Campaign Report - European Media - Digital winners and losers - With MTV and now Eurosport offering distinct regional services, will digital TV further hasten pan-European broadcasting’s demise?

These are unsettling times for pan-European television stations They’ve spent a decade struggling to create a market. Now they face another huge challenge - digital. Pan-European channels like MTV and Eurosport are essentially children of television’s first Big Bang, the explosion that introduced what now seems a modest level of multichannel television to Europe, via cable in some markets and direct-to-home satellite in others.

These are unsettling times for pan-European television stations

They’ve spent a decade struggling to create a market. Now they face

another huge challenge - digital. Pan-European channels like MTV and

Eurosport are essentially children of television’s first Big Bang, the

explosion that introduced what now seems a modest level of multichannel

television to Europe, via cable in some markets and direct-to-home

satellite in others.



Digital is Big Bang number two and it could make the first seem like a

very small firecracker in comparison. It brings with it a whole new set

of questions for international broadcasters.



As with digital now, the advent of satellite television a decade ago

filled a thousand conference halls with enthusiastic theorists - and the

most popular and persistent supposition was that we would see

international broadcasting boundaries utterly erased.



There would be a dozen or more massive pan-European channels, networks

for a United States of Europe. Everyone else - notably the previously

dominant national networks - would be left scrambling for crumbs. One of

the most misguided projects to take this as its guiding premise

originally involved both the BBC and ITV. Back then people still

believed that Britain made the best television in the world. So it would

be criminal to deprive Johnny Foreigner of the best of British, wouldn’t

it?



The embodiment of that assumption was called Superchannel. It was

heralded as the flagship of European broadcasting. Over the years it

changed hands many times, its programming mutating each time. Earlier

this year, it evolved into National Geographic Television. This is

hugely ironic: the future of European TV ending up as the moving picture

version of one of the oldest international print titles.



Over the last decade, theories have come and gone. The most persistent

has been that pan-European channels can successfully service niche areas

in which there’s a common international language like pop, sport or

children’s TV. Or news, perhaps.



Recently, though, even that theory has begun to look tired. Take MTV:

music as a common language? The Germans love techno, while the UK is

still stuck on the twangy guitars of indie. Younger viewers like to hear

presenters using local slang, an argot almost impenetrable to outsiders.

That’s why MTV has had such a tough fight with the local German music

channel, Viva. And with local music channels in just about any other

market you care to mention.



Digital, with its massively increased channel capacity and reduced entry

costs for new players, could see more local heroes lining up to take a

piece of the MTV action. Ditto Eurosport, or CNN or the Cartoon

Network.



They’ve known this for years, of course, and have been firefighting

where the challenge has been most threatening.



But recently, with digital in the offing, some have decided to reinvent

themselves completely. Forget pan-European, the phrase these days is

’multi local’. MTV Europe has been in the forefront of this, looking to

the digital future earlier than most.



Over the last two years it has been fragmenting. Whereas previously MTV

was a monolithic pan-Euro channel - one feed, in English, for the whole

continent - it is now several channels, each serving a sub-region of

Europe with a focus on one hub country. Thus the UK and Ireland service;

a Scandinavian service in Swedish; a German-language channel serving

Germany, Austria and Switzerland; and an Italian channel. Other tailored

services are on the way, with France and Spain a priority.



MTV is not alone in this. The other relative success over the last

decade has been Eurosport. This was initially set up by the European

Broadcasting Union (EBU) to take advantage of sporting rights that its

members had already paid for but couldn’t fully utilise. EBU stations

might have paid to televise a tennis tournament in, say, Frankfurt but

terrestrial broadcasters were never going to broadcast the whole

tournament. They didn’t have the room; Eurosport does. Sport is

unarguably an international language but even Eurosport has come to

recognise the Des Lynam factor - pundits, personalities and commentators

with an individual voice can also drive ratings.



Eurosport’s ad sales director, Tom Keaveny, states: ’We are under less

pressure from national sports channels because where they exist they

tend to be small-audience subscription channels - which isn’t always

good for advertisers or the sports themselves. But there is no harm in

tailoring the service.’ Eurosport also realised that if Rusedski is

playing Henman in Frankfurt, UK viewers will not be best pleased at

having to watch Boris Becker instead just because Eurosport has more

German viewers. French and Scandinavian hybrids have already been

launched and a UK version is on the horizon.



The Children’s Channel is moving to a mix and match strategy too - in

addition to its pan-European feed in English (taken by the UK, where it

is the third most-watched cable and satellite channel), it has feeds in

Dutch, Danish, Swedish, Italian, French, Spanish and Polish, plus a

branded programme block running on terrestrial TV in Hungary.



But the situation is more problematic for its Time-Warner stablemate,

CNN. The whole raison d’etre of this operation is global news and though

it has made efforts to improve its previous track record as a channel

that shows you the world from a US perspective, it can’t decentralise

too radically and still keep its USP. Enquiries about digital strategy

are met with a terse ’the company does not wish to comment at this

stage,’ but even CNN is rumoured to be moving on - it has already signed

a deal with a local Spanish broadcaster and other deals are believed to

be in the pipeline.



Only business and finance channels like Bloomberg and CNBC seem totally

unperturbed. These are all about numbers and dollar signs - and that

really is a universal language.



