Digging into CEE

The number of pay TV homes in Central and Eastern Europe are set to fall, but international distributors tell TBI business in the region is booming

A Digital TV Research report earlier this year forecast the number of pay television homes in Central and Eastern Europe to fall in 18 territories across the region in the years between 2016 and 2022 – decreasing total TV homes by almost two million and pay TV subscribers by one million.

However, according to various international distributors, the programme distribution business in the CEE has rarely looked brighter.

Free-to-air DTT platforms and the acquisitive channels they house are replacing outmoded analogue pay TV platforms (2017 is expected to be the peak year for paid-for television in the region), and digital pay services are increasingly present, if less desirable to consumers.

“There was a big boom two years ago, especially in Poland when DTT started, and people began to really pick stuff up,” says Red Arrow International’s senior VP of global sales, Bo Stehmeier (right).

The (limited) impact of SVOD

The past two years has also seen Netflix and Amazon Prime Video both launch across the CEE as part of wider global launches – Netflix going international in January 2016 and Amazon following suit in December.

New opportunities mean new buyers, as J.P. Bommel, CEO of trade fair organiser NATPE, notes. “We have got more than 415 buyers coming to NATPE Europe in Budapest, and many of them are new for this market,” he says. Some of these are coming from new markets, “and that’s an exciting development”, he says.

“The global SVOD players are around and have a very focused process here just as everyone else does,” says Keshet International senior sales manager Paula Cohen McHarg. “They’re mainly looking to do global deals, but there are also some local VOD players. I’ve recently done a deal with Croatian SVOD service Pickbox, for example.”

Another Digital TV Research report from December last year predicted there will be 18.19 million paying SVOD subscribers across Eastern Europe by 2021, with Netflix leading the way with 3.5 million, ahead of Russia’s Ivi (2.43 million), Megogo (Russia and Ukraine, 1.32 million), Okka (Russia, 1.08 million) and Ipla (Poland, 900,000). The report was conducted before Amazon revealed its 200-territory launch and is therefore not included in the analysis – presumably it will have an effect.

In that report, Digital TV Research principal analyst Simon Murray said many Eastern European consumers found Netflix “expensive” and transactionally reliant on credit cards, despite low local ownership.

Others, including ex-AMC Networks channels chief Bruce Tuchman in a previous issue of this magazine, have claimed Netflix needs localising before it can be considered a major player and key customer of distributors working in the region.

While Netflix did go ‘fully local’ in Poland earlier this year, Banijay Rights VP of entertainment Andrew Sime says the big SVOD players are not the key target for distributors, with focused, thematic pay TV channels and broad free TV networks accounting for a bulk of business.

“The local acquisitions people are phenomenal, and they know all about your slate,” he says. “Meetings are quick because they focus purely on what’s right for their channels.”

“DTT channels are still buying lots of factual,” says Stehmeier. “In Hungary, TV2 is launching DTT channels, which are all about acquisitions. Those channels are very targeted.

“Considering the booms in Hungary and Poland, we’re looking to place our Catastrophe series, and classics like Empire Builders (above) with broadcasters, and we know localisation is really important to them.”

Quest for classics

Tariffs can be lower than in CEE than elsewhere, and Sime says that contentious formats rarely sell well. “The flip side of loyalty is buyers are cautious against novelty,” he adds. “Formats that could make a splash for the controversy might not immediately work there.”

FremantleMedia’s CEO of the Nordics, Central and Eastern Europe and the Balkans, Daniela Matei (below, right), concurs, saying tried-and-tested, big ticket fare is most in demand.

The Fremantle catalogue is attracting buyers through “major talent shows such as Got Talent, The X Factor and Idols, as they continue to perform and deliver for the broadcasters who license them”, she adds.

While ratings stability is one reason for this, another is purely fiscal. “In recent years, financial pressure is something that has been felt strongly across borders,” says Matei. “This has led to channels using big-brand, established, well-known and well-loved shows to light up their schedules in order to catch the audience’s attention and draw in viewers.”

For Red Arrow, legacy formats such as Gallileo remain the golden goose. “It’s in production in six territories, and in many as a daily show,” says Stehmeier.

He notes that there are signs of newer formats making in-roads.

“Married at First Sight was successful there, as the reality market is becoming more mature,” Stehmeier adds. “Finished tape and formats are doing well, creating a mixture of revenues.”

Mature market

‘Mature’ is a word Kabo International managing director Arabelle Pouliot di-Crescenzo (right) also uses to describe the CEE region. “As a general rule, I feel CEE is very similar to dealing with the rest of Europe,” she says. “I don’t sense or use a different approach. It is a mature market full of many tiny but focused countries.”

Kabo is currently shopping studio gameshow Who’s Who, in which contestants try to guess the true identities of six strangers, in the region.

Pouliot Di-Crescenzo is not the only one targeting sales in the genre. Keshet’s Cohen McHarg says gameshow format Boom! has made it to season three on TV2 in Hungary, and “is working well across the region”.

“We have also seen gameshows make a return to the spotlight as they are affordable, can be stripped easily across the week and deliver great audience numbers,” says Fremantle’s CEE chief Matei.

However, Cohen McHarg says the “most audible trend in the region is the reboot of the classic big formats” such as reality trail blazer Survivor, which poses difficulties for newer formats hitting the market, requiring unconventional launch approaches.

