Video Age International September-October 2012

In This Issue: Sports on TV MIPCOM Preview NATPE’s “Big Five-O” Europe’s Big Spenders THE BUSINESS JOURNAL OF FILM, BROADCASTING, BROADBAND, PRODUCTION, DISTRIBUTION SEPTEMBER/OCTOBER 2012 VOL. 32 NO. 5 $9.75 ® www.videoage.org The fall U.S. TV season is in full swing and international program distributors and broadcasters alike are waiting withbatedbreath to seewhich shows will be successful and whichwill likely go the distance — both in the U.S. and internationally. As pointed out in a VideoAge report last May, in 2011 the U.S. supplied 72 percent of primetime imported drama series to Europe. Naturally, there are also some new midseason shows to consider, but those are best left for our NATPE issue, in January 2013. Nevertheless, U.S. studios at MIPCOM will be betting on their key shows, regardless of the reception they get at home. For example, CBS Studios International will be highlighting four The 2012-13 Season is “Disaster” in Dramas, “Losers” in Comedies (Continued on Page 36) (Continued on Page 54) The U.S. Intelligence Advanced Research Project Activities, a sister agency of the Pentagon’s DARPA (creator of the Internet), is running a four-year $50 million program that pays people to predict major world events. Similarly, unhappy with simply focusing on the present state of the international entertainment sector, VideoAge went on a quest for new challenges — despite being well aware of the industry’s aversion to surprise and change. Not believing in the wisdom of crowdsourcing, VideoAge canvassed a number of leading industry executives, asking them to consider what might be “The Next Big Thing” in television. It’s no surprise they all thought of the Internet — but the conclusions they drew as to the consequences of said changes were much more unpredictable. Sean Cohan, executive vice president of International at A+E Networks, said, “Almost everyone will see ‘The Next Big Thing’ as emerging in some form from the developments that we see in digital, but the exact nature of these changes will differ according to the sector in which you work. For us in the cable and pay sector, Looking For The Next Big Thing Content Piracy in LATAM: A Costly Issue All Around BY DOM SERAFINI Last May a group of major U.S. content suppliers met in Miami, Florida with legal experts for a three-day summit on the prevalence of TV program piracy in Latin America. The summit was the first of its kind. “Piracy remains a major problem for content companies and programmers in Latin America,” (Continued on Page 50) (Continued on Page 48) BY LUCY COHEN BLATTER It isn’t easy being a program buyer these days. Advertising dollars are down and viewer alternatives are up. Local production is down in many parts of the world and cost of imported programs is up. Competition is increasing and the budget to face it decreasing in many instances. Plus, the buying business models are ever-changing with exclusivity often a thing of the past, and shared windows a new reality. And the challenges are not over yet, with new technological TV formats to contend with, such as 3D. If all these weren’t enough, consider the TV trade shows that are constantly multiplying around the world (though the opportunities to attend even some of them are dwindling). No wonder deep down, some buyers wish they were sellers — perhaps Life As a Program Buyer Has Changed, But Attention Hasn’t “There’s a program distributor out here who’d like to come into your office and stand in awe.”

V I D E O A G E • N o . 5 • S e p t e m b e r / O c t o b e r 2 0 1 2 Cover stories: Life of program buyers has changed, but the attention they get has not Content piracy in Latin America is a costly issue for all concerned Looking for “The Next Big Thing” is like searching for the big bang The 2012-13 Season is “Disaster” in Dramas, “Losers” in Comedies 4. World: U.K., U.S., Brazil, Portugal, Germany. Plus, Famous Quotes 12. Tech News: TV vs. Online, Apple’s OTT STB, N-Screen 14. Book Review. Kiss and Tell: The clandestine sex lives of Hollywood stars 16. AFM Preview. Everyone’s happy to return, but the age-old calendar question looms 20. Film Fest Report. Venice boosts its marketplace with a French exec import 22. The Euro Zone Crisis: Distribution has become a more stable business than production 24. NATPE Budapest Review. The Yankees are coming: The Americanization of an Eastern European TV market 26. UbiQ Report. New digital market generates double-digit confusion 28. NAMIC Report : Ethnic multimedia has the attention of TV’s top U.S. execs 30. Local, regional, individual and specialized TV trade shows challenging the world order 34. NATPE Preview. Market gaining strength on eve of its “Big Five-O” bash, but it still feels 35 38. MIPCOM Preview: A bazaar that closes the TV buying season 42. The London Games Part I: Olympics broadcast in facts and figures 44. The London Games Part II: NBC sparks controversy with Olympics coverage 46. The NAB Content Market: Telenovelas take center stage at Las Vegas TV trade show 52. Some light moments at the L.A. Screenings 58. Travel tips, conference news and calendar of events 60. My2¢. The problem with history: It happens after the fact

DI STRIBUTED BY: He’s twice the man you think he is.

