Currency devaluations hitting programming budgets, a flailing digital satellite industry, and decreased advertising revenues have resulted in a rather dismal situation for many Asian broadcasters. At best, stations are tightening programming strategies, and at worst some have cut back dramatically on acquisitions, or stopped buying altogether and are relying on re-runs to fill airtime. Still, those who program factual fare are pressing on valiantly, and in some cases the market for docs is expanding.
Asian terrestrial TV stations have been hit the hardest by the economic downturn. Various distributors who deal in the Asian territories indicate that offers for programming at these stations have decreased nearly 50% in some cases over the past year. Territories suffering the most include Korea, Malaysia, Indonesia, and the Philippines.
‘Generally there has been a huge effect on acquisitions and a lot of people are not buying at all,’ says Natalie Yuen, head of TV sales, Asia at Southern Star Sales’ Sydney office. She goes on to say that many programmers are taking stock of their inventory and are asking for additional runs and to extend license periods.
‘We are still working hard to maintain our acquisition volume, as we believe in providing our audience with the best and the latest programs in the market,’ says Ling Sze Gan, programming executive at Singapore Television Twelve. However, she admits the service is definitely working with tighter license fees, and that they are asking for at least two runs from most of their contracts in the event that they have to do re-runs in off-primetime hours.
Because most deals are done in U.S. dollars, dropping currency rates have hammered broadcasters’ acquisition volume, as well as revenues for foreign distributors who deal in local currency. For Japanese digital satellite stations the situation is extreme. ‘We have seen license fees drop from US$1,500-$2,000 to US$500 because of devaluation,’ says Marty Gross of Toronto-based agent Marty Gross Film Productions Inc.
The larger, more established broadcasting entities with a strong international presence are still reporting steady business, and say that programming budgets have not decreased due to the economy at this point. Steve Askew, head of general entertainment at Hong Kong-based StarTV says that they have, for the most part, avoided a slowdown in acquisitions. ‘We are possibly the exception because we are a big company and haven’t really been as affected by the regional crisis, such as those in India, China and Taiwan,’ says Askew.
When the economy takes a downturn, advertising budgets are often the first to be slashed. Although advertisers in most cases are still spending, they are very cautious. Manny Ayala, VP programming operations at Singapore-based Discovery Channel Asia, says that buyers are generally taking much longer to make commitments for purchasing air time. In addition, he notes that there is a trend for advertisers to avoid engaging in long-term commitments, and search out a series of smaller deals instead. ‘Ironically, our ad sales revenues have increased in the last half year,’ says Ayala. He attributes this growth mainly to the fact that, as ad budgets have been trimmed, advertisers are seeking less expensive alternatives to regular terrestrial television.
Having launched only this July, National Geographic Asia is still testing the waters. ‘The economy has not really affected our acquisition budget at this point,’ says Marcia Goh, programming manager, National Geographic Asia in Singapore. But she does admit that in terms of ad revenue from airtime, it is a little slow: ‘I do get the feeling that we have to work harder and be more creative in the packages that we offer to clients.’ She goes on to say that although Nat Geo would consider barter advertising, it is not something that they are taking advantage of right now.
It’s fairly well-known that nature and science documentaries are the most popular types of factual programming in Asian territories, but lifestyle and performing arts also tend to do well. Generally, broadcasters and distributors indicate less demand for social issues, hard-edged investigative programs, and extreme/outdoor adventure product.
‘By far, the highest-rated programs in our region are wildlife programs,’ says Ayala at Discovery Asia. Within that category, he says the most popular seem to be the ones with a healthy dose of the `wild’ in wildlife. ‘The highest ratings for a series that we have seen was for Hunters [produced by Telenova in association with Discovery],’ says Ayala. He reports that one episode of Hunters achieved an impressive 2.4 rating in Taiwan. Ayala also points out that the success of wildlife in the ratings in Asia mirrors the experience of other Discovery networks around the world.
‘Natural history is one of the most popular genres with our viewers,’ says Ling Sze Gan of Singapore Television Twelve. Two of their top-rated shows, both from BBC’s Natural History Unit, are predatory series: Killing for a Living (US$104,000/episode) and Wildlife Specials, (US$80,000/episode). Gan also mentions that travel and lifestyle programs perform well.
