Commentary: MIPCOM sweats a stock meltdown, again
Similarities and differences with 1987's Black MondayCANNES -- I remember the day well.
A stream of impeccably tailored but harried-looking British and American execs exiting their MIPCOM exhibition booths in the Palais mid-afternoon and making a beeline for the Majestic Hotel. During the normal TV trade shows that have been unspooling in Cannes since the 1960s, folks would man their stands in the convention hall till 6 p.m. or so before ambling over to the Majestic to drink until dinnertime.
But that sunny day in October 1987, the 19th I believe, it was all about the Dow, which plummeted an unprecedented 23%, with the S&P down 20%. Despite the sunshine on the French Riviera, it would be forever remembered here, too, as Black Monday.
Execs rushed to the Majestic because it was one of the few hotels that had any news in English, which consisted of a primitive version of CNN International. There was no Fox, no CNBC, no MSNBC, no BBC World, no Sky News and very few satellite-delivered foreign channels of any kind in mainland Europe. And the biggest difference from this go-round of roiling markets and bank bailouts: We all mostly were in the dark, with no cell phones or Internet connections.
"Everybody simply had to up and leave the convention hall, buy a day-old newspaper and place a hotel-authorized call to their broker," remembered one grizzled veteran of Black Monday as lived through in Cannes. Some U.S. execs actually got on planes and returned home.
That period was very different from our media-saturated, digitally enhanced world, as Michael Eisner put it in a keynote here. He pointed out that even time, distance and language are disappearing as boundaries to communication.
In any case, 1987's edition of the program sales bazaar was not upbeat, even though most people attending, like myself, did not own stocks or bonds or even know what a 401(k) was. It was the big bosses at the Hollywood studios or the ITV stations in the U.K. and, I assume, Germany's Leo Kirch and Italy's Silvio Berlusconi who personally had the most to lose.
Not as many media companies were publicly quoted either, whereas in the current debacle almost all media conglomerates have seen their stocks take a hit.
It was unclear that week, as this one, what the medium-term effects on the entertainment biz would be, if any: Other than the top-tier execs whose own portfolios were affected or whose companies already were fragile financially, most folks on the Croisette then said the same thing I heard repeatedly this week: "It's TV. We're recession-proof. People will stay at home and watch programming. We're going to be fine."
In any case, 21 years ago Yanks largely were obsessed about another issue, called then as now "new media" -- though then it meant cable, which was starting to erode broadcast network ratings -- and by the presumptuous Rupert Murdoch, who had had the gall to launch a fourth broadcast net in the States and a satellite service in the U.K.
In Continental Europe, the obsession was with the concept of American cultural imperialism and whether those shoulder pads and shallow relationships on Yank soaps would somehow, in seducing its viewers, sully their souls as well as take away slots from local Euro fare.
I recollect all this because so much has visibly changed since that downturn and, well, some other things haven't.
First of all, I imagine the entire U.S. TV export business, driven in those days by big packages of Hollywood movies and by "Dallas" and "Dynasty," was worth less than $1 billion. It's now valued at more than $10 billion a year. Unlike in the '80s, "international" matters now a lot more in terms of production finance, ideas, outlets and eventual profit.
Think of it as an interconnected grid of multiplatforms, shifting windows and countless programs and formats whose production values often are as high and storytelling as original in Lithuania, Israel or India as in the U.S. or Western Europe.
So what will be different in the TV biz in the wake of the current sell-offs from New York to Tokyo -- on Thursday the Nikkei plunged more than it did in 1987 -- and the series of bank bailouts?
This MIPCOM, under glorious skies and record attendance, absorbed the shock with little visible effect: The Ukrainians and Germans threw parties, program suppliers wined and dined their clients, transactions got sealed, photos got snapped, and a Hungarian escape artist broke the world record for holding his breath underwater -- in a makeshift tank at the Majestic, no less.
Should we be holding ours?
The TV advertising markets, most pundits here suggested, certainly are going to take a hit. Long-lasting production and program acquisition budgets could be impacted, though American sellers are quick to point out that acquired programming also can be cost-effective for a broadcaster who typically spends several times as much to make his own local equivalent.
More significant, perhaps, a lot of moolah has recently been erased from the value of media companies, not just in the U.S. but in Western Europe and Asia.
Eisner suggested that current multiples were so attractive for most of the Hollywood conglomerates, including his alma mater Disney, that they were "a steal."
They also might be a steal, as it were, for each other, with chattering here on the Croisette about what company might be in play once credit markets loosen up -- or whether a Google might just find one or another of these old-media content providers that much more appetizing.