SE P T E M B E R/ OC T O B E R 2 0 1 2 (Continued on Page 6) Brazil’s 2014/16: Keeping Track With the London Olympics a thing of the past, it’s now up to Brazil to carry the torch, with Rio de Janeiro playing host to the 2016 Summer Games. The Brazilians are busy readying their city for its international debut, including building four main Olympic sites, new hotels, a new metro line and revamping the airport. (The city will also host some of the 2014 World Cup football tournament, which is scattered among 12 cities) According to reports, city, state and local governments are investing around $12 billion in infrastructure projects to help rejuvenate the city and ease transportation problems ahead of the two international Games. In addition, with only 33,000 hotel rooms, Rio is planning to house 12,000 people on cruise ships to alleviate accommodation shortages. So far, some 65 projects have been completed out of 230 planned. All the facilities built for the 2007 Pan Am Games are considered obsolete for the upcoming Games. Movie Theaters Own Film Studio In March 2011, through a joint venture, the U.S.’s largest theater chains, Regal Entertainment and AMC Entertainment, invested a total of $30 million for the creation of a new film distribution company — the Los Angelesbased Open Road Films. The synergy between movie theaters and studios has been pretty much nonexistent since a U.S. Supreme Court decision in 1848 stripped the American studios of their commercial theaters in the U.S. (but today, IFC Films makes use of its IFC Center theater in New York City and Magnolia Pictures serves the Landmark Theaters chain). According to an article in the New York Times, the company focuses on films with modest budgets that can be promoted with cheaper marketing techniques(likein-theatertrailers)rather than expensive media advertising. The company will offer the theaters a larger pool of movies and a piece of the film revenue (or, potentially, the losses). Open Road’s first release was action-thriller Killer Elite, followed by the thriller The Grey. Last August its comedic Hit & Run opened on some of the chain’s 12,000 screens. This was followed by police drama End of Watch and, in November the remake of Red Dawn. By the end of this year, Open Road will distribute a total of seven movies from several producers. For 2013 it has scheduled two releases: The Bitter Pill and The Host, while two movies are still in development. Ultimately, the company plans to release about 10 movies a year, mostly to be used as fillers during the weeks of the year not packed with the majors’ releases. Open Road Films will play across all theater chains, not just those belonging to AMC and Regal. It could also expand its reach with the completion of AMC’s purchase by the Delian Wanda Group of China. Tom Ortenberg, formerly of the Weinstein Company and Lionsgate, is the company’s CEO. RTP Under Political Fire When a country has financial problems, it’s not unusual for its government to attempt to either shut down its public TV stations or privatize them. Portugal is no exception when it comes to publicaster RTP, which runs two of the country’s four main TV networks. The government’s plan to privatize RTP has met opposition from its board (which resigned in protest last August) and from the European Broadcasting Union, the association of Europe’s public stations. RTP gets 59 percent of its funding — the equivalent of U.S.$179 million — from a license fee, $89 million from the state and $32 million from advertising. The government wants RTP to reduce its budget by $70 million and, in order to achieve the cuts, privatize RTP-2. The government has also flirted with the idea of shutting down RTP and V I D E O • A G E 4

SE P T E M B E R/ OC T O B E R 2 0 1 2 (Continued on Page 8) (Continued from Page 4) instead privatizing RTP-1, the main public TV network, but, reportedly, only to achieve the reduced goal of privatizing the second public network. Since the license fee will remain in place even if RTP-1 is privatized and the savings will be limited to the state’s direct contribution, critics see the real reason as a ploy to mute political opposition to Portugal’s prime minister, 48-year-old Pedro Passos Coelho of the center-right Social Democratic Party. Local U.S. TV Election Gold According to a Wells Fargo Securities report on political TV ads in the U.S., campaigns spent $765.6 million on TV by the end of last July. Over 75.7 percent of that — $579.6 million — went to local stations. Of the local total so far in 2012, 42.5 percent was for presidential campaigns, 21.8 percent for ballot initiatives, 18.6 percent for Senate races, 7.6 percent for House contests, five percent for gubernatorial races, and 4.4 percent for other. The top TV markets measured in dollars-spent are Cleveland ($24.8 million); Los Angeles ($20.6 million); Tampa ($19.4 million); Washington, D.C. ($18.2 million); and Las Vegas ($17.2 million) —with much of the cash going to TV outlets owned by FOX, CBS, NBC, Sinclair, and Disney. The report noted that these cities typically end up on top because of their size, not because they have the most contentious races, and that it’s more revealing to look at political spending relative to the total ad sales in the market. By that measure, Wausau, Wisconsin is on top with election ads accounting for 16.9 percent of total market revenue. It’s followed by La Crosse, Wisconsin (15.9 percent); Sioux City, Iowa (15 percent); Zanesville, Ohio (13.7 percent); Charlottesville, Virginia (11.9 percent); and Great Fall, Montana (11.9 percent) — especially TV stations owned by Sinclair, Gray Television, and Gannett. The report predicted that total political ad spending in 2012 would be more than eight percent versus the various 2010 elections, with 56 percent going to broadcast TV. The New York Times noted that, in addition to the above figures, committees, non-profit groups (Political Action Committees or PACs that do not have to file with the Federal Election Commission) and other super PACs have spent at least $65 million on television advertising, with almost all of it against President Barack Obama or in support of presidential candidate Mitt Romney. These latest expenditures brought the recorded total to $830.6 million in July. Dance Show Airs on Facebook A Chance to Dance, a reality series from the British producers of American Idol and So You Think You Can Dance, was released this summer on both Facebook and the Santa Monica, California-based cable network Ovation. The move to simultaneously