With the introduction of Discovery and the recent launch of National Geographic in Asia, the rivalry for documentary audiences has become extremely competitive. Steve Askew at Star TV says it has brought about a change in his channel’s programming strategy. ‘We made a very conscious decision about nine months ago to only acquire docs that fell more into the category of reality programming,’ says Askew. StarTV airs FOX’s When Animals Attack (produced by Brad Lachman Productions), When Disasters Strike (produced by ZM Productions, distributed by FOX), and World’s Scariest Police Chases (Pursuit Productions, distributed by Alfred Haber). ‘I felt that it would be a mistake to try and broaden into the nature genres because it was already being done on other channels,’ says Askew.
Foreign distributors who offer factual programming are perhaps in a much more secure position than those who deal primarily in drama or feature films, says Jean Huang, senior director of international sales at Los Angeles-based GRB Entertainment. ‘Light entertainment and documentary programs are traditionally cheaper than fiction series and dramas. For this reason broadcasters who in the past have not been that interested in non-fiction shows are now considering them,’ says Huang.
Case in point, Asia Television Limited (ATV), a terrestrial-free TV Hong Kong-based commercial station, has announced a concerted effort to provide viewers with more documentary programming. ATV has introduced a new documentary strand to air on its Cantonese-language Home Channel called Real Documentary. They are currently launching a 39-hour, multi-million dollar series titled Stories from Afar, telling stories of Chinese living and working overseas and their endeavors around the world.
ATV’s English-language World Channel will be re-launched in 1999 with a shift from a movie-oriented programming strategy to an info-tainment channel. Having tripled it’s factual programming budget, ATV has already acquired foreign documentaries from U.S.-based E! The Entertainment Network, bbc, Carlton Television, Discovery Networks, and Beyond Distribution. World Channel will also carry Wheel of Fortune from Kingworld and The Late Show with David Letterman from CBS.
The main destination for foreign factual programming in Japan is national public broadcaster Nippon Hoso Kyokai (NHK). Distributors who sell to NHK indicate that license fees have pretty much remained the same since the economic crisis. However, prices have dropped steadily over the past five or six years due to increasing budget requirements for domestic production, as well as concerns over having to save money for the impending switch to digital in 2003.
Alex Korenori, an agent for Tokyo’s TMI & Tuttle-Mori Agency, says that Japanese viewers are generally interested in factual programming with an international scope, but that it must be topical to the Japanese market specifically. He adds that the commercial networks in Japan are very competitive with each other and, as a rule, do not broadcast many foreign documentaries since the ratings are inevitably lower than domestic programming.
Although broadcasters and distributors involved in the Asian tv market are hesitant to proclaim a picture of doom and gloom for the future, no one expects much will change in the short term. ‘I don’t think that in the next couple of years anything will happen,’ says Natalie Yuen of Southern Star. ‘For it to get back to where it was, it will take at least five years, if not longer. As well, we will probably see a lot more damage in terms of what is happening politically in places like Malaysia, Indonesia, and the Philippines.’
‘I think that as economies in the region continue to shrink, we will see a heavy emphasis on cost containment among all the players in the industry,’ says Discovery’s Ayala. He goes on to say he expects some of the weaker players to fold or be swallowed up by larger, better-financed companies, and original production will probably decrease as programming budgets come under more intense scrutiny.
While the Asian television industry has definitely been adversely affected by the downturn in the economy, most of the larger players are still proceeding at status quo. However, all the industry’s players are taking precautionary measures because all anticipate that the situation will most likely get worse before it gets better.
MIP-ASIA `98: The Low Down
This year MIP-ASIA takes place December 10-12, and the venue has moved from Hong Kong, where it has been for the last four years, to Singapore. In the past, many broadcasters and distributors involved in the Asian TV business have charged MIP-ASIA as an ineffectual market, primarily questioning why it was scheduled so close to MIPCOM. However, because of budget restrictions, many of the small to mid-size Asian broadcasters who were unable to attend either MIP-TV or MIPCOM this year will be depending on MIP-ASIA for programming.
Indicating that he hopes to attend MIP-ASIA this year, Alfred De Leon, VP sales and foreign program acquisitions for Radio Philippines Network, says ‘right now there is a very cautious approach to acquisitions. We did not attend MIPCOM this year, and I understand that other networks in the region did not attend either.’
‘I know that last year it [MIP-ASIA] didn’t have great attendance, but this year, with the economy, it has really been brought back into focus,’ says Natalie Yuen, head of television sales, Asia for Southern Star in Sydney. ‘I know even before MIPCOM I tried to find out where everyone was going to be, and most of the broadcasters are going to be at MIP-ASIA.’
Event organizers Reed Midem Organization contend they were pleased with last year’s attendance, and expect the numbers for this year will at least equal last year and may, in fact, increase slightly.
