Suppliers try to lasso BRIC TV biz
Opportunities outweigh obstaclesCall it fanciful, but when it comes to the entertainment industry's drive into the world's emerging markets, one can't help thinking of the wagon train pioneers who focused more on the new life that lay at the end of their odyssey than on the dangers along the way.
The unlikely comparison came to mind this week at a conference at UCLA that focused on the opportunities for the U.S. television industry in the so-called BRIC countries -- Brazil, Russia, India and China -- all of which present U.S. suppliers with vast numbers of new viewers and business opportunities.
The event, organized by the Association of Media & Entertainment Council, also saw the presentation of a new white paper from AMEC on the BRIC TV industries. The statistics are nothing short of astounding in terms of the ventures that will develop in the coming decades in these emerging economies.
A panel of experts talked about the realities of doing business in these countries for U.S. media companies -- it wasn't entirely a rosy picture. But it wasn't until veteran Los Angeles-based independent TV producer Todd Levitt stood up in the audience to point out some less-talked-about hazards awaiting independents and majors that some of the real challenges came to light.
"The old days are long gone, and doing business now internationally is all different," Levitt said. "You have cartels and monopolistic TV environments to deal with in some of these countries."
There was little disagreement from the panel, and we even heard one nightmare scenario out of Brazil of a locally based executive for a big tech company who has been kidnapped -- several times.
If you are doing business as a TV distributor or producer in Brazil, you most likely will deal with the giant Globo TV, Latin America's biggest producer and broadcaster with no fewer than 121 broadcast stations. Although it produces the bulk of its own content, there's great potential there for U.S. players.
For instance, the white paper points to the fact that there are emerging opportunities in the pay TV sector, where such U.S. series as "Lost," "House" and "Brothers & Sisters" have found a home and are raising ratings for their carriers.
There's also the challenge of taking revenue out of many of these countries and repatriating it, said Camila Araujo, a partner in the Araujo e Policastro law firm. Russia and China are particularly challenging in that regard and even have given rise to the term "captive capital."
China, as has been well documented, presents Western TV pioneers with a miasma of rules and regulations, not the least of which is its insistence on control of content, making it a constant guessing game as to what will pass muster and what won't.
Even some of Disney's most popular TV series can't be shown in China, though that might have less to do with protecting citizens from dubious content as it has with bold-faced opportunism. Notes the white paper: "An example of (the State Administration of Radio Film and Television's) protectionist role is its decision to ban foreign cartoons" from 5 to 9 in the evening. "The net result has been an increase in domestic animation production."
Attorney Carole Handler, a partner at Wildman Harrold, said that "interpreting SARFT and its rules has become a cottage industry." She pointed out that "Lost" is acceptable but "Desperate Housewives" in a no-no.
Only India seems to emerge as the BRIC country that poses fewer of the hazards and frustrations encountered regularly in China, Brazil and Russia. David Tenzer, a veteran TV agent and now a leading entertainment industry attorney in Los Angeles, said that among the advantages of doing business in India is a legal system similar to our own, a business-friendly atmosphere and the fact that English is widely spoken.
But it's still a cultural leap for Americans. "Don't go to India and try to teach them how it works or they will teach you a lesson," he said.
The potential problems for U.S. business looking to expand into the BRIC countries are myriad. That certainly was the message one took from this week's conference.
But the reality is that the opportunities are just too vast to walk away from because of what Tenzer described as "some challenges."