Territory reports

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AUSTRALIA

SYDNEY -- Australian television is highly competitive at the best of times, but its ferocity has been taken up a notch this year, with Seven Network in a position to challenge longtime market leader Nine Network for the No. 1 ratings spot. After enjoying several years of strong audience growth, the network won the first five weeks of the TV ratings year thanks to a diet of top-rated U.S. dramas from Buena Vista Television, including "Desperate Housewives," "Grey's Anatomy" and "Ugly Betty," as well as its homegrown light entertainment show "Dancing With the Stars." Most observers believe that, with the rights to the Australian Football League competition going to Seven, Ten and paynet Foxtel (the nation's largest paycaster) this year -- and with Nine losing out -- Seven will finish the year ahead of Nine.

At the same time, the youth-targeted Ten Network has widened its core viewership to include the 18-49 demographic, with an output deal with 20th Century Fox underpinning the new schedule beginning in September. Indeed, the industry is waiting until next month's L.A. Screenings to see what new programming Ten will get from Fox and if it will have the depth of programming to increase its competition with Seven, which leads in the 18-49 demo.

While analysts are generally confident about Seven's schedule, they remain uncertain if Nine will remain competitive throughout the year. Says Goldman Sachs JBWere media analyst Christian Guerra: "Although we believe Nine will withstand the loss of the AFL, we remain cognizant that five of Nine's top 2007 U.S. series prospects have already been canceled midseason. ... Nine may struggle with its core schedule during 2007."

On a brighter note, the free-to-air sector will see the introduction this year of high-definition multichanneling, allowed for the first time as part of its digital TV broadcasts.

And while competition between the commercial networks intensifies, the pay-TV sector is enjoying unprecedented growth in both subscriber numbers and viewing shares. At the pay industry's annual ASTRA Conference last month, Foxtel CEO Kim Williams reported 10% subscriber growth in 2006; that number is expected to remain the same this year, with approximately 26.5% of Australian households (close to 2 million) now subscribing to a pay-TV service.

That's being driven by exclusive programming like Michael Parkinson's interview with Australian cricket great Shane Warne, "Parkinson: The Shane Warne Interview," which set records in January as the top-rated pay-TV program of all time.

Williams also reported that in Sydney, Australia's largest TV market, Foxtel is regularly the most-watched TV service, with a 24.5% share, compared to Seven's 22% and Nine's 19.9%. Nationally, pay television gets the second-highest ratings behind Seven. Viewing in pay-TV homes is close to 60%, according to Nine Network and Foxtel shareholder -- as well as Australia's richest man -- James Packer.

"Free-to-air TV will continue to be the most-watched medium in Australia for many years to come," Packer says, "(but) our stake in the pay-TV industry is a great asset with a tremendous future."

-- report by Pip Bulbeck

CANADA

TORONTO -- Canada's broadcast industry continues to consolidate as the country's few remaining players chase footloose digital TV viewers.

In the latest Canadian megadeal, CanWest Global Communications Corp. bid $1.98 billion for domestic broadcaster Alliance Atlantis Communications Inc., which owns half of the "CSI: Crime Scene Investigation" TV franchise. The deal stands to pry open the Canadian market to increased foreign investment as the takeover of AAC will be mostly financed by Wall Street giant Goldman Sachs & Co.

The AAC deal followed on the heels of media giant CTVglobemedia Inc.'s acquisition of rival broadcaster Chum Ltd. for $1.4 billion, a deal that consolidates free, over-the-air and cable channels in the region.

Meanwhile, radio and TV broadcaster Astral Media Inc., after losing the corporate fight for AAC and Chum, responded by proposing the takeover of Standard Broadcasting, Canada's largest radio station operator, for $1.2 billion.

To secure regulatory approval for the latest industry consolidation, the acquiring broadcasters plan to tell the Canadian Radio-television and Telecommunications Commission that it needs to be large enough to fend off threats from new digital technology, including streaming Internet broadcasts and personal video recorders.

