German TV's big turnaround is full of promise
From formats to original dramas, country's TV market is backInt'l firms seek a piece of German TV ad pie
Say it quietly: German TV is back. After two years of cost-cutting and economic malaise, Germany's networks are again pulling out their commission checkbooks and bankrolling production at a rate not seen for years.
In addition to the format flood, including German versions of "Pop Idol," "X Factor," "Minute to Win It," "Farmer Wants a Wife," more original drama is being pushed hard. RTL has put in orders for three big primetime action series -- the long-running "Alarm for Cobra 11," martial arts-themed "Lasko" and "Countdown" -- and has renewed female-leaning hospital romancer "Doctor's Diaries." The Sat.1 crime drama "The Last Cop" is up for another season, as are Pro7's hit sitcoms "Stromberg" and "Pastewka."
"The German networks are producing pilots like crazy," German media journalist Thorsten Krages says. "U.S. series are still strong. I don't expect German networks to be dropping 'House' or 'The Mentalist' any time soon. But I'm more optimistic about German-made drama than I have been in a long time."
It's not just hourlong drama, either. Big-budget miniseries -- something of a German specialty -- got even bigger this year. Tele-Munchen Group pulled out the stops for its English-language, two-part adaptation of "Moby Dick." Berlin's TeamWorx upped the special effects on disaster pic "Volcano" and the action for terrorist drama "Mogadischu." "In the Face of the Crime," a 10-episode drama set among Russian Mafioso in Berlin, which was produced by Cologne's Typhoon for public broadcaster ARD, has been compared to "The Sopranos" for its depth and quality of storytelling.
Then there's "The Pillars of the Earth," the $40 million adaptation of the Ken Follett epic, produced by Munich-based Tandem Communications. "Pillars" has wowed viewers worldwide and, in its financing structure -- most of the production cash came from European broadcasters -- may point the way to a new model for producing high-end drama.
"More people are doing it, or trying to do it, focusing on this kind of international co-production," Tandem co-head Rola Bauer says. "More people are coming to the table, largely because of the economic realities. Broadcasters can no longer pay 100% of production financing as they used to."
Economic realities are also behind the resurgence of less ambitious German production. Advertising revenue at Germany's two biggest commercial networks, RTL Television and ProSiebenSat.1, grew a solid 7% in the first half to more than €4 billion ($5.4 billion), close to pre-recession levels. The downturn didn't hit the German economy as hard as its European neighbors and recovery here has been faster. Feeling flush again, Teutonic networks are pumping money back into development.
The economic crash had little effect on U.S. firms selling into Germany. During the downturn, RTL and ProSieben cut margins to the bone on local productions but continued to buy big from Hollywood. Between them, the two largest commercial broadcasters have first-look deals with all the major studios. Such U.S. series as "Two and a Half Men," "Cougar Town," "CSI: Miami" and "Criminal Minds" enjoy primetime pride of place on commercial networks across the dial.
The German hunger for U.S. feature films is even greater. Public broadcasters ARD and ZDF mostly shun American dramas and sitcoms but are as insatiable as their commercial competitors when it comes to Hollywood blockbusters.
In fact, German channels are having trouble satisfying the demand. The studios have trimmed their release slates and the recession has hit independent producers hard. There aren't enough top-tier features to go around.
"The majors are clearly producing less and there are fewer films on the indie market as well, at least films that we're interested in," says Rudiger Boss, head of acquisitions for the ProSiebenSat.1 group.
"In the Face of Crime"
ZDF Enterprises, the commercial arm of the German public broadcaster, has begun buying into features at script stage, something it never did in the past. ZDF is also securing pan-European rights on certain features, all in an effort to get the movies German viewers demand.
"The pressure at the moment is very high," ZDF Enterprises boss Alexander Coridass says. "You have to get in early because if you don't someone else will have come in and scooped them up."
