A Beta experience.

How big is Beta? How powerful is 68-year-old Leo Kirch? The answer to both of these frequently asked questions is, of course, sehr. But here's a seldom asked Frage: How smart is Kirch? Sehr klug!

Why? While some major European broadcasters were giving most of their product away for international distribution, Kirch's Beta was accumulating a huge library. Thirty-five years in the making, it holds 15,000 movies, 55,000 TV program hours and 600 film soundtracks, all stored in deep freeze.

With a few exceptions, European broadcasters who have been in operation as long as Beta have not developed libraries of such international quality. The reasons for this vary, but co-productions and pre-buys have something to do with it. In addition, what might now be considered broadcaster negligence was often due to past budget restrictions. Distribution rights come at a price, after all.

Beta had a better strategy: to get distribution rights for acquired product as well as for programs that Beta commissioned and co-produced by financing the extra costs with the cash flow from its distribution activities.

This library now makes money in three major ways. Since the value of its assets increases each year, Beta can leverage it out for low-cost outside financing. The library generates large revenues with low overhead. And by representing perhaps the only game in town for the future of digital television, it encourages advantageous alliances. The Beta strategy of retaining, whenever possible, the German soundtracks of acquired programs will also play well in the multilingual satellite TV future. Another winning Beta strategy has been the ownership of several European TV outlets: SAT 1 (43 per cent), Premiere (25 per cent), Kabelkanal (45 per cent) and DSF (25 per cent), all in Germany; Tele+ (39.9 per cent) and Mediaset (10 per cent) in Italy; Tele 5 (25 per cent) in Spain; and Teleclub (100 per cent) in Switzerland. In 1993 the free German TV broadcast alone generated the equivalent of $1.4 billion for the Kirch Group. Overseas, Kirch's operations broken even, while its overall revenue is estimated at $4 billion a year.

Beta has also used those stations to bait potential co-productions and to fully exploit its library, in addition to expanding its own productions and acquiring "volume" programs at discount prices.

Video Age was recently invited to tour the Beta facilities, the Fort Knox of European programming.

The Beta treasure is located in Unterfohring, (far l.) a community on the outskirts of Munich that is home to all the major German and international entertainment companies, including ZDF and MGM. Housed in a five-story building facing Betastrasse, the Beta library is protected by an elaborate security system: an alarm goes off if a door is kept open for more than 30 seconds, and employees carry electromagnetic identification cards that open the doors automatically when they approach.

Surrounding the library are Beta's imposing post-production facilities for dubbing, subtitling, film-to-tape transfer, standard conversion, duplication and special effects (including computerized animation), all of which employ state-of-the-art digital technology. The library itself is in a cooled underground vault that resembles a bunker. Before entering the film room, one cannot help but be impressed by the scope of the tape library, an incredibly large facility maintained at high pressure to keep out dust. The film storage vault - which rumor has it was constructed by the same architect who built Saddam Hussein's bunker - stands 40 feet high, and tall cranes riding on railroad tracks are necessary to gain access to the movie reels. Some treasured films are stored in deep freeze.

Film titles, subject matter, synopses and credits can all be retrieved by computer.

Beta's administrative offices are in a five-story building in bucolic Ismaning, (above l.) which is also outside of Munich.

Our exciting tour was arranged by the Kirch Group's Johannes Schmitz (pictured at left with Dietrich Gzuk, one of the facility managers) and Michaela Niemeyer (pictured above sitting in her corner office).