Canadian cable and broadcast TV operators have increasingly set themselves up on emerging digital media platforms because they see YouTube and other video Web sites slowly but surely luring away viewers and ad dollars.

In the latest move, last month, Chum signed a content distribution deal with upstart Web TV player Joost.

To deal with new digital competition, traditional broadcasters also recently asked the CRTC to mandate that domestic cable and satellite operators must pay to broadcast over-the-air TV signals, which is what already occurs with specialty channels.

The fee-for-carriage proposal is meant in part to subsidize the conversion of Canadian TV signals to HD. But cable giants shot back, saying that conventional Canadian broadcasters were looking for a cash grab as they racked up big profits from airing U.S. primetime series.

Elsewhere, international formats succeeding on Canadian television include "Deal or No Deal Canada," a five-episode run that Global Television produced in partnership with Endemol USA.

"Deal's" first episode bowed immediately after the Global Television telecast of Super Bowl XLI on Feb. 4, and the final episode attracted 2.7 million viewers. TV series that draw more than 2 million are typically regarded as popular primetime hits here.

-- report by Etan Vlessing

CHINA

BEIJING -- The imminent 2008 Beijing Olympics has piqued China's interest and is starting to boost ratings for CCTV-5, the state broadcaster's sports channel, which, in turn, is shuffling the channel rankings. But it is politics -- as usual -- that is the real force behind the small screen in the Middle Kingdom.

Hunan Satellite TV -- creator of the "American Idol" knockoff "Supergirls," which topped the ratings in 2005 and '06 -- dropped two places to No. 6 in last year's overall channel rankings from CCTV-Sofres Media, a research joint venture between the flagship broadcaster and Taylor Nelson Sofres.

TV dramas still dominate, but communist watchdogs are impatient with extended singing competitions whose runs they say are stretched to capitalize on profits from text-message voting.

The ratings for "Supergirls," CCTV-2's copycat "Dream China" and Shanghai TV's "My Hero" have peaked for now, according to China Media Monitor managing director Anke Redl, yet the State Administration of Radio, Film and Television recently capped future seasons to 10 weeks.

In addition, industry observers say the cap is a result of officials'concerns about Western influence and the fact that voting for pop stars is a prickly practice in a one-party nation whose citizens don't elect their own president.

Meanwhile, CCTV-5, the nation's leading sports channel, rose to No. 2 on a 35.8% jump in viewership from 2005, driven by its exclusive broadcast of the 2006 World Cup, Redl says.

At press time, the license renewal for ESPN and Star Sports -- known collectively as ESS in China, a joint-venture package offering from their respective owners, the Walt Disney Co. and News Corp. -- was in danger because of an earlier News Corp. misstep with SARFT, sources say.

Elsewhere, a bright spot for big-screen news on China's small screen came with NBC Universal's announcement that it had licensed a localized "Access Hollywood" to Inner Mongolian Satellite TV.

At the recent Hong Kong Filmart, CCTV launched its first co-production with TVB, a 60-part drama about the development of China's automotive industry called "Drive of Life." Proving how politics play into programming decisions, the show is set to premiere in July to mark the 10th anniversary of Hong Kong's return to the motherland from Britain.

-- report by Jonathan Landreth


FRANCE

PARIS -- Aspiring pop stars, presidential candidates and stateside crime dramas are all the rage on French television this year.

As the presidential elections approach, political programs have multiplied on the small screen as front-runners Nicolas Sarkozy, Segolene Royal and middleman Francois Bayrou share their views with the French public. TF1 has been breaking records with its increasingly popular show "I Have a Question to Ask You"; Sarkozy's appearance on the show grabbed the attention of 8.2 million viewers and Royal's an even more impressive 8.9 million.