Outside the box

Thinking laterally about how to reduce costs while keeping ratings is one method that distributors can use hit back, says Cohen McHarg. Keshet is talking to CEE broadcasters about using the set of Who’s On Top (right) for Serbia’s TV Pink for their own versions. “It could be a real opportunity for broadcasters to band together,” she says.

Responding to market trends is key, distributors agree. “Keshet is very willing to work in this region and be flexible in the ways this region needs us to be,” says Cohen McHarg. “Our track record in the past year in the region shows we have really expanded the reach.”

Kabo’s Pouliot Di-Crescenzo says bringing production nous to channels is another way to encourage local formats business.

“It is not the same price point as many European territories, but many buyers appreciate what we can provide – the consultancy, the bible and the collaboration. Some European territories will feel they know how to produce the show without you,” she says.

“Sometimes you can’t believe the production budgets, but the programmes certainly don’t look bad on screen.”

Formats hailing in the region are a rare phenomenon, especially those co-developed with international production and distribution companies, which usually aim to sell and/or remake library formats with CEE networks, or produce longer-running scripted series.

“CEE is a strong region for us, one of the most important regions for us,” says Sime. “We don’t have production companies there apart from Mastiff East in Russia, but we do lots of business there with legacy and classic formats like Killer Karaoke and Fort Boyard. Tried and tested formats work well, as viewers show a lot of loyalty, so we know people come to the brands.”

“Our focus across CEE and CIS is mainly as a distribution business rather than creative production house,” says Fremantle’s Matei. “Our local production offices in Poland and Croatia focus on scripted content – we have an ongoing soap in Poland, and until recently, we had a couple of daily dramas in Croatia – rather than entertainment formats.”

Fremantle formats in the region include gameshow Family Feud in the Czech Republic, Slovakia, Romania, Russia and Poland; the wide-selling cookery series My Mom Cooks Better Than Yours in Slovakia and Romania; and dating show Take Me Out in Serbia. Catalogue titles Match Game, Who Knew, Password, Hot Streak and What’s My Line have all found new homes in the region.

Banijay has seen Psychic Challenge (above) run for 16 seasons in Ukraine and 17 in Russia, while Wife Swap has run in some territories for more than 20 seasons.

“Our factual entertainment works less in social experiments and more in the reality space,” adds Sime. “TVN in Poland has commissioned Ladette to Lady, along with Novy in Ukraine and Friday TV in Russia. That’s three versions of a format that is ten years old, and those buyers came to us for the show because they remembered the original.”

Scripted formats

Scripted in Central and Eastern Europe is dominated by telenovelas, either locally produced or imported from Latin America and Turkey.

Distributors such as Eccho Rights, Endemol Shine International, Global Agency and Fox Networks Group Content Distribution have all found success in the region with Turkish dramas, while NATPE Europe always has a healthy contingent of sales houses from Latin America on the market floor.

Istanbul’s Global Agency, for example, has just sold high-rating new season Star TV drama Mother, which comes from MedYapim and MF Yapim, to RTL in Croatia, Sitel in Macedonia, Tele Imedi in Georgia, PRVA in Serbia, BTV in Bulgaria and Antenna in Romania, with deals in Albania, Kosovo, Poland, Kazakhstan, Russia and Ukraine set to close.

Scandinavia’s Eccho, meanwhile, recently shopped Show TV drama Insider to LNK in Lithuania, and Brave and Beautiful to KTK in Kazakhstan and Koho TV in Kosovo.

International scripted formats are also working in the region, however. Keshet’s Cohen-McHarg says a Russian adaptation of Israeli sitcom Traffic Light has clocked up 200 episodes and ten seasons, while TV3 in Lithuania commissioned a 140-episode daily remake.

Kabo’s Pouliot Di-Crescenzo notes that the appetite for bigger volume in CEE scripted series means distributors can milk their formats. While a Canadian version of comedy Cops on the Block ran to 13 episodes, a Ukrainian remake order for ICTV was for an initial 35.

“I’ve had success with different genres, but with scripted formats the most,” she adds. “Maybe the CEE channels appreciate the volume and the scripts. Plus, they also don’t have as much long-term experience in comedy. We do and that’s very positive for us.”

“We’re starting to see the first markets for telemovie remakes, which is interesting,” adds Red Arrow’s Stehmeier, who notes that high-production value detective series from Germany such as The Last Cop and Einstein, and English-language movies are also big sellers locally.

However, edgy cable content is rarely welcome. “The culture is similar to Latin America,”says Stehmeier. “This is a very religious part of the world, and there are not as many pay TV outlets as elsewhere.

“The big SVOD players are looking for edgier slates, so our development has become edgier, but Eastern Europe finds that content too edgy: drugs, sex, and rock ‘n’ roll won’t work in free-to-air.”

For this reason, Red Arrow is looking towards procedurals. “The market is shouting out for them,” says Stehmeier. “We are looking at whether we can do coproductions with major Eastern European territories.”

The FTA market is changing, however. Influential European broadcaster Modern Times Group is selling its channels assets in territories such as the Baltics and Russia, as it refocuses on digital entertainment.

Pouliot Di-Crescenzo says the ripples of these deals haven’t made it to market floors yet, noting she hasn’t “felt anything changing at my end with MTG”.

“We have to wait and see how this plays out,” says Keshet’s Cohen McHarg. “There have been no major changes on the ground for now, but it is on people’s minds.”

Whatever happens with MTG and the shrinking pay TV market, international distributors are unanimously positive about prospects in the region.

According to Cohen McHarg, “It’s a better, stronger market than when I first came here – it’s more open-minded. People are really keen for quality content”.