Buyers rethink pricey U.S. shows


RELATED: Programming trends around the globe
MIPTV's environmental initiative gets serious
Buzzworthy shows at this year's market
CHART: Prices paid by foreign terrestrial stations for U.S. TV shows
Advertisers, producers rethinking marketing strategies
MIPTV Listings

Hollywood might be facing a crimp in its $6 billion international TV export business. Big-studio TV series are way too popular to fall out of favor with viewers around the world anytime soon, but the cost of producing them is spinning out of control stateside -- and the asking prices for them on the international market are beginning to be balked at.

Not to mention the fact that Americans are coming to Cannes with fewer new shows in the pipeline because of the strike. Fewer shows to license abroad probably translates into fewer overall dollars pocketed by the major studios. At least this year.

As international dealmakers descend on the Riviera resort for the annual MIPTV program market (April 7-11), they'll find that the fallout from the writers strike has wafted over the Atlantic: Not only are U.S. companies rethinking their outmoded development models for TV shows, but some big program buyers in Europe are reassessing their acquisition strategies for those shows.

One of Hollywood's biggest customers is the U.K., where buyers are openly questioning Hollywood's muscular role in local TV viewing. Other territories, including Germany, are looking internally for more affordable programming.

Although most Hollywood executives are cautious when speculating about the future health of U.S. TV content, all agree they must face the fact that programming has become just too expensive to create under the current development models.

"We cannot continue down the same financially devastating path that we have been on since pilots went up to $1 million (we are now in the age of the $15 million pilot)," says Marion Edwards, president of international television at 20th Century Fox TV Distribution. "It's sad and unbelievable how costs have gone out of control. So you will certainly see different things being tried to counter the trend."

Armando Nunez, president of CBS Paramount Television International, adds: "Everybody is looking at the model and how it is going to evolve. But it's doubtful if it's going to change all at once. It's an evolution, and there are a lot of different discussions. But notwithstanding that, we still have a development process that has a traditional component, and that is going on as we speak. And so, we will have projects to talk about in May for the international upfronts."

But while studio distribution executives and their big buyers assess the fallout of the strike and production executives continue to seek economic solid ground, the reality is that things are taking their own course overseas.

A surge in the production of local reality and factual shows in the U.K. (think ITV's "Gladiators" and Sky One's "Ross Kemp in Afghanistan") as well as a focus on big-budget domestic drama production for the international market (think "The Colour of Magic" and "Hogfather") potentially spell trouble for Hollywood studios.

"We've been very lucky really," says Sky One head Richard Woolfe, who adds that the strike in the U.S. has opened up new slots for Sky's own commissioned fare. "We have had a chance to fast-track some big commissions like 'Gladiators' and a whole raft of other programming, which has been a useful exercise."

Channel 4, one of the biggest buyers of U.S. programming over the past 20 years, has announced a major strategic reshuffling that will see it foster British creative talent with some of the cash it used to spend on American fare.

"American studio programming is just not cost-effective for us anymore," says Channel 4 director of television Kevin Lygo, who in March said the broadcaster would slash U.S. spending by 20% over five years. "In earlier years, it was cheap enough, and there weren't that many people buying it. ... But in recent years, the prices have shot up so high that we simply couldn't afford the shows that we wanted."

Lygo points to "Lost" as an example, since Channel 4 failed to renew when rival Sky One bid over 1 million euros ($2 million) per episode for Seasons 3 and 4.

At the same time, the BBC is under scrutiny over its own public service credentials and will not likely be signing massive checks for acquired American fare.

Similarly, Germany's commercial channels, which in the past few years turned their primetime programming over entirely to U.S. fare, are now investing more in-house.

Berlin-based Sat.1 just unveiled a new schedule that includes several local-language drama series, among them "Charite -- Berlin Mitte," a German take on "Grey's Anatomy," about an ambitious female surgeon-in-training at Germany's top hospital; and "Dr. Med Molly," a female version of "House," starring Sabine Orleans as a plus-sized neurologist with an acid tongue.

Studio Hamburg managing director Sytze Van Der Laan believes German networks are returning to local fare because they see the dangers of becoming too dependent on Hollywood.

"We've been here before, when the big commercial channels were only showing U.S. series and then, suddenly, the supply dried up and the new shows didn't work," Van Der Laan recalls.

Back in Hollywood, executives are focusing on what needs to be done right now to get the wheels turning again, rather than dwell on perceived threats to what is, after all, some of the best TV product in the world.

"The good news is that the strike has been resolved and we can talk now, as opposed to speculate, about where we are in the development process and about episode counts for May," Nunez says.

On this, Edwards fully agrees, pointing to the fact that MIP will likely reflect a rebound after the strike, with plenty of chatter about launch schedules and what pilots are taking shape and what shows are generating buzz in the walk up to the L.A. Screenings.

"I think the strike gives impetus to the idea of producing your own shows and to becoming less reliant on U.S. programming, and we will be attempting to assess the long-term impact of the stoppage," Edwards notes. "Just when U.S. series were clawing their way back into the markets, they lost their slots because there were no new episodes coming through."

MIP will also see much more going on this year than upper-level discussions about the state of the U.S. industry. A surge in the presence of advertisers at the market is anticipated, and a range of issues will be discussed, including VOD rights, the increasing number of inter-national co-productions and the growth of the mobile sector.

But by market's end, when the last limousines head to the Nice airport, the hot-button question will still be the ability of the U.S. superproducers to keep the world's TV auds on the edge of their seats -- and at a price everybody can afford.

Scott Roxborough in Cologne, Germany, contributed to this report. Mimi Turner reported from
London. Steve Brennan reported from Los Angeles.