offer the show on cable and the social media site indicates that cable networks see Facebook as an ally rather than a competitor, without fearing audience cannibalization. For the reality show (whose genre has little after-life), Ovation took advantage of the buzz created by the social media site. Facebook users paid $1.99 per episode or they could buy a full season, sevenepisode bundle for $11.99. However, aside from an advertising campaign Ovation carried out on Facebook, the social networking site didn’t see any revenue from the deal. Facebook users also had access to exclusive footage and interviews withA Chance to Dance producer Nigel Lythgoe. The show is distributed internationally by Shine. Zodiak’s Plans Revealed European newspapers reported the future plans of Zodiak, the London-based, Italian-owned entertainment company that operates in 17 countries with 45 companies. According to the Italian dailyIl Fatto Quotidiano, among others, the owner, De Agostini Group, is anxious to take the entertainment company public with a market capitalization goal of £1 billion (U.S.$1.6 billion). Previous accounts indicated that De Agostini would like to unload Zodiak (the way Italy’s Mediaset did with Endemol). Last month, U.K. daily The Telegraph V I D E O • A G E 6

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SE P T E M B E R/ OC T O B E R 2 0 1 2 reported that Zodiak was eyeing Toronto-based Entertainment One as a way of floating in a difficult market and accessing Canada’s generous tax credits for certain types of production. Both papers put Zodiak’s turnover at around $800 million, but Il Fatto pointed out that in 2010 losses were $127 million and, last year, $18 million. However, early this year Zodiak was able to obtain loans for $204 million from several banks, including BNP Paribas and Monte dei Paschi di Siena. BBC Exec Moves to NY Times Co. The New York Times Co. has tapped former BBC director general Mark Thompson as its new chief executive. The 55-year-old directed a 20,000strong BBC staff for eight years. He has moved to a company with less than 5,500 employees and annual revenues of $2.3 billion, compared to $5.5 billion at the BBC. Thompson is credited with shifting the BBC’s emphasis more onto the digital side. Many industry analysts credit the BBC iPlayer, aWeb application that allows viewers to stream content on-demand, as Thompson’s crowning achievement. Undoubtedly, that’s something the New York Times hopes to use to its advantage. According toThe Wall Street Journal “For Times Co., Thompson represents what the publisher wants to become: more digital, more social and more international.” Verizon-Cable Deal OK’d The U.S. Justice Department and the FCC, the federal communication authority, gave the green light to a $3.9 billion dollar deal between telco Verizon Wireless and several cable companies The deal allows Verizon to expand its 4G LTE broadband network through unused portions of the airwaves allocated to the cable companies. Running broadband lines into homes is expensive and thus telcos are expanding their wireless coverage by renting spectrum whenever they can. New York Citybased Verizon also operates a triple-play broadband telephone fiber cable service called FiOS, which competes with TV coaxial and fiber cable. In an effort to encourage competition, the Justice Department ruled that Verizon and its cable partners must limit the amount of cross-marketing agreements they make. Among the cable companies involved are Comcast Corp., Time Warner Cable Inc., Bright House Networks and Cox Communications. Bellevue, Washington-based and German-owned T-Mobile will also benefit from the deal — since the cellular company entered into a deal with Verizon to improve its 4G Network and kick off its expected LTE roll-out next year. Bertelsmann’s CEO Confronts Potentials During a company meeting, Bertelsmann’s new CEO, Thomas Rabe, told some 500 executives that the conglomerate was growing at too a slow pace. Bertelsmann, which is controlled by the Mohn family, owns RTL Group (which in turn owns London-based FremantleMedia), among other media companies. The Financial Times reported that during the meeting held last month at its headquarters in Gütersloth, Germany, Rabe complained about low growth and low growth potential. The 46-year-old Rabe, an economist, joined RTL in Luxembourg as CFO in 2000 and in 2006 became Bertelsmann’s CFO. Last year revenues fell to 15.2 billion euro (U.S.$19.6 billion) from 19.3 billion euro in 2006. According to FT, Rabe wants to “attract the kind of talent the company needs to push existing business online,” and “expand faster, become more digital and more international over the next five-to-10 years.” Looking at Bertelsmann’s annual reports fromthe past six years, the average revenue fell 4.5 percent a year, with the largest drop in 2008 (13.9 percent) and a gain in 2011 (1.3 percent). Famous Quotes “E.T. cost a million dollars and we created it in three months. If we wanted to do the same thing with computers, it would take at least 200 people a minimum of five months.” Oscar Winner Carlo Rambaldi (1926-2012), creator of the E.T. character for the 1982 film (Continued from Page 6) V I D E O • A G E 8

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SE P T E M B E R/ OC T O B E R 2 0 1 2 NBC TV vs. Online In the U.S. during the Olympics, NBC broke all records with 159.3 million video streams (of which 64.4 million were live streams) on 9.9 million devices on its three pay-TV sites: NBCOlympics.com, Live Extra and NBC Olympics mobile. Viewers had to subscribe to a cable service or some form of broadband service to access content. Surprisingly the live streaming coverage did not hurt primetime ratings. To the contrary, NBC Olympic coordinator Jim Bell was quoted as saying that, “it helped primetime.” Online averaged 8.56 million streams daily (with one million live), while NBC primetime averaged 31.1 million viewers. In terms of ad revenues it is estimated that $1 billion has been generated from TV ($800 million from primetime) and $60 million from online. Online has served NBC more ways than one, considering that the broadcast network focused on only a few sports in primetime, but muted some of the complaints with a full range of sports shown on its online and cable services. For example, NBC chose to telecast the USA-Japan women’s football final on its sports cable network, rather than NBC TV. Apple’s OTT Becomes Juicy Apple is looking to enter the TV business by offering consumers a TV set-top box (STB) that