Marcia Goh, programming manager, National Geographic Asia also believes budget issues have definitely played a role in how much the smaller broadcasters will depend on MIP-ASIA this year. ‘I would think that in these difficult times it might be more cost-effective for Asian broadcasters and agents. But in terms of product, I would think that the two majors, MIP-TV and MIPCOM, offer a greater variety and give buyers a jump on the new products. As well, a lot more independent European and American producers are there.’
Steve Tapp, VP and general manager at Toronto-based ChumCity International says that although they have felt an impact due to the recessed Asian economy, ChumCity is not prepared to forgo doing business in those territories. Tapp says that MIP-ASIA has always been an important market to them, and that has not changed. ‘We are taking half a dozen people to MIP-ASIA, and still believe in that market. We are in business for the long term.’
This echoes what many distributors who deal in the Asian territories are saying. Although somewhat dejected at the lack of revenues generated from Asia, most are making the trek to Singapore in hopes some sales can be achieved, and to show a vote of confidence to their Asian clients.
CHINA: business still steady, but barriers still up
While the rest of Asia struggles to recover from the economic flu, China has managed to avoid much of the market turmoil. Foreign distributors report that sales into China remain steady, and that although doing business there is a challenge, the climate for foreign programming is warming up. There is a large appetite for drama, and demand for documentary and educational programming is growing. Currently, the lion’s share of foreign audio-visual product acquired in China comes from the U.S., Taiwan, and Hong Kong.
The Chinese authorities have never officially granted its people the right to receive overseas programs, and the live reception of foreign signals is still illegal. However, signals from countries such as Hong Kong and Taiwan have penetrated into China, especially in the southern regions.
Most government-sanctioned foreign cable and satellite programs air in China via delayed broadcast programming blocks. Discovery Asia reaches over 16 million households in the form of a two-hour branded block, and Manny Ayala, VP programming operations at Singapore-based Discovery Channel Asia says their advertising revenues in China continue to grow steadily.
There remain considerable censorship restrictions for foreign programmers who sell to Chinese broadcasters, and some topics are not acceptable for political or social reasons. The Ministry of Radio Film and Television (RFT) is responsible for the censorship of programs broadcast in China, and must authorize all foreign programming coming into the country.
Not unlike the rest of Asia, Chinese programmers tend to look for series, particularly nature series with strong educational content. Documentaries focusing on the lives of people who have triumphed over diversity, whether it is ill health or economic circumstances, also tend to please.
The complexity of the Chinese market, coupled with the fact that broadcasters who will buy foreign programming often do so through barter, can make selling into the region a perennial challenge for foreign distributors. However, most broadcasters are very interested in international coproduction.
‘We have a good relationship with CCTV (China Central Television) for coproducing documentaries,’ says Natalie Yuen, head of television sales, Asia at Southern Star in Sydney. ‘We basically have access to all of the CCTV library footage which we re-edit into different programs. For example, we have just launched the China Wild series (6 x 60-minutes) in which we used old footage and re-versioned it for the international market.’
Although China’s openness to foreign programming has increased over the last few years, distributors still find that the challenge lies in getting to know the appropriate contacts for acquisitions, and spending time to cultivate personal relationships before proceeding with discussions about specific projects.
JAPAN: Poor reception for digital satellite
Digital satellite television in Japan is not the mecca of opportunity foreign doc and factual distributors hoped it would be. In an era where Japanese commercial broadcasters favor domestically-produced product, and national broadcaster NHK has lowered acquisition budgets, many distribs had set their sights on the newer digital platforms.
Unfortunately, the new services are struggling. DirecTV, launched last December, has tried to lure viewers by offering 100,000 free tuners and dishes, but it’s still coming in a distant second to SkyPerfecTV (created last May as a result of a merger between Rupert Murdoch’s JskyB and PerfecTV), which is also not meeting projections.
‘One of my client stations was paying US$2,000 per hour for digital satellite rights last year. The price is the same now, but the required term is three years, not one,’ says Alex Korenori of TMI & Tuttle-Mori Agency in Tokyo. He goes on to say that it is necessary to accommodate such requests, if only to ensure that these stations do not go out of business. He points to rumors that some operators are even thinking of returning their broadcast licenses to the Ministry since the going is so rough.
Marty Gross of Toronto-based Marty Gross Film Productions Inc., says that timing for the launch of digital satellite in Japan could not be worse. He points to consumer indecision over which service to subscribe to, as well as the fact that the equipment required is a luxury expense in tough economic times.