By Clive Whittingham 19-11-2013
Is the Ukrainian formats boom a flash in the pan or a genuinely growing, global content force?
It was former UK prime minister Gordon Brown, then Chancellor of the Exchequer, who said there would never be a return to economic “boom and bust.” And they said Gordon wasn’t good with the jokes.
Whether a bust always has to follow a boom is open to debate. In the international TV formats market we have previously seen China hailed as a new hot market for imports only to be overrun by copycats when competition for the real thing drove licence fees too high.
It’s a chastening tale for the Ukrainian market to heed as it basks in the glow of its current success, which has made it the third largest European territory for format adaptations.
I raised the issue of pitfalls to avoid during a panel at Kiev Media Week (KMW) in September, but the experts in town seemed to believe the Ukrainian boom is built on strong foundations.
Nicola Söderlund, founder and MD of Sparks Network and managing partner at distributor Eccho Rights, told me he didn’t see the Chinese example being repeated. “I don’t agree with the description of a bubble – the more competitive a market gets the bigger the risk is for copycats – I think it’s the opposite,” he says. “The more connected you are the harder it is to copy from somewhere else because you risk getting a bad reputation. China had a lot of copycats, hundreds, but now they also want to sell their shows, so they’re restricting this.
“If you want to sell, you cannot copy, so the more connected you are, the more the formats are protected.”
And boy, does Ukraine want to sell. The economic crash that crippled the Western world in 2008 – contrary to Brown’s bold prediction – hit the burgeoning Ukrainian television market especially hard. Not only did it suffer the same rapid decline in advertising revenue as neighbouring territories, but also a dramatic fall in the value of its currency.
Alexander Tkachenko, CEO of 1+1 Media, one of the country’s leading broadcast groups, said the whole thing wiped almost 50% off the value of the television market – a blow from which it is yet to recover. Not that this has dampened competition among broadcasters keen to get their hands on the next big international format. The Voice, X Factor, The Great Bake Off, Wife Swap – all the usual suspects are being fought over by broadcasters that, according to Tkachenko, are spending twice as much as they’re bringing in as a result.
He believes turning from an importer of formats into an exporter could be one way to climb out of the hole. “There is no big opportunity for the television market as it is,” he says. “We have to optimise or increase revenues, and one of the obvious ways for this is to start producing formats that we can sell abroad.”
If that’s successful then it will inevitably take away slots from international format firms peddling their wares in the country, but despite that it was a prospect welcomed by the visitors at KMW.
Far from worrying about decreasing sales opportunities, distributors are already eyeing the local production industry, upskilled by years of working on tried and tested international formats, to provide them with future hits to take out around the world.
Luci Burnley, senior VP for format sales and development at formats specialist Small World IFT, which is known for exporting Miss Country Girl from Romania, says: “That’s a natural progression you’d see anywhere in the world, so why not embrace it and look for the next hit?”
Cynthia Kennedy, formerly with BBC Worldwide and now sales director at Israel’s Keshet International, believes it makes the market ripe for mergers and acquisitions in the production space. “The business will evolve, so instead of just straight format licensing there will be a lot more coproductions happening,” she says. “There will eventually be a bit of a buying frenzy, in terms of production companies being picked up by global groups. A lot of eyes are on Ukraine for that.”
So it could be that the economic bust that’s already happened could actually, in time, protect the boom in the Ukrainian formats market. The deficit that led to the broadcasters’ difficulties means they need to find new revenue streams, such as selling formats abroad. That, in turn, means they need to maintain a good relationship with international firms, while also producing their own high-quality formats. And neither aim is served by trying to avoid high licence fees with cheap copycats.