makes accessing and viewing programming simpler, and gives viewers the ability to watch any show at any time through a DVR that stores content on the Internet. But the task won’t be easy since cable companies see Apple TV as a powerful competitor. In a three-part series, Rupert Murdoch’s Wall Street Journal (WSJ) reported that companies like Apple view the TV sector as their next big market. “But its gatekeepers — the TV distributors [cable and TV stations] and media companies — have been reluctant to let them in.” In keeping with Apple’s user-friendly M.O., the interface is expected to mirror that of the iPad. Apple would also like users to be able to access the TV content on other devices such as iPhones and iPads and is hoping to allow viewers access to all episodes of current seasons of TV shows, whereas now, cable on-demand services usually just offer a handful of episodes on demand. The new device would also provide viewers with access to past seasons already available on iTunes, the WSJ reported. But the paper also pointed out that if Apple wants content, it may have to use some of its $117 billion to buy a studio. Naturally, Apple could buy into TV set manufacturers to embed the OTT STB in the TV receivers, making Apple itself a gatekeeper. N-Screen Brings More Confusion People who used to watch shows on TV sets in their living rooms first migrated to PCs on their desks and then to smartphones. This evolution pressed the TV industry to come up with services that optimized every screen. And this was when confusion was born. Now consumers are inundated with systems for Cloud TV, Connected TV, Internet TV, IPTV, OTT, Smart TV, Web TV and now… N-Screen TV. The result of all this confusion is that it has helped to stymie the growth of broadband TV. Even though they all basically mean the same thing, people are not talking about the same thing when they mention any one of those services. The latest entry, the N-Screen, is just like any connected TV or over-the-top (OTT) device that, through broadband, enables use of content and information across all devices with a screen. Whether this OTT is outside the TV set or inside a receiving device is just a matter of time, considering that by 2015, 80 percent of TV sets will have broadband connectivity. As for the N-Screen system, it basically allows stored content with different encoding processes to move among devices. Tech News V I D E O • A G E 12

SE P T E M B E R/ OC T O B E R 2 0 1 2 V I D E O • A G E 14 It’s not an earthquake you’re feeling; it’s some of Hollywood’s most noteworthy alum rolling in their graves, because the private things they did between the sheets have been exposed by former gas station attendant/bartender/ handyman Scotty Bowers in Full Service: My Adventures in Hollywood and the Secret Sex Lives of the Stars (Grove Press, 286 pages, $25.00), written with producerdirector Lionel Friedberg. Beginning in the 1940s, Bowers —now 88 — arranged sexual liaisons for the Hollywood elite. He began this alternative career quite by accident. In 1946, when he was 23 years old, fresh out of the Navy and working at Richfield Gas Station on Hollywood Boulevard, actor Walter Pidgeon invited Bowers to his home for a little hanky panky. Thereafter, Bowers became the “go-to guy in Hollywood for arranging tricks.” Friends Bowers met during his service in the Marines were happy to be “rented” out to perform all sorts of sexual acts (either heterosexual or homosexual) for money, regardless of their sexual persuasion. The network of people Bowers had at his disposal gradually expanded to include friends of friends and even girlfriends of his Marine buddies. The majority of the stars Bowers exposes are male, and most (both male and female) are either gay or bisexual. The people who came looking for tricks weren’t all Hollywood men, either, “some came from the corporate and banking community,” he tells us. Bowers doesn’t mince words; he describes the encounters, particularly those between people of the same sex, in graphic detail. Bowers reveals the sexual preferences and recounts numerous excursions of big stars fromoldHollywoodwhohave passed away, including Katharine Hepburn; Spencer Tracy; Vivien Leigh (with whom Bowerswas involvedwhileshewasmarried to Laurence Olivier); Olivier himself, who was gay, according to Bowers; the Duke and Duchess of Windsor; director George Cukor; Cary Grant; Walter Pidgeon; Desi Arnaz (whose wife, Lucille Ball, confronted Bowers at a party, demanding he stop setting her husband up with other women); Noël Coward; Tyrone Power; Beatles’ manager Brian Epstein; J. Edgar Hoover (who reportedly dressed in drag when Bowers met him one weekend in the late 1950s); Errol Flynn; Cole Porter; Bob Hope; William Holden; William Somerset Maugham; Rock Hudson; Phyllis Gates (Hudson’s lesbianwife);MontgomeryClift, and James Dean, to name a few. Despite the host of names Bowers mentions, one can’t help but wonder: Did he — for one reason or another — leave anyone out? He debunks the myth of Katharine Hepburn and Spencer Tracy’s love affair, calling it a “nonexistent fairytale romance that the studio publicists and the spin doctors had concocted to conceal [Hepburn’s] lesbianism.” His take on the romance illustrates the power the studios had (and by all accounts still have) over their stars and the public. The author backs up his claim by revealing that, “in the course of time I would fix [Hepburn] up with over 150 different women.” Another example of the studios’ power is their ability to keep Rock Hudson’s homosexuality under wraps. His sexual orientation was, as Bowers writes, one of the “most closely guarded secrets in Hollywood,” until his death of AIDS in 1985. But Bowers claims that this type of fabrication extended past Hollywood and into Britain’s royal family. According to Bowers, the Duke and Duchess of Windsor were both gay, and their controversial love affair, which led to Edward VIII’s abdication of the throne, was simply a ploy to hide his homosexuality from the public. The fake love story is still believed today, and fans of Madonna’s 2011 filmW.E., whose premise rests on the notion that the Duke and Duchess had a great love affair, will no doubt be disappointed after reading Bowers’s book. Bowers ran a booming business. “In the height of my tricking days…I was setting up an average of 15 to 20 tricks a day. This was a 24/7 operation, extending over a period of, say, 30 to 40 years. As for tricks that I performed personally, I was often seeing two or three people a day,” Bowers