TV biz seeks storm shelter

Cost-cutting dominates MIP dialogue as int'l market winds down

Torrential rains mirrored an unsettled marketplace as executives at MIPTV focused on cutting cost bases, re-engineering production models and reshaping genre mixes to keep the television business afloat.

As the market wound down Wednesday, attendees said business had been slow but steady despite delegate numbers decreasing 15% from a year ago to about 11,500, according to Reed Midem organizers.

"The market hasn't been as bad as everyone thought it would be; there is still a core of programming that needs to be bought," MGM president of worldwide television Gary Marenzi said, adding that while such markets as Hungary and Russia are "hurting," other Eastern European markets are doing better, and Australia, Italy and India are growing.

Marenzi said that where tough times call, MGM is offering "short-term relief in exchange for long-term commitment," but he added that such instances are rare. "If you're in a market where the currency is down and the advertising market is shattered, then yes, you are going to pay less and buy less, but that is only happening in a few places," he said.

Said CBS Paramount International Television president Armando Nunez: "Some buyers are trying to put pressure on us to lower prices. Well, they can try, but we aren't seeing any drop in sales. The cuts, at the moment at least, are coming from local production."

With advertising revenue expected to slump at least through year's end, production spending cuts have come to the fore, and producers are looking strategically at their processes to find savings.

"It's not about doing the production differently as much as it is about taking costs out of production management," said Lee Bartlett, managing director of ITV Global, adding that ITV's production unit has eliminated 10%-15% of costs by consolidating its back office and reducing paperwork.

Still, Martin Sorrell, CEO of global advertising agency WPP Group, told the industry during a blunt keynote Tuesday that it must wake up to very changed times.

"Production cost has gotten out of control, and it will have to come down," he said. "If you're in the car industry and the cost of steel keeps going up, you'd either have to use less of it or find an alternative to make your cars. It will be the same with the TV business: There have to be new models." (partialdiff)