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The satellite rights mess.

The European voice on the other side of the phone could not mask his amazement. "Why don't the Americans sell European satellite rights according to their languages? Why are they ignoring a good source of new revenue?" The caller asked to remain anonymous, since satellite rights is an area in which he is not directly involved. (He didn't want to step on other people's feet).

Why indeed? Video Age resolved to find this out.

Our first call went to Twentieth Century Fox's William Saunders, who, after an intial burst of explanations, changed his mind and referred us to a specific person at the MPAA. "It's better than the MPAA speaks out about this," he concluded.

After much ado, the MPAA official agreed on an interview, provided that he would not be identified by name. The MPAA, official position was that it didn't have an official position. Member companies can sell or not sell satellite rights, at prices set by individual companies. The MPAA didn't have a joint strategy on satellite rights. "We only provide information, help member companies with discussion on various implications, and monitor copyright infringements," he said.

Are the major studios selling satellite rights? "Some are, some aren't," he replied. Could he mention active companies in this area? Yes, Walt Disney and Warner Bros. Could the MPAA provide us with a list of satellite TV services? No, the MPAA doesn't have such a list.

He was however, more forthcoming about the recently resolved problems with RAI and A2. The latter beamed programs via satellite to North Africa.

In the case of RAI, that organization used American programs licensed only for terrestrial use on its satellite service. The MPAA got involved "after the fact" to negotiate a settlement which was agreed upon at $2,000 per hour. The MPAA official emphasized that the agreed fee was meant to compensate past broadcasts and that negotiations for future transmissions could be different.

In any case, program distributors could certainly use that "fee" as a base for future negotiations.

More open on the topic of satellite rights were the independents. After a telephone interview with Saban's Stan Golden, he immediately faxed an unsolicited four-page report on the subject. Certainly, licensing language rights "will be the way of the future," said Golden. "If a satellite-transmitted signal cannot be confined to terrestrial boundaries, at least it can be controlled within the boundaries of a particular language. "Nevertheless, Golden was well aware of the problems: "In countries with multilingual populations, the spillover from another territory, even if the program is in another language, can violate the granted rights of a licensee. The possibility exists for a country like Switzerland, for example, to receive the same program via its own licenses of signal spill-over in German, French, Italian and English."

The anonymous caller from Europe had an answer for that: "The concept is to sell the same program to each of the European countries, with a license fee increase in accordance with the number of viewers who are able to understand that particular language outside their main territory. For example, if one million French or French-speaking viewers live outside France, then the rate increase would be an extra 'x' per cent," he said. "I doubt than an average German-speaking viewer would be watching Gone With The Wind in Spanish." But, asked Twentieth Century Fox's William Saunders, "What about programs with subtitles?"

Saban's Stan Golden had another problem: "A commercial terrestrial broadcaster will not be happy about being the last 'play-up,' even if the satellite service is in another language. The problems are compounded when 'premieres' are involved."

Terrestrial TV services could include satellite delivery, but only as a relay network, substituting the traditional microwave link.

In this case, all satellite uplinks have to be encoded (encripted, scrambled).

However, a typical satellite TV service is not encripted, since it is directed to the widest possible audience, including DBS reception. Satellite TV deliveries are encripted when transmissions are mainly going over cable systems.

According to AFMA's Jonas Rosenfield, the AFMA does not have an official position on the satellite situation except to advise its members to "be careful." "If an English-language program spills over Scandinavia, that market is virtually lost," said Rosenfield. In any case, the AFMA is in the process of developing a new TX contract model and it is publishing the second edition of a booklet on satellite rights.

ITC's James Marrinan doesn't even want to get into a conversation on satellite rights with a buyer. "We sell only encripted satellite rights." Opening up to other satellite TV services could only mean " losing our packaging opportunities."

To sell satellite rights is "not good for business," commented Marrinan. "Our job is to maximize sales potential for our product. Satellite may give us an incremental gain, but will ultimately weaken our position."

According to Carolco's Lorin Brennan, the language rights will also affect home video rights, once the free movement of goods (video cassettes) becomes effective within the E.C.

Marrinan would like to see the MPAA take leadership role on the subject, but admitted that "they're smart in av iding the issue."

A cursory look at satellite rights like RAI Sat or TVE International, shows that programming schedules are a mix of programs previously transmitted terrestrially.

One possible solution is to have satellite rights licensed together with terrestrial rights, but with the window for the former to begin after the region's terrestrial broadcast has had its first run.

A definite solution, however, is not in sight. One now doubts if there ever could be one.

Possibly, by 1993, the EC could develop some directives. Surprisingly, Americans are not openly preparing themselves. "We never talk about it even among ourselves," confessed Marrinan.

Nevertheless, Marrinan left that language rights in Spanish, Italian or German are less problematic than English or French language rights. But, he said, "Ultimately, we will be making some concessions."

Concluded Saban's Golden: "What we do know for sure is that we have only seen the tip of the iceberg, when it comes to the ramifications of the cable and satellite revolution."

Last December, the EC published a Green Paper expressing two conflicting views, but the predominant one was that the applied laws could be those of the uplinking country.

American interests on satellite rights were not represented within the EC, but an international association of producers is closely monitoring the EC developments.
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Article Details
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Author:Serafini, Dom
Publication:Video Age International
Date:Apr 1, 1991
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