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Time Warner Inc
Central European Media Enterprises Ltd
Much as Americans two decades ago tuned in to The Wonder Years for a glimpse at simpler times, Russians are waxing nostalgic for the late communist period with The Eighties, a coming-of-age comedy that pokes fun at banned Western music, cabbage soup, and the need to boil laundry. “For those who lived in communism, you can see and remember the crazy stuff that happened,” says Maria Smirnova, general manager at Sony Pictures TV Productions Russia and the show’s executive producer. “Kids who didn’t grow up then can see what it was like.”
The Eighties, which has also been sold to broadcasters in Ukraine, Latvia, and Estonia, is one of a growing number of shows being made behind the old Iron Curtain and also aimed at export markets. As the purchasing power of Eastern Europeans grows, TV series producers, including Sony (SNE), Amsterdam-based Endemol, and Time Warner’s (TWX) HBO, are creating more original programming in Eastern Europe to give locals an alternative to their standard fare of imported cop shows and soaps. And the new programs can be sold to pay-TV operators and broadcasters in other European countries and even exported to the U.S.
Pay-TV subscribers in Eastern Europe rose 16 percent from 2005 to 2010, according to researcher Informa Telecoms & Media. In western Europe, subscribers climbed 8 percent; in the U.S. they fell 1 percent during the same period. While satellite and cable revenues in Eastern Europe were only about $8.3 billion last year vs. $30.2 billion in western Europe, Russia’s Tricolor TV is the Continent’s fastest-growing pay-TV provider, with about 9 million subscribers in its fifth year of operation, says Nick Thomas, a media analyst at Informa in London. Producers, attracted to the region’s fast subscriber growth, are also drawn to the Czech Republic, Hungary, and Romania to capture tax breaks and subsidies, and take advantage of costs that are about a quarter of those in western Europe.
The new programming touches locals in ways that imported, dubbed shows cannot. Sony’s The Eighties offers up a light-hearted take on things like smuggling jeans and procuring a live fish for dinner, no small task under communism. Endemol has produced Made in the USSR, a show about a Russian family set in the 1970s. In Bulgaria, Prague-based Central European Media Enterprises (CETV) is broadcasting Seven Hours Difference, a drama about a former communist-era secret service agent.
In the Czech Republic, HBO in January aired its first original miniseries from the region, Burning Bush, focusing on events after a Czech university student set fire to himself to protest the 1968 Soviet invasion. “Communists stayed away from TV that was more intelligent and ambitious—and it’s remained that way until now,” says Agnieszka Holland, a three-time Oscar nominee from Poland who directed Burning Bush. “People don’t want only stupid comedies. There has to be a balance.”
Local shows not only resonate with domestic audiences, they’re also more popular than imported programming with advertisers. They can offer additional ongoing revenue if sold on DVD, streamed online, or exported to neighboring countries or farther afield. HBO, for instance, aims to show a subtitled version of Burning Bush in the U.S. and later offer it on its streaming service, HBO Go. The series “makes commercial sense,” says Antony Root, executive vice president of programming and production for HBO Europe. “We’re making ourselves more attractive to subscribers.”
Eastern Europe is aiming to emulate Scandinavia’s success in exporting local-language TV shows. Denmark’s Borgen, a series about the country’s first female prime minister, has been shown in the U.K., France, and Germany, and the Danish crime drama The Killing was remade as a series in the U.S. Endemol, the world’s largest independent production house, has developed local content through a joint venture in Moscow. The concept for its The Real Life, a Russian reality show featuring true stories of loss and betrayal among family, friends, and lovers, has been sold to companies that make local versions in Poland, Lithuania, and Kazakhstan. Endemol is now aiming to export Caramel, a drama about a Russian girl who can hear men’s thoughts.
At Central European Media, Chief Executive Officer Adrian Sarbu says his company’s original series are more successful among audiences than foreign productions. CME, which is co-owned by Time Warner, has also shot films in Romania such as Gypsy Heart, about intolerance against the Roma population, and Lara’s Choice, a Croatian soap opera broadcast across the region. Rights for those programs have been sold in the U.S., the Middle East, and Latin America, Sarbu says. “We produce fiction and reality and entertainment for a fraction of the production cost of studio content,” Sarbu says. “It’s not HBO that invented the wheel out here.”
The bottom line: Global production groups are creating more shows for Eastern Europe’s $8.3 billion pay-TV market and selling them abroad.