writes. Throughout the book, he constantly reminds us that he never took money unless he performed the trick himself, calling his activities “match-making,” rather than pimping and insisting, “what really drove me was a desire to keep people happy. And the way I did that was through sex.” With business booming as it did, it’s a wonder the operation was never shut down by the police. Bowers was able to keep his so-called “match-making service” under wraps, despite the expansive network of people involved. But this wasn’t an easy feat, in large part due to the Los Angeles Police Department’s (LAPD) vice squad, which “mercilessly hounded members of the gay and lesbian communities.” Fear of the vice squad may have helped keep Bowers’s activities secret, as those involved would have dreaded the potential consequences if the police caught on. In 1950, Bowers considered discontinuing his service, in part because “the tricking business was getting totally out of control. The number of calls that I was receiving…became too many to handle.” But people continued to come to him for tricks, even after he left the gas station to become a bartender, and Bowers continued to set them up. Still, Bowers was “increasingly fearful of being busted by the ever-lurking vice squad,” and he thought the jig was up one night in the mid-’50s, when he was pulled over by an LAPD officer. However, much to Bowers’s surprise, instead of booking him, the officer brought Bowers to a secluded area, where he made a pass at him. Ultimately, Bowers put an end to the operation in the ’80s due to the spread of AIDS. But behind the gossip are a host of ethical questions. Bowers writes, “For whatever reason, people have always found me easy to trust.” But in writing this book, he has betrayed their trust, and it is up to readers to decide how much to believe. According to the author’s note, “This manuscript is based on my memory and, to the very best of my ability, reflects actual incidents and personalities as I recall them.” This is quite a disclaimer: The stories in Bowers’s book are only as accurate as his memory. And yet he writes with such authority about personal matters regarding people who have died and can neither confirm nor deny the allegations. If we’re to believe him, Bowers explains his motivation for writing the book accordingly, “I have always been reticent to reveal details about what I have done, mainly to respect the privacy of those whose lives have intersected with mine. But…over the years many people have told me to write about my experiences and share them with others…Now, as I take stock of myself in my twilight years…I feel compelled to share my story.” But is Bowers justified in revealing these secrets simply because the subjects have passed away? Or does he still owe them — and even their fans — the secrecy he promised when they were living? Or, is he doing some of these stars a service by revealing their true selves as he saw them? After all, in many cases the studios may have presented these stars falsely. Is Bowers’s motivation for writing this book truly, as he says, to tell his story? Or is it merely to make money? Perhaps it’s even a form of damage control, to avoid being painted in an unfavorable light if someone else were to tell his story first. No doubt, Bowers has crafted an interesting story, and if you’re a gossip hound, you’ll want to pick this book up. But in terms of literary value, or even historical value, this may not be a story that had to be told. SA Kiss and Tell: The Clandestine Sex Lives of Hollywood Stars B o o k R e v i e w

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SE P T E M B E R/ OC T O B E R 2 0 1 2 V I D E O • A G E 16 BY SARA ALESSI As usual, a few days after MIPCOM, film-TV buyers and sellers alike will head to Santa Monica, California, for the American Film Market (AFM) just in time for Halloween, looking to buy and sell treats in the form of movies. The upcoming AFM will be held October 31 through November 7 at its usual Loews Santa Monica Beach Hotel location. Last year, participants circulated a petition threatening to pull out of the market if the location was changed, as organizers considered switching the venue to downtown Los Angeles because they feared escalating costs at the hotel. But eventually a deal was reached that will see AFM return to Santa Monica through 2017. So, it should come as no surprise that everyone VideoAge caught up with was thrilled that the location isn’t changing (though some hoped the calendar date would). “That’s a no-brainer,” quipped Opus Distribution’s president, Ken DuBow from Los Angeles when asked if he was glad the venue hadn’t changed. He was happy “a deal was reached, which was good for everybody because one cannot imagine Santa Monica saying goodbye to the yearly influx of spending buyers and sellers.” From Toronto, Breakthrough Entertainment’s VP of Movies, Marina Cordoni agreed, stating, Santa Monica “is pleasant and convenient.” Multicom Entertainment’s Irv Holender doesn’t “want to see it move for a while,” adding, “We travel enough as it is.” Likewise, Vanessa Shapiro, EVP of Sales at MarVista Entertainment expressed her hopes that the market would not move in the future. “We would have adapted if they had moved the market to a different venue, but we’ve been very successful in Santa Monica because there’s a familiarity there,” added Larry Goebel, president of Imagination Worldwide. Holender, Shapiro and Goebel are all based in Los Angeles. The enthusiasm for Santa Monica seems to be reflected in the projected attendance for this year’s event. Two months ahead of the market, Jonathan Wolf, EVP of IFTA, the association that organizes AFM, told VideoAge, “It’s really early to forecast, but we expect attendance to be similar to last year, maybe slightly higher.” In 2011, around 750 acquisition companies and a little over 1,500 buyers, attended the market. Organizers expect over 400 production/distribution companies to set up shop this year. Asked about maintaining a good buyer to seller ratio, Wolf responded, “Ratio doesn’t matter. What’s important for a trade fair in any industry is that everyone is present — that all of the sellers know that they will reach all of the buyers by participating in the market, and all of the buyers know that they’ll see all of the product by participating.” AFM sees “strong participation from countries all over the world and mirrors the economic vitality of every country in the world,” Wolf emphasized. “We had a pretty good AFM last year and I’m hoping [this year] will be at least as good as last year,” noted MarVista’s Shapiro. Breakthrough’s Cordoni said she has “always found the AFM to be a beneficial market for [their] sales and acquisition objectives.” She was confident “it will be better this year for us, as we continue to build our film acquisitions catalog and launch not one but three new films for all rights worldwide.” Yet, as positive as Shapiro and Cordoni appeared, Opus’s DuBow was unsure. “The financial issues of Europe have made business very difficult in so many markets, not just one or two countries. Their rebound is key, so we will see.” Multicom’s Holender also had some reservations. “It’s very hard to judge with what’s going on with the economy and the industry. In the last few years, AFM sort of slowed down, not only in the selection of product, but as the DVD market declined and the digital market picked up, there seems to be a lag in the introduction of new product,” he said. Contributing to this uncertainty is the fact that, as Holender said, “We used to be able to pre-sell, but now it’s a lot harder because buyers want to see the finished product first.” But most everyone was in agreement that MIPCOM, which is held toward the beginning of October, doesn’t pose much competition for AFM, because different buyers often attend each market. “MIPCOM has a very minor impact on the AFM because the AFM is about long form, whether it’s features destined for theater, DVD or all forms of TV. The majority of the business done at AFM is done on films that have not started shooting or are in the early stages of production,” said IFTA’s Wolf. Of the approximately 450 films screened at AFM this year, over 70 will be world premieres. “A lot of buyers — like all-rights and DVD buyers — who attend AFM do not attend MIPCOM. They see the titles for the first time at AFM,” said Shapiro of MarVista. In, fact she finds the timing of AFM after MIPCOM to be beneficial. “Because the markets are so close, it gives the buyers who attend both a chance to make decisions and to close deals started at MIPCOM at AFM,” she explained. Breakthrough’s Cordoni concurred. “I can sense the crossover between film buyers and television buyers at markets, but I still find there to be distinct lines between the all-rights buyers that attend ‘film markets’ and the ones that cross platforms. Hence, there is still a need to be at both [AFM and MIPCOM].” The fact that the buyers are often different at each market, and that deals sometimes continue from one to another, allows companies to maintain much of the same slate for MIPCOM and AFM. This is necessary since, due to their proximity, it “doesn’t give [companies] much time to turn around and make a new slate,” as MarVista’s Shapiro put it. Most companies add just a few new titles in the weeks between MIPCOM and AFM. We at VideoAge wondered whether dwindling end-of-year acquisition budgets had a negative impact on business at AFM. Imagination Worldwide’s Goebel said, “It’s true that a lot of buyers get their annual budgets from January to December, but our experience has been that the vast majority of the buyers we deal with use their budgets wisely. And AFM is a major stop on the tour. I’ve never noticed buyers say they can’t buy a film because it’s November, and they need to wait until January or February to make the purchase.” But for some, dwindling end-of-year budgets were a bit of a sore spot. The market formerly took place in February, and Opus’s DuBow contends that February is still the better month for AFM. “I have never thought the movement of AFM from February to November was good business. It is simply a matter of how budgets are done. In November, it is the end of the year. More likely, at that point, a budget would be cut and certainly never added to for additional purchases.” He’s noticed that “The net result is Berlin’s growth and importance as a world festival and market stage.” Likewise, Multicom’s Holender “would like to see AFM in February, before MIPCOM. But then the arguments from some of the major companies come in that they have Berlin and other outlets during that time.” He also thought it would be a good idea to “consolidate NATPE and AFM. It would be great for American and Latin companies, and also other international companies, because the amount of money that could be saved would be tremendous.” Unlike DuBow and Holender, Breakthrough’s Cordoni believes “November is a good time” for AFM, and Shapiro of MarVista “wouldn’t know where” to move AFM, because the rest of the year is already jampacked with markets. Happy to be Back, But the Age-Old Calendar Question Looms A F M P r e v i e w IFTA’s Jean M. Prewitt, Rob Reiner, IFTA’s Jonathan Wolf A view from upstairs (Continued on Page 18)

SE P T E M B E R/ OC T O B E R 2 0 1 2 A F M ( C o n t i n u e d ) “Sales, especially in 2012, is a 24/7, 365-day-a-year business. We’re doing sales in May, September, March — it doesn’t matter what time of the year. But I think it’s important to have some face time with your buyers. Most of our buyers probably appreciate being able to come to Santa Monica in November, when winter is setting in their parts of the world,” said Imagination’s Goebel of AFM’s timing. “I know this has been almost an annual question that’s come up from some of the members, but we’re very satisfied with where it is,” he added. of digital media and sell through,” Shapiro added. With that messiness comes uncertainty, as Breakthrough’s Cordoni noted, “I am cautious of placing our movies on platforms that cannot offer us a case study of revenues.” In addition to the aforementioned screenings, organizers have planned a number of events to keep participants busy. The AFM Conference Series will be held November 2-6 from 9:15a.m.