French viewers also have been tuning into France 2's "For You to Judge," France 3's "French People, Vote for Me!" France 5's "In (2) Words" and M6's already popular "5 Years With ..." and the upcoming "Elysee 2007: The Debate."

Outside the political realm, the French have been actively dissecting "CSI: Crime Scene Investigation," which usually gives leading broadcaster TF1 the top slot on Wednesday nights. The network's "CSI"-inspired French fiction series "RIS: Police scientifique" also has been dominating the market on Thursdays. TF1's medical shows are very popular, with "Grey's Anatomy" experiencing a nice August-October run and the recently aired "House" already making its mark in the ratings. TF1 will air the first season of the superhero drama "Heroes," already a cult hit in the territory thanks to Internet downloading, in September.

Viewers are certainly not missing in action for fellow U.S. export "Without a Trace," which has given France 2 strong Monday night numbers, with more than 30% of the market share in recent weeks.

Similarly, M6's "La Nouvelle Star," France's version of "American Idol," has been breaking audience records on the channel -- millions of viewers have been tuning in each Wednesday, making the network No. 1 for the evening among viewers under age 35.

Broadcasting changes following the merger of France's two major digital satellite platforms Canal Plus and rival TPS, jointly owned by private broadcasters TF1 and M6, hasn't strongly affected programming, but the move, combined with the country's plan to completely digitize the nation's televisions by 2011, will certainly change small-screen politics in the coming months. French broadcasting regulator Conseil Superieur de l'Audiovisuel recently extended commercial analog broadcasting rights to TF1 and M6 until 2012 and has imposed obligations on French TV manufacturers and retailers so that consumer equipment matches broadcasting plans for the move to digital terrestrial television. The official analog-to-digital shift will start March 31, 2008, and will be in effect by Nov. 30, 2011.

-- report by Rebecca Leffler

GERMANY

COLOGNE -- Last year closed with a German TV megadeal: the $4 billion takeover of leading commercial broadcaster ProSiebenSat.1 by equity firms KKR and Permira. This year will see KKR/Permira try to merge the German giant with pan-European broadcaster SBS.

If Euro watchdogs approve, the result will be the first real competition to Bertelsmann's RTL Group.

Permira is already laying plans for a vertically integrated media group, having bid for Germany's leading independent TV production house MME Moviement, which it wants to fuse with its U.K. production subsidiary All3Media.

The model for the new group is RTL and its formats powerhouse FremantleMedia, creator of "American Idol" and "Who Wants to Be a Millionaire."

But one area where Permira et al. won't be copying RTL, or any of the other German majors, is in the drama department.

While U.S. series such as "CSI: Miami," "Desperate Housewives" and "House" continue to pull in German audiences, homegrown drama isn't measuring up.

RTL's try at a "CSI: Crime Scene Investigation"-style procedural, "Post Mortem," started strong but has since been put on life support, dropping below 3 million viewers per episode. The season finale returned a respectable 3.4 million viewers, but RTL still hasn't committed to a second season.

Compare that total to the 5.8 million/18.4% share RTL pulls in with "House," and it's clear that U.S. series have a bright future on German television.

It's a similar story at Berlin-based competitor Sat.1, which has had a series of ambitious but spectacularly unsuccessful drama productions before scoring with "GSG9," a high-octane cop show in the style of "The Unit," which nabbed 3.3 million viewers for a 10% market share.

But the only area where homegrown product truly trumps imported series is the miniseries format. ARD's historic two-parter "March of Millions," the story of the flight of German refugees from the Russian army at the end of World War II, drew 11.2 million viewers for a 29.5% share.

That leads many to suggest that instead of trying to copy Hollywood, Germany should have the confidence to tell its own stories in its own way.
 
-- report by Scott Roxborough


JAPAN

TOKYO -- The star-driven drama -- that perennial of the Japanese small-screen entertainment world -- remains the primary attraction for viewers here, though the public no longer expects to only see a title on television.