All the big channels, whether commercial or public, are chasing the same product: Big, mainstream films with A-list casts. Even for the public broadcasters, art house films need not apply. On the series side, German broadcasters are also firmly in the mainstream. Crime franchises -- "CSI," "Criminal Minds," "NCIS" and "Law & Order" -- are the bread-and-butter. More ambitious material rarely gets through the door. Even "24," a major hit worldwide, failed to deliver in Germany. The final season of "24" aired on Kabel 1, a ProSieben-owned net and the third German channel to take a chance on Kiefer Sutherland's Jack Bauer. It didn't work.
"The German viewer doesn't embrace high-concept series. Series like 'Lost,' '24' or 'Damages' are a lot harder to place," Boss says. "But with other series it sometimes is a question of patience. We aired the first two seasons of 'Two and a Half Men' with no audience. Now it's the top sitcom on German TV."
U.S. drama is in no danger of being knocked off the air -- spin-offs "NCIS: Los Angeles" and "Criminal Minds: Suspect Behavior" were quickly snatched up for the German market. But increasingly, the big German nets are making their shows at home and on their own.
Instead of fighting the trend, the studios, and international production companies, have decided to join it. Sweden's Yellow Bird -- makers of "The Girl With the Dragon Tattoo" and "Wallander" -- set up a German production operation last year. So did Warner Bros., hiring former Pro7 executive Christian Asanger to develop a local-language catalog. French giant Banijay Entertainment swooped in to buy 50% of Cologne-based production house Brainpool, whose slate includes sitcoms "Stromberg" and "Pastewka" and hit formats "Beat Your Host" and "TV Total." Elizabeth Murdoch's Shine Group established a German beachhead with new offices in Munich and Cologne.
They're entering a crowded market. A long list of studios (Sony, Disney, NBC Universal) and production conglomerates (Endemol, Fremantle, Eyeworks, Granada, All3Media) have figured out that the way to work the German market is to think globally but produce locally.
Rights holders used to be satisfied just selling formats into Germany, letting homegrown firms do the production gruntwork. No longer.
"Producing our formats locally, we can insure the quality of the shows and protect the brands," says Axel Kuhn, head of Shine's German operations.
"We didn't have the rights to produce 'MasterChef' locally, for example, and the German version didn't work here," he says.
In addition to doing German versions of established Shine formats -- "The Animal in Me," "Minute to Win It," "Sex With Mom and Dad" -- Kuhn is also actively developing for Teutonic TV. This year, he says, half of Shine Germany's production slate will be original formats developed in house.
Having pockets deep enough to pay for development, or having access to a catalog of rights developed in other territories, has become essential for surviving in the German market.
"In times like these, where production budgets are being squeezed," Kuhn says, "it helps to be able to use the synergies of an international network to cut costs."
"We have to assume the pressure on budgets will continue; we aren't going to see a return to the figures we had a few years ago," adds Wolf Bauer, head of Grundy UFA, a Fremantle subsidiary and Germany's largest TV production house. "That's where being a large company has its advantages."
Meanwhile, the German pay TV market is also in shambles. News Corp. is throwing money at pay TV platform Sky Deutschland but so far with little to show for it. Sky still has just 2.5 million subscribers and continues to burn through cash. Sky will not break even this year, as initially forecast and new CEO Brian Sullivan has decided to stop publicizing subscriber and growth targets, realizing that any growth in German pay-TV is likely to be long and slow.
"Pay TV and digital channels have it hard because cable penetration is so high -- probably the highest in the world -- and the free TV comfort zone is so big," says Oliver Kreuter, who CBS International hired last year to run its new Munich-based German sales operation. "In most European territories, you have just a handful of analog free TV channels. But in Germany you have first- and second-tier public broadcasters, first- and second-tier private channels and even a third tier of channels. All in analog."
Given that competition, the prospect of a German pay TV market as lively and lucrative as those in the U.K. or France is still a distant dream.
But as long as there's so much money to be made in boring old free TV, the global players will continue to beat a path to Berlin, Munich and Cologne. With 40 million TV households, the strongest economy in Europe and enough buyers to keep prices high and commissions coming, Germany remains one of the best games in town.