- 12:45p.m. daily. Topics will include finance, pitching, marketing, video-ondemand and micro-budget. For the Finance Conference on November 2, CEOs, filmmakers, financiers and studio executives will discuss the state of independent film financing, emerging trends, new opportunities and where the money can be found. Participants will also predict what the future has in store. The Pitch Conference will instruct attendees on the rules of pitching, and volunteers will pitch a panel, who will give feedback on each pitch, dissecting what worked, what didn’t, and explaining why. On November 4, the Marketing Conference explores the concept that the consumer can be the most effective marketing tool. Participants will learn strategies for winning the broadest possible audience. The Video-On-Demand Conference on November 5 will examine the growing source of revenue for content providers and filmmakers. The conference will look into who is making money off video-on-demand, how they’re making money and what may happen in the future. During the November 6 MicroBudget Conference, producers and distributors will share how to make the most of budgets, explain what distributors are looking for, and show how to reach the audience. Plus, the AFM Industry Conversations, which feature interactive discussions led by Hollywood’s thought leaders, decision-makers, experts and trendsetters, will return this year. Last year’s participants included Rob Reiner, Selma Blair, Kevin Pollak, Lauren Shuler Donner and Rodrigo Guerrero Rojas. This year’s speakers will be announced this month. So, are these sales patterns being influenced by technological advances such as streaming, mobile devices and VoD? The overwhelming answer was, “yes,” but the degree of change varies domestically in the U.S. and internationally. “Those rights don’t generate as much revenue yet internationally as they do in the U.S. In the U.S., it is changing the revenue model. Internationally, it is much slower,” said Shapiro. “The growth in North America has been astronomical compared to the rest of the world…We have definitely seen a downturn in DVD sales. It hasn’t really happened yet internationally. We’re facing a DVD world that’s declining and a VoD world that is growing slowly. We’re not seeing the same revenues we were able to make with DVD yet,” Goebel explained. Opus’s DuBow added, “Eventually, digital delivery methods will dwarf DVD sales. Every year it just keeps getting bigger.” And it all seems a bit messy, as “TV broadcasters want to protect themselves against mobile, and DVD buyers also want those rights because A view from the floor (Continued From Page 16) V I D E O • A G E 18

MIPCOM BOOTH #10.28 The Original Team XII TRIBES ENTERTAINMENT Presents an Ysé Brisson/Michel Zgarka High Concept/Prime Time TV Series. / Starring: Karen Strassman, Ysé Brisson, Natacha Régnier & introducing Elma Mehmedbegovic as Michelle Cruz / Producers: Albert Sagales, Michel Zgarka & Randy Bradshaw / Executive Producers: Nicolas Kanellopoulos, Henry Ong & Gary Marenzi / Coordinating Producer & Original Music Composer: Sacha Zgarka / Associate Producers: M.A. Nour-Eddin & Georges Leclère / Concept/Story line: Michel Zgarka / Main screenwriter & Head of Writing Team: Ysé Brisson / Writing Team: Julien Mutter, Jason Long & Michel Zgarka / Directors: Randy Bradshaw, Patricia Harris Seeley & Michel Zgarka / Production Managers: Doug Steeden & Marco Meere / Design & Visual Look: Shaddy Gauthier Cyr / Wardrobe creator: Samuel Maman / Post-production: Banff Center / Supervising Producer: Kerry Stauffer-Executive Director-Film & Media, The Banff Center / Line Producing company in France: Endemol Fiction. CREDITS NON CONTRACTUAL sign by: Samuel Maman In association with DIAGONAL TV, EDITUDES & GOLDEN MEDIA PRESENT

SE P T E M B E R/ OC T O B E R 2 0 1 2 V I D E O • A G E 20 This year, the Venice Film Festival (La Biennale), which ran August 30-September 8, included an improved segment, the Venice Film Market, held August 30-September 4 in a dedicated area on the first floor of the Excelsior Hotel in the Lido portion of Venice. The newly revamped market portion was headed by a French import, Venice Film Market director Pascal Diot. In an opening day interview with VideoAge, Diot reported that he was quite happy with the turnout: 220 distributors and more than 50 sales agents for about 1,000 total market attendees. The venue consisted of a lounge for operators to conduct meetings in an informal setting and a series of exhibitor rooms along a corridor nearby, as well as the Sala Incontri conference room, where seminars were held. For his first edition, Diot opted for a setting of pavilion/umbrella stands rather than individual stands in an effort to contain costs for exhibitors. Among the countries represented were Argentina, Russia, Israel, Taiwan and Italy with ANICA and several film commissions attending. France’s film umbrella association, Unifrance, did not receive sufficient time to change its stand from its traditional location at the Quattro Fontane hotel, also in the Lido, to the nearby market venue. It was pointed out that Diot was appointed in February and that most government and national umbrella organizations, such as Unifrance, need a full year to request the funds and plan the logistics to attend this type of event. The decision to move the Market dates to the first half of the Festival was due to the conflicting dates of the Toronto International Film Festival (TIFF), which took place September 6-16. Diot emphasized that he does not want to be in competition with TIFF, but rather complementary to it. In terms of the Market’s relationship with the Festival itself, Diot was said to have been working closely with new Festival boss Alberto Barbera to find ways to boost the business-end of the event. For instance, this year market buyers were allowed to attend all open press screenings. In addition, the number of films being screened was reduced from approximately 170 last year to 100 this year, thereby allowing movies to be screened more frequently. Venice Boosts Marketplace With A French Exec Import F i l m F e s t R e p o r t The Venice Film Fest’s red carpet area A seminar associated with the Market The Market lounge Welcoming reception Pascal Diot, director of the Venice Film Market And The Winner Is…. During the awards ceremonyheldonSaturday, September 8, the top trophy — the Golden Lion for Best Film—went toPieta, directed by Kim Ki-duk (Republic of Korea) and distributed by Next Entertainment World. The Silver Lion for Best Director was bestowed upon Paul Thomas Anderson (U.S.) for The Master, distributed in the U.S. and Canada by the Weinstein Company. The Special Jury Prize was given to Paradise:Faith by Austrian director Ulrich Seidl. The Coppa Volpi for Best Actor was awarded to Philip Seymour Hoffman and Joaquin Phoenix in the film The Master, and the Coppa Volpi for Best Actress went to Hadas Yaron in the film Lemale Et Ha’Chalal by Rama Bursthein (Israel). Some last-minute confusion marred the Fest’s conclusion when the recipients of the Silver Lion for Best Director and that of the Special Jury Prize were mixed up by jury president, American director and producer MichaelMann, causing actor Phillip Seymour Hoffman to ascend the stage three times — the last time to rectify Mann’s mistake.