The blurring of the lines separating different media has continued apace over the last 12 months and, according to analysts here, that trend looks set to continue, with tales that start out as novels or manga snapped up by producers and turned into drama series. And that often is merely a step on the path to a full-blown feature-length film.

"Hana Yori Dango" (Boys Before Flowers) is presently the top-ranked drama on Japanese television, according to Video Research Ltd., with the March 2 edition of the Tokyo Broadcasting System show attracting 22.3% of viewers during its 10 p.m. slot, with some 3.7 million viewers in the Tokyo region alone.

Now in its second season, "Hana" stars Mao Inoue and Jun Matsumoto, the latter of whom is a classic example of how Japanese entertainers are required to spread across genres. At 24, Matsumoto is a J-pop star with the band Arashi, hosts TV shows and has acted in both movies and on television.

"Dramas are popular at the moment, although that popularity is based on who is in them rather than who writes or directs them -- or even what they're about," says Philip Brasor, TV critic for the Japan Times newspaper. "Domestic movies are doing very well at the boxoffice here right now. Look at 'Tokyo Tower.' That started off as a hugely popular autobiographical novel by Lily Franky that has been turned into two television shows, and now they are working on the movie. They're milking it incessantly."

Finding a winning formula and sticking with it remains the way to go on Japan's quiz shows and light-entertainment programs, with the nation's army of celebrities and semicelebrities monopolizing the small screen and not giving the average Mr. and Mrs. Tanaka a shot at winning any of the prizes available on "Who Wants To Be a Millionaire" or any of the other game programs.

On the business side, the industry is awaiting the March 16 outcome of the trial of fallen Internet mogul Takafumi Horie, who launched a hostile takeover bid for Fuji Television Network Inc. in 2005 but was subsequently found guilty of accounting fraud. The court ruling will have implications for other companies that have earned millions from the Net and are perhaps eyeing struggling terrestrial TV stations.

-- report by Julian Ryall

SOUTH KOREA

LONDON -- After years of being stymied by bureaucratic squabbling in the government, South Korea finally appears to be heading toward the next generation of broadcasting platforms. Not only is IPTV coming, but the national telecoms are eyeing a whole host of cross-multimedia platforms.

Cable television took a solid decade from its rollout in 1994 to become a significant force in the media sector, but the telecoms have no intention of waiting so long for the latest wave of technology to crest. Fast, high-profile rollouts are the plan, as telecoms seek to combine telephony, Internet and broadcasting into one-stop services.

Spurring this change, the administration of President Roh Moo-hyun introduced legislation in December to create a new regulatory body responsible for all aspects of television, multi-media and telecommunications, called the Broadcasting and Telecommunications Committee. That legislation is still working its way through the National Assembly, but once passed, change should come quickly.

The other big shift in South Korean television is the ongoing march toward independent production houses. In the past, the country's massive free-to-air channels bought all rights to the programs they purchased from hundreds of tiny production companies. But now, production companies are growing larger (often with deep-pocketed, big-business partners), gaining some leverage over the terrestrial channels and demanding the international rights to their programming. Yellow Nine Entertainment, SSD and other independent companies are pushing budgets and production values to new heights in order to grab ratings, with SSD's 24-episode series "Legend" topping $40 million.

On the domestic programming front, MBC's huge hit "Jumong" (Prince of the Legend) finally went off the air at the beginning of March, with its 40.6 average rating making it the third-most-popular program this decade. With "Jumong" gone, broadcasters are desperate to find the next big thing; TV insiders are watching expectantly to see if the coming wave of big-budget programs can provide the next megahit.

Exports grew from $123.4 million in 2005 to $161.8 million in 2006; however, most industry insiders expect 2007 numbers to hold steady or possibly decline. With Asian markets already saturated with Korean content, exporters are increasingly looking to Europe, North America and South America for growth.

