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TV buying helping budget crunch; inventory replenished.

With the U.S. TV market being flat, and not likely to improve until the expected boost in the number of cable channels, it's the international TV scene that looks bright and continues to provide expanding sales opportunities for the Americans. At the same time, the Europeans have become more selective in their buying and are increasingly concerned about potential ratings.

The European product provides competition, but there is no question that - notwithstanding inter-European co-productions - Hollywood still reigns undisputably, partly because of the enormous availability of the product, and partly because of its quality. This despite the U.S. penchant for raising prices (by about 10 per cent), which most European networks can well afford. A good example is France's Canal Plus, which, in 1991, racked up revenues that ran some 15 per cent above 1990.

Ultimately, it's the majors who dominate the field, mostly because they have the biggest, best and most expensive shows. At the recently concluded Monte Carlo TV market, Paramount and the Beta Group had little trouble clinching major deals for Paramount's $27 million Indiana Jones Chronicles series. It was perhaps significant that, while Beta referred to the series as a co-production, Paramount was careful to specify that it was a Paramount/George Lucas project, and not a co-production. Beta is handling the international sales for mainland Europe.

It became clear at the market that international expansion is still possible, not only in the former Communist countries like Hungary, Poland, Czechoslovakia, etc., but also in places like Turkey, where commercial TV has started up and money is available. Greece and others are slowly generating more revenue, and the major Latin American countries like Brazil and Argentina are beginning to provide dollars. Even Albania is beginning to buy outside programs.

The prevailing business atmosphere at Monte Carlo, while not "explosive," nevertheless communicated a great deal of activity and encouragement. Even the smaller companies reported good business, with the proviso that they had "niche" product which the major didn't offer.

The recession is now being felt in Europe, which ultimately could prove to be a boom for the U.S. major distributors and the independents. The budget crunch at most European broadcast organizations is forcing production cuts and increasing buying activities. This is like substituting a $600,000 locally-produced show with a $20,000 per hour purchased series. Even with the recent cost increases announced by the U.S. majors, buyers aren't complaining too much, if only as a warning of becoming more selective. And, what cannot be purchased from the majors, will happily be filled by the stand-by independents.

So, at Monte Carlo the outlook seemed bright for both the small distributors and the majors. Even broadcasters can now look at the increased buying as a way to balance their budgets. This is contrast with the situation in the late "80's, when program inventories were full, and expanding advertising income allowed increased local production.

On the European side, there are expectations for 1993 and the single market, though nobody believes that there will be any sudden changes. This despite the projected quotas, which could encourage European stations to play more local and Europe-generated shows.

For the moment, the European volume doesn't provide any serious competition for the Americans, with their vast choice of offerings, though co-production continued to be a favorite market topic. There is no question that the European production biggies - like Kirch in Germany and Berlusconi in Italy - are going to become more active in concert with U.S. production companies and networks. In part, this is in the hope of finally coming up with European-oriented programs that stand a chance of making it to the American airwaves.
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Title Annotation:Monte Carlo TV Market
Publication:Video Age International
Date:Mar 1, 1992
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