V I D E O • A G E SE P T E M B E R/ OC T O B E R 2 0 1 2 22 The troubles in the Euro Zone are well known, even though one wonders why the euro continues to be strong against the U.S. dollar. In any case, the question remains as to the effect this financial and economical crisis is having on broadcasters in the zone, and in the wider European area. Jens Richter, managing director of Germany’s Red Arrow Distribution (formerly known as SevenOne) said, “It is undeniable that there is a great deal of uncertainty in the market right now, and that is for the obvious reasons we all know about, the economic difficulties, and the crisis in the Euro Zone.” Richter is also clear as to the consequences of these difficulties, “The effect is to make broadcasters very much more selective than they were in the past.” He added, “Once, it was not unusual for broadcasters to buy programming in bulk and, at the time they did the deal, not to knownecessarily where all of it would be scheduled. Now they buy very specifically for very specific slots. This means that, not only are they only looking for programming that they know will work well in the specific slot for which they are buying it, but also that they are only buying the number of episodes they need to fill that particular run.” Jane Millichip, managing director of Zodiak Rights, said, “Distribution has proved to be a more stable business than production in recent years as broadcasters have replacedcommissions with acquisitions, particularly in nonpeak areas of the schedule.” But she added, “When the economic crisis broke in 2008, the impact on production and broadcasters in Europe was immediate and dramatic. Broadcasters cancelled commissions and reduced budgets dramatically, but distribution was not so badly affected, and is not subject to the same boom and bust cycle as is production.” Richter took issue with this, insisting, “It isn’t just a case of having to fill schedules. The European television market is now fiercely competitive and local shows are almost always more popular than bought-in shows; broadcasters know that if they show too many imports they risk losing market share, and it is very difficult to get market share back again.” Richter also reported, “Acquisition budgets are under pressure, [but] if you have the right program that will work in primetime, there is still good money to be had. But, if you have a ‘could buy’ series rather than a ‘must buy’ series then prices are flat, and in some places, under pressure.” Both Richter andMillichip concurred that none of this has affected profits, with Richter noting that, “In 2008 we actually saw growth and we were not the only producer, distributor to experience that.” Millichip agreed, saying, “At Zodiak we have seen our business grow year on year, every year since 2008.” However, she admitted, “It is possible that the percentage growth might not be as large as it was before the crisis broke, but we are still seeing healthy growth and margins.” Maria Kyriacou, managing director at ITV Global Entertainment, also reported good sales. Ahead of MIPCOM, Kyriacou said she was, “in a buoyant mood with good sales and good prospects.” But her optimism was tempered by the fact that, “In Europe we have been seeing a change in buying patterns, rather than straight rises or falls in prices. For one thing, we have seen the rise of the smaller buyers, smaller pay services and new OTT services such as Netflix (which launched in the U.K. in January and Scandinavia in August), and these are outlets to which distributors are paying attention. But she conceded, “This makes windowing very much more challenging, but it is, of course, fantastic news.” But for all the feel-good factor on display, it is undeniable that the Euro Zone crisis is having an impact. Millichip noted a much more cautious approach among buyers, claiming, “The most dramatic effect of the economic downturn is that broadcasters are much more risk averse now than they were.” Richter also noted this trend, commenting, “As well as becoming much more selective, we have also seen a move, amongst some buyers, to ‘retro programming.’” Richter believes there are two main reasons for this. “First, broadcasters know these shows have worked in the past, and therefore feel confident that they will work again, and second audiences like the warm feeling that these shows give. They remind them of a time when they were less anxious.” Whatever the programming trends that are emerging as a result of the economic difficulties in which Europe currently finds itself, there is still the question of budgets. Millichip believes, “It is to the credit of the European production community that the quality of production has not dropped, even though budgets have to an extent.” In part Millichip attributes this apparent anomaly to the selection of cheaper formats, saying, “We have, for instance, seen the rise of the managed, and often scripted access driven documentaries at the expense of more complex formatted series.” And she also noted, “In the U.K. especially, there has been a noticeable move to the U.S. pilot system in factual, whereas, in the past, the tendency was to go straight to series.” Richter also notes a downward pressure on budgets, but pointed out that, “While it is true that budgets are under pressure, it is also true that television production budgets are not that flexible; there are some savings to be made for sure, but it costs what it costs to make a show and if you tell a German or a French producer that he has to make the same show as in the past, but with only half the money — he simply won’t do it.” That’s the state of European television at the moment; what the future might hold is difficult to assess. Yet Richter finished on an ominous note, “Advertising markets vary from one market to the next and in some markets, advertising is under a lot more pressure than others, but, I think it is fair to say that Europe as a whole had a pretty tough Q2.” BJ Distribution a More Stable Business than Production E u r o Z o n e C r i s i s Jane Millichip, managing director of Zodiak Rights Maria Kyriacou, managing director of ITV Global Entertainment Jens Richter, managing director of Red Arrow Distribution

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