-- report by Mark Russell


SPAIN

MADRID -- Increasing segmentation of the TV market thanks to new broadcasters and notably stronger multichannels means the golden age for the Spanish terrestrial broadcasters is coming to an end.

Following last year's addition of two new national broadcasters -- Cuatro and La Sexta -- the old stalwarts saw their audience shares drop, with none registering more than a 20% share. Private TV channel Telecinco led the pack with 19.8%, with rival commercial broadcaster Antena 3 Television not far behind with 19.4%.

But for the first time, multichannel webs -- new digital platforms that encompass a plethora of channels -- combined snagged some 20.2% share, and digital terrestrial television saw its slice of the pie climb to 5.3%.

Faced with a scheduled 2010 analog blackout, market leaders Telecinco and Antena 3 have launched fledgling digital terrestrial channels. More than 4 million digital terrestrial decoders have been sold in Spain, and experts estimate that that number could more than double by the end of 2007.

Faced with so many new channels, the race for top content is on, and it is coinciding with a definite decline in homegrown series. Gone are the days when U.S. series like "Northern Exposure" were relegated to 1 a.m. slots.

U.S. series such as "CSI: Miami," "CSI: New York," "House," "Prison Break" and "Grey's Anatomy" consistently best local series such as "Los Simuladores," "Los Serrano" or "Los Hombres de Paco" on the free-to-air ratings.

Spanish broadcasters are closely following the proposed film law, which will continue to require that they invest 5% of their overall revenue in domestic film production but also will force them to act as co-producers on all projects -- rather than just 75% as it stands now. Private broadcasters also are waging a battle to limit pubcaster Television Espanola's advertising to nine minutes on the hour, rather than 12 minutes -- while simultaneously rebelling against advertising restrictions imposed on the private channels.

-- report by Pam Rolfe

UNITED KINGDOM

LONDON -- For lovers of American series, there has never been a better time to be a U.K. viewer, but huge price inflation and the renewed success of local fare could mean that the market for acquisitions is topping out.

Successful long-running series such as "Desperate Housewives" on Channel 4 and the "CSI: Crime Scene Investigation" franchise on RTL Group-owned Five continue to deliver, with new shows such as "Ugly Betty" on Channel 4 and E4 and "Heroes" on the Sci Fi Channel turning in strong performances, the latter giving the U.K. cable network its biggest audiences ever. Maturing shows like "Grey's Anatomy" have continued to please audiences on the LivingTV channel, while Season 3 of medical drama "House" on Five also is winning new audiences.

With the popularity of the aforementioned American series, it seems that the market for acquisitions is booming, but there are signs of slowing on the horizon. When the time came for Channel 4 to renew deals for Seasons 3 and 4 of "Housewives" and "Lost," such was the price inflation since they had been picked up during the L.A. Screenings that one had to be let go. "Lost" jumped ship to Sky One for a reported $2 million per episode, making it the most expensive acquisition deal to date.

Such a development is likely to spark doubts among network buyers here about whether investing in acquisitions pays off in the long term. And it could make them question the amount they invest in marketing, promoting and co-branding newly launched U.S. shows that could just as easily end up with another broadcaster in the next round of renewals.

Recent comments from ITV director of television Simon Shaps, Channel 4 director of television and content Kevin Lygo and even BBC director general Mark Thompson have suggested that at such prices, buyers of U.S. fare will be more cautious.

ITV, which is undergoing something of a creative renewal under Shaps and ITV executive chairman Michael Grade, has been having a successful run with homegrown fare -- like a recent series of Jane Austen adaptations that includes such individual films as "Northanger Abbey," "Mansfield Park" and "Persuasion," which would have cost the same amount as a top-flight acquisition.

"My friend Kevin Lygo said recently that Channel 4 had to rethink their strategy because it just wasn't sustainable to pay upward of £1 million per episode for a show," Shaps says. "The curiosity is that you could spend that amount of money to make your own original show."

-- report by Mimi Turner

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