September/October 2010
Volume 30 No. 6

October 2010 Cover
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U.S. Studios Share The Int’l TV Pie

Hollywood studio executives are reluctant to talk about market shares of their international TV divisions. In order to generate an estimate of this year’s figures, VideoAge was told by former studio executives to look at the U.S. box office grosses of three years ago. And that was exactly what we did, naturally adjusting figures for CBS Studios because it no longer releases theatrical movies since it separated from Paramount.

Marion Edwards, president, Television Distribution, Twentieth Century Fox TV Distribution, was one studio executive who gave us some insight: “Fox has been pretty lucky, so I think our market share will be stable: Between Warner Bros. and Fox, we control much of the U.S. programming. But that’s driven by the amount of content we drive into the market. We have a lot of content for cable and network. So I would assume we have the second largest amount of content.”

Armando Nuñez, Jr., president, CBS Studios International, added: “There continues to be a high demand for U.S. produced programming. We feel strongly that our new series as well as our extensive library provide a great potential for growth as the available shelf space for programming is expanding with the digitization of television.”

Reportedly, the major U.S. studios account for over 80 percent of the annual $15 billion world TV sales. The way the pie is divided among the six major U.S. studios is difficult to gauge, but from the BO receipts and from a glimpse at the statements made in VideoAge MIPCOM Daily’s Q&A with the studios’ heads of TV distribution, we estimated that Warner Bros. tops the list with 19 percent, followed by Fox with 18 percent. After that comes Disney at 17 percent, Sony Pictures with 16 percent, NBC-Universal with 12 percent. The combined CBS-Paramount could bring their share to 18 percent, but individually it has been an insurmountable challenge.

By using last year’s U.S. BO figures as a point of comparison, the accurate ranking among the major six studios was:

Warner Bros. –– 23.96 percent
20th Century Fox (including Searchlight) –– 18.79 percent
Paramount –– 16.8 percent
Sony Pictures –– 16.57 percent
Disney –– 13.98 percent
NBC-Universal –– 9.87 percent.

Cumulatively, the six studios grossed $8,785.6 million at the U.S. BO.

In terms of growth, Fox’s Marion Edwards commented, “When something happens like the U.K. stops buying, which they did a few years ago, it’s not like some other market in a developing region will rise up and replace that revenue. International distribution is a balancing act of trying to grow up the smaller markets while maintaining the larger markets. I’m happy to say that we’re on a pretty healthy trend going into MIPCOM. On top of that, growth will come from growing these other business, online, on demand and new media ventures.”

Keith LeGoy, president, International Distribution, Sony Pictures TV, said, “While the big Western European markets such as the U.K., France, Germany, Italy and Spain feature strongly at MIPCOM, we’re very excited with ever-growing broadcast markets in Central and Eastern Europe and across Latin America, the Middle East and Asia.”

Ben Pyne, president, Global Distribution, Disney Media Networks, confirmed, “There are some developing territories –– Central Europe, Russia, Southern Europe, the Middle East and so forth –– where there is continued growth potential.”

The full interviews with the studio presidents can be first read in VideoAge’s MIPCOM Daily and, later on VideoAge’s Water Cooler online feature. Overall, the picture looks really rosy for the U.S. studios. The Walt Disney Co. reported a 40 percent rise in profit, climbing from $954 million in 2009 to $1.33 billion in the third quarter of this year. The company collected an operating income of $123 million, a welcome change since it lost $12 million a year earlier. In addition, revenue for the three-month period that ended on July 3 registered a 16 percent increase from last year at $10 billion. Total revenue for the nine months was $28.32 billion, an eight percent increase from the previous year.

Disney’s cable networks revenue rose from $2.56 billion to $3.28 billion, a 28 percent increase for the third quarter, and operating income rose a whopping 50 percent to $1.67 million. However, the broadcast group’s operating income rose only two percent to $209 million, and advertising barely recorded any increase.

On the other hand, Time Warner credited a strong advertising market for its recent jumps in revenue. Second-quarter net income rose seven percent to $562 million and revenue jumped to $6.37 billion, an eight percent leap. For the six month period that ended June 30, total revenues were $12.7 billion, compared to $11.9 billion in 2009.

Revenue for Time Warner’s network group, including HBO, the pay cable network, increased 11 percent to $3.17 billion. Subscriptions fees, which cable and satellite operators pay to carry Time Warner’s cable channel, registered at $1.85 billion, a nine percent increase.

Like Disney and Time Warner, CBS Corporation reported higher earnings, likely due to the economic recovery. CBS recorded earnings of $150.1 million in the second quarter, which have climbed from $15.4 million in the same period the year before. Revenue increased by 11 percent to $3.33 billion. These earnings suggest that local advertisers are beginning to spend more after spending dropped in 2008 and 2009. According to CBS, advertising at its local broadcasting unit increased by 17 percent since last year. In general, local broadcasting revenues rose from $578 million last year to $678 million this year. Political ads are contributing to this increase in advertising revenues, and they are expected to play an even larger role as the election draws nearer. Ad revenues for CBS were up five percent as a result of the March Madness basketball finals.

The entertainment division saw a climb in revenues to $1.67 billion, up from $1.52 billion. These revenues increased after CBS sold CSI, NCIS: Los Angeles, and The Good Wife internationally. The international sale of TV shows is credited for helping the entertainment unit’s 10 percent increase from last year.

Adding to the gains is the fact that CBS also made successful efforts to lower costs and reduce debt. The company is rebuilding its websites in hopes of earning more money from online advertisements. In New York, the WCBS TV station and the WINS, WCBS and WFAN radio stations will feed into one website.

CBS recently announced a 10-year carriage agreement with Comcast, the country’s largest cable operator, that included retransmission fees for CBS-owned TV stations.