’t think there is a lot of clarity yet about what those rights are worth and how they should be exploited.
We have a very active Web site, globaltv.com, and we’ve experimented with a number of different properties to see what might work online. We put Survivor on our site [in the 2006-2007 season] and that was fairly successful experiment. The website offered viewers an opportunity to catch up on an episode they missed. We put game shows, like Deal or No Deal online and in the spring, we put Heroes up there when we were working to bring people back in to that show because it took a break.
So, we’ve tried a number of things. Honestly, it is not clear what the magic bullet is. But we are continuing to experiment.
Q: And what about mobile?
A: In the mobile space we have a new offering and recently launched an entertainment bit that is based on our ET Canada show that is called ETC to Go. It is modeled after the American version, which does an ET to Go in the U.S.
And, a major reason for our deciding to do the E! deal was not just building a television platform. It is an opportunity to work with them on content for Web, mobile and broadband where they have done quite a lot.
U.K. Broadcasters Plan ‘Project Kangaroo’
Major UK broadcasters are reportedly discussing a ground breaking plan dubbed Project Kangaroo, for a video download service that would allow users to access shows from BBC, Channel 4 and ITV, London’s Guardian reports. The broadcasters hope that by working together they can jumpstart the usage of broadband video, just as their joint digital terrestrial TV service, Freeview, dramatically boosted digital penetration.
For More…
Telenovelas Producers Eye Closer Ties to Advertisers
Latin soaps were one of the earliest programming genres to embrace product placement and today, as broadcasters increasingly embraced branded entertainment, telenovela makers are once again looking at establishing closer ties to advertisers, Video Age reports. Building plot lines around specific products can produce both new revenues and greater promotion for the shows, which can boost ratings, producers note. But for the “telenovela to truly succeed, its story must be strong enough [to attract viewers] without the promotion,” the article warns.
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European Cable’s Future
European cable is in the best shape in years, notes this lengthy survey of the industry by Julian Clover reports in Euromedia. Consolidation and hefty investments by private equity have strengthened the industry’s balance sheets and Manuel Cubero at Kabel Deutschland argues that “2006 was a marvelous year,” reflecting the views of a number of operators quotes in the feature. But David Mercer at Strategy Analytics notes that there is “still a question mark hanging over cable,” thanks to increased competition from telcos.
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Banking on China’s Information Economy
A new report from the World Bank takes a close look at China’s burgeoning information economy, which has already emerged as the world’s second largest broadband market. The study notes that information technologies have grown two to three times faster than China’s GDP over the last decade but adds that the country urgently needs to crack down on piracy and to reform its regulatory and legal system.
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