MIPCOM 2006

On the eve of the annual market, executives are optimistic that 'multiple windows' will buoy an already-healthy international TV business.

Imagine you have a car to sell -- a good, well-built car with low mileage and no damage. It's the type of car that practically sells itself, and there is no shortage of potential buyers. Now, imagine you could sell that same car to, say, two or even three other buyers and get top dollar from each. Too good to be true, right?

Not so for those selling television shows in the international marketplace, where a proliferation of channels and program outlets in numerous territories -- primarily the U.K. -- has created an environment in which franchise dramas like NBC's "Law & Order" can be sold to multiple buyers simultaneously.

But the U.K. is not the only market allowing sellers to reap the benefits of multiple outlets. Fox's "Prison Break" airs on the Seven Network and Fox8 in Australia, and Fox's "24" airs on Canal Plus, TF1 and TF6 in France and on Canal Fox and Rede Globo in Brazil.

As buyers and sellers descend on Cannes for the annual international TV market MIPCOM, set to begin Sunday and conclude Oct. 13, many are singing the praises of sales possibilities that have arisen only during the past few years.

"We have seen a blossoming of multichannel opportunities across a number of territories, and for us, from a business perspective, it's fantastic," says Belinda Menendez, president of NBC Universal International Television Distribution.

The U.K. offers the most striking example of a territory in overdrive, from the standpoint of U.S. sellers, but some executives wonder when other well-developed TV markets will follow suit.

"We have always said that the U.K. is a wonderful model, with a strong satellite-delivered marketplace in addition to the networks -- networks that have all launched digital channels," says Marion Edwards, executive vp international TV at 20th Century Fox Television Distribution, which has inked multiple-outlet deals in the U.K., Latin America and Australia, among other markets. "There are a lot of channels now in the U.K.; that has not been the case so much in other territories, but we are seeing strength in Germany. There is real opportunity also in Italy, where Fox Italia is buying aggressively."

Warner Bros. International Television president Jeffrey Schlesinger likens the U.K. market to quasi-syndication.

"If you go back a while, there was usually sharing between (British Sky Broadcasting) and the terrestrials -- then there was a period of time when each said they wanted their own shows," he says. "Now, there's a kind of syndication across the family of channels and shows going between the cable networks and the terrestrials."

Edwards cautions program providers to be mindful of the risk in overexposing a show through too many outlets, despite the short-term financial gain. But Ted Riley, executive managing director of international content distribution at Alliance Atlantis Communications, notes that broadcasters are learning that such deals are not as risky as once suspected.

"Broadcasters are finding that there is very little drop-off in repeat viewing on second windows -- there's still enough freshness," he says. "We're getting well over 50% of the original license fee for the second windows."

Riley adds that the repeat value of CBS' "CSI: Crime Scene Investigation" franchise -- which still occupies previously inaccessible network primetime slots in such key markets as the U.K., Germany and France -- is as much a result of the shows' self-contained format as their quality. Alliance Atlantis offered an indication of that format's health in July, announcing that global second-window sales of the "CSI" franchise totaled $250 million.

As more networks launch digital sister channels, they require an increasing amount of exclusive content to define their brand values. Buyers also are seeking an extra bump on deals through digital rights, but that has created further complications for the already-complex international TV business.

"The real thing we are all struggling with and excited about is managing digital rights, assigning them to broadcasters and how the broadcaster is going to exploit them or how we utilize them for ourselves," Schlesinger says. "It's not worth a ton of money at the moment, but strategically, this is very important."

Cutthroat competition to buy the right show might be peaking, but Channel 4 acquisitions director Jeff Ford foresees a risk in that, "some channels are being panicked into overbuying. What you have to ask yourself is: Where are those shows going to play in the schedule? Some people are going to get that wrong and not see any return on their investment."

Acquisitions must deliver in terms of ratings, he adds -- otherwise, they don't work.

While it is mostly blue-chip shows such as the "CSI" and "Law & Order" franchises or breakouts such as ABC's "Desperate Housewives" and "Lost" that command $1 million-an-episode price tags, they are practically risk-free in terms of ratings.

"We have seen spikes for individual shows: We always got high prices for 'ER' or 'Friends,' and now we are getting high prices for 'Joey' and 'Invasion,'" Schlesinger says. "There are more shows going up into these categories, but probably no more now than two or three years ago. With the top shows, there's a lot of bidding and interest, and then the others are falling in at a lower level."

Still, the mood among buyers clearly is upbeat as MIPCOM approaches. Fueling the optimism is the fact that new and emerging markets for video-on-demand have become genuine revenue generators, rather than untried business opportunities.

"BSkyB's recently launched broadband movies-on-demand service has proved remarkably successful," Sky Networks managing director Dawn Airey says.

Similarly, German commercial broadcasting giant ProSiebenSat.1 has signed a slew of deals with the likes of Buena Vista International Television, Paramount and Sony Pictures Television International for content to fuel its VOD portal Maxdome. The service, launched July 27, allows viewers to buy movies on-demand or download episodes of such series as "Housewives" and "Lost" a week ahead of their free TV windows.

"Germany is the biggest broadband market in Europe, so it's an ideal territory to begin experimenting with new-media propositions," ProSieben CEO Guillaume de Posch says. "We believe it's essential to get involved early in many of these initiatives so that we can learn what, how and when consumers will view content over the Internet."

According to CBS Paramount International Television president Armando Nunez Jr., much similarity exists between what is happening among Europe's pay channels and the manner in which the U.S. TV market has matured during the past decade. He adds, though, that uncertainty remains about several major markets outside of the U.K. and Italy.

"Here's the reality: As the HBOs and Showtimes built up strong brands, not just through the strength of feature films but also with strong series such as (Showtime's) 'Weeds,' they built up a lot of brand value for the pay TV channels," Nunez says. "The same thing is starting to happen internationally, where you are seeing very strong movie channels and also a desire for strong original content."

MIPCOM thus promises to be a hub for an industry experiencing a boom. Although the complexity of deals in today's marketplace figures to make for fewer contracts signed during the confab, insiders agree that the level of activity should increase substantially compared with that of only a few years ago.

"At MIPCOM, our usual meetings will be taking place with our traditional broadcast customers, but there will also be discussions with new media -- and we are seeing new sets of clients coming from VOD and mobile," Nunez says. "We have a much bigger client base now than we did just a few years ago."

Steve Brennan reported from Los Angeles, and Mimi Turner reported from London.
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