CEE’s thirst for formats

As broadcasters in Central and Eastern Europe (CEE) change their approach to imported programming, distributors heading to Natpe Budapest this week are looking at updating their selling strategies, writes Nico Franks.

Finished shows are still in demand among broadcasters in Central and Eastern Europe (CEE), but given the higher demand for local programming, business is thriving for format distributors.

And according to some major distributors, as they pack for this week’s Natpe Budapest market, CEE networks are now acquiring formats much more readily than they are finished programmes, as levels of local production continue to grow.

Sebastian Burkhardt, head of sales at format vendor Banijay International, naturally welcomes what he sees as a “healthy demand” for original production in CEE. “It’s not a unified region. Each country has different demands and complexities. But broadcasters in CEE seem to be going through a lot of formats, with lots of competition between channels in the market,” he says.

CEE buyers are “very open” to trying formats that originate from Germany, he adds, with one example being ProSieben’s well-travelled gameshow format Beat Your Host, which airs on 1+1 in Ukraine, Nova TV in Bulgaria, PRVA TV in Serbia and RTL in Croatia. Despite the arrival of big UK/US formats like Got Talent and X Factor, the general feeling among broadcasters in CEE is that US and UK formats aren’t the only ones worth paying attention to. Mexican dance format Bailando por un Sueño (Dancing for a Dream) has done well in Ukraine, Slovakia and Romania, for example.

With schedules in CEE now opening up to original productions, it’s not just primetime slots that Banijay is looking at more closely. “The market has matured and is now much more sophisticated in terms of original programming. So it’s a natural evolution that whole schedules are now opening up to local programming,” Burkhardt says.

He adds that any distributor focusing solely on selling finished programmes into CEE is “missing out” on local broadcasters’ current thirst for formats.

Selling finished programming has never been a major part of Banijay International’s focus. However, even distributors with catalogues that contain both formats and finished programmes support Burkhardt’s belief that the tables have turned.

Jennifer Ebell, senior sales exec for CEE, Israel, Greece, Cyprus and Turkey at UK distributor ITV Studios Global Entertainment (ITVSGE), points to a 70/30 split in favour of formats over finished shows in the region. The reason for this, she says, is that “quite a few channels in CEE got locked into US studio deals in 2008. After those finished, acquisition budgets were down due to the recession.”

This left channels with a choice between expensive imports or cheaper, lower quality imports. As a compromise, many broadcasters opted to buy formats to provide more localised programming.

Ebell highlights Russia, Ukraine, Turkey and Hungary as markets where broadcasters are “always willing” to try out new formats. And with ITVSGE on the brink of clinching (and announcing) a format deal in a CEE territory that typically airs less ambitious productions, Ebell says: “Even the smaller territories are beginning to take on bigger formats.”

Beatrice Rossmanith, sales manager at Passion Distribution, a UK company that has done business mostly in finished series, says she has yet to see a fall in demand for its completed programming. However, she says this hasn’t been the case for other distributors, which are suffering because “some slots [in CEE] aren’t buying as much as before.”

And now that there’s an emphasis on local production with local characters and hosts, some distributors are increasingly factoring formats into their strategies. Passion, for one, is now in the process of diversifying its client base and placing its focus on formats, looking to acquire new shows with an eye on lucrative licensing deals in a number of territories, including Russia.

“Russia is such a major market and we want to be able to provide that market with what it needs,” Rossmanith says. “We want to acquire more formats to be able to target primetime slots in which there is a demand for local production.”

With timeslip drama Life on Mars set for a Russian remake, format sales for BBC Worldwide (BBCWW) are on the up, according to Elin Thomas, VP of format licensing for EMEA. Thomas is noticing a “huge” increase in demand for long-running scripted shows in CEE. And Stephen Driscoll, VP of international sales at All3Media, forecasts the trend for formats will continue unabated in the future. “The format market in CEE will grow together with its economies, while the demand for finished programmes won’t.”

However, many other distributors contest this prediction, believing that imports of original productions from the West will always be in high demand at CEE broadcasters.

As Driscoll says, even the big CEE channels can’t afford to have their schedules entirely made up of locally produced content. This may be the case, but it is clear to see a shift has occurred in terms of where finished programming is being placed in CEE schedules.

“As in all territories, the main broadcasters in CEE are competing in the cable market with their secondary channels. This means finished foreign programmes are moving on to those channels, because broadcasters don’t have the budgets to produce their own content on both sides,” Driscoll says.

Therefore, distributors may have to get used to seeing their shows appear on smaller CEE channels in the future – the flipside to benefiting from the number of slots opening up as a result of digital growth.

“With lots of new channels opening there are a lot more opportunities in countries that weren’t buying much content before. Cable channels are a positive thing for us, as we have lots of factual entertainment, which is a broad genre,” Passion’s Rossmanith says.

Heike Renner, BBCWW’s territory manager for CEE and CIS, believes that content sold into the area is still well-received and by no means faltering as a result of the rise in original production. “CEE is still very viable for us as a growing market. There has been an increase in original production but we have got a huge number of different titles across drama and factual that still work on terrestrial, public TV, pay-TV and the niche channels,” she says.

Banijay’s Burkhardt, meanwhile, hints that what we are seeing in CEE is merely an example of the region catching up with the more mature Western European markets, where there is a “healthy” mix of acquired shows and original production.

Andrea Roskosch, who oversees Eastern European sales at ZDF Enterprises (ZDFE), says although “everybody is talking about” sales of formats overtaking completed shows due to the localised factor, ZDFE’s sales of finished programmes continue to grow.

Danish drama The Killing, for example, currently airs in primetime on Russian public broadcaster Channel One, perhaps because Scandinavian drama feels more local to CEE audiences than US fare. Dramas with high production values and universal themes continue to find mainstream success, as proven by the number of international pick-ups for BBCWW’s Sherlock, including TV7 in Bulgaria.

Moreover, the impact of CEE coming of age has also raised interest in the potential for video-on-demand (VoD) services in the region becoming viable revenue streams for distributors with content to sell. However, pulses have not exactly been set racing by the current VoD systems in place, with Burkhardt saying that over-the-top (OTT) systems in CEE are “not as developed or interesting revenue-wise as in other markets.”

Nevertheless, some distributors have done deals to secure ancillary income in CEE. All3Media has an agreement with Tvigle in Russia, with another in the pipeline. “It’s a new business model,” Driscoll says, “so the discussions about rights and exploitation take longer and the deals can take months to complete.”

Passion, meanwhile, has a dedicated sales manager to run the digital side of its business, which it says is currently “growing as an additional source of revenue.” Rossmanith says that CEE in particular is “a very important territory” digitally for Passion, which is developing relationships with online portals such as Central European Media Enterprises’ VoD service Voyo and Onet.pl in Poland.

BBCWW has also done a deal in Russia with Tvigle and is currently coming to an agreement with a similar service in Poland. But Renner is less enthusiastic about the long-term implications of OTT. “My opinion is that it will take a long time before OTT services overtake TV completely. There’s still a very traditional TV audience out there and they are not ready to exchange one for the other.”

Ebell, at ITVSGE, also believes the OTT systems are currently in their “infancy,” saying: “A lot of the deals we’re doing now, because these platforms are still launching, are just for one year. We’re seeing how they go. If they get more subscribers, then we’ll think about renewing agreements next year.”

If the rate at which other parts of CEE’s broadcasting infrastructure are growing is anything to go by, these distributors will not have to wait long until CEE’s VoD services come up to speed with others elsewhere.