All of which has led many commentators to suggest that pan-European TV

is dead. Others would go as far as to say that we’ve already seen the

high-water mark of international channels; that they were an interim

solution, a historical accident.



We are only just starting to appreciate how parochial television really

is. Non-domestic programming commands a tiny share of viewing, even on

the big national networks. Less than 20 per cent of ITV’s programming is

acquired from abroad - usually the US and Australia. A spokesperson for

the network comments: ’In 1998, of a total of around 5,000 network hours

of programming, under 1,000 is acquired. That covers all feature films,

all acquired drama - things like Baywatch and Home and Away - and all

the cartoon programming we buy in.’



Furthermore, acquired programmes only account for a fraction of total

ratings across the Continent. Programming from Rupert Murdoch’s Fox

stable - The X-Files or The Simpsons, for instance - does crop up, but

look at the viewing figures for the top French networks and the only

international programming in the ratings is bizarre stuff like Wycliffe.

Germany, Italy and Spain are the same. They have a perverse desire to

watch the sort of programmes that Clive James laughs at; we meanwhile

have a perverse desire to watch quirky local acts like Clive James.



There is another difficult question for the international players to

face. Where is the ad revenue going to come from? For years they’ve been

selling a one-stop shop and have been moaning that not enough clients

have been centralised enough to make that single pan-Euro airtime

decision.



The irony is that, at a time when advertisers are putting centralised

structures in place, the broadcasters are suddenly focusing efforts at a

national level.



The key here is flexibility. Chris Dobson, regional sales director at

MTV Europe, reveals that the network takes 50 per cent of its revenue

from local budgets. And client centralisation is not as alluring as it

once seemed. He comments: ’Pan-European advertising budgets are all

about a relatively small number of clients - if one changes direction, a

large percentage of the market goes. We are now a hybrid. We have a

complete menu of different ways to buy MTV.’



Mick Buckley, senior vice-president of entertainment advertising sales

at Turner Entertainment, agrees that the proposition is becoming more

sophisticated: ’We work with a number of international clients from a

channel brand perspective. It’s not just about 30-second ads, it’s also

about tapping into other things like the broader relationship we have

with consumers and integrated media opportunities within Time

Warner.’



These include packages bringing together things like sponsorship, plus

in-store and on-pack promotions tied to cartoon character licensing

deals. But he’s in a rare position. Not everyone can offer Scooby Doo

and The Mask.



But some international media buyers say that broadcasters should be

careful in considering new strategies. Eamonn Store, international

account director at Carat International, says: ’The danger in

concentrating on a localised route is that they stand to lose one of the

most important commodities they have - their global brand name. They

should also take care not to reward local advertisers at the expense of

the centre. And there’s a danger of going too fast too quickly,

especially with digital. Digital viewers are lost viewers because they

will not be picked up on audience measurement systems.’



The ratings issue remains the biggest problem faced by broadcasters.

Even if MTV could quadruple its UK audience, it would still only average

one ratings point. Dobson argues that 1 per cent of 16- to 34-year-olds

across Europe means a total of 8.5 million. But that’s still small,

especially when you consider its increasing overheads.



Iain Jacob, executive international director of Motive Communications,

comments: ’If MTV has achieved a 50:50 balance between local and

pan-regional revenue, that’s a massive shift - it’s come a long way in a

year. If pan-European, centralised revenues go down, it can fill their

advertising windows with local advertising. The only problem is that it

is very expensive. Suddenly you need four or five sales teams.’



Can they pay their way? Jacob argues that we’re about to see who the

genuinely committed big international players are. The future will all

be about large advertisers having the right sorts of conversations with

the right media owners - and that is likely to involve some form of

global perspective and notions of strategic partnership. Within that

context, the fine-print of how airtime deals are structured - locally or

internationally - is relatively unimportant.



But broadcasters still face the long-term problem of how best to extract

value from their programme resources and their channel brands. At this

level, structure is vitally important.



And if we want to know what the future will be like, we should perhaps

look to Fox Kids. The first big broadcasting brand to implement the old

cliche about thinking global and acting local. Despite being a

relatively late entrant to the business, it appears to have stolen a

march on its rivals.



A two-year-old venture between News Corp and Saban, it began

constructing a network on a market-by-market basis. Some aspects are run

from the centre - style, attitude, ’brand personality’ - but each

national operation compiles its own schedules from Saban’s library, the

world’s largest storehouse of children’s programming, and produces its

own continuity strands. Most European markets now have a Fox Kids

channel.



Rick Plata, the network’s director of advertising sales Europe, concedes

that the network’s structure makes it slightly more complicated to do,

say, a one-stop sponsorship deal across the whole network - but it is by

no means impossible. And of course, Plata can mix and match airtime

deals across several territories.



Having a national focus, both in terms of onscreen style and marketing

back-up, maximises the potential for audience growth without

compromising the network’s international brand equity. So perhaps

international network TV isn’t dead. It’s just starting to look very

different. ’The future of pan-European television is simple,’ Plata

states bullishly. ’It’s Fox Kids.’



Fox Kids - Joint venture between News Corp and Saban, its style and

attitude are defined centrally but individual national operators control

scheduling and record their own continuity programming - a mix which has

proved successful



MTV - So much for music being a universal language. Where once MTV was

the archetypal pan-European broadcaster, today it operates a whole set

of channels serving separate European sub-regions - a strategy which

Eurosport is looking to replicate.



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