Broadcasting Telecasting (Apr-Jun 1957)

BROADCASTING TELEC ASTI N G Vol. 52, No. 18 MAY 6, 1957 THE FOREIGN MARKET FOR TV FILMS It could mean 40% of sales in next five years, syndicators say AMERICAN television film distributors in increasing numbers are turning to the world as their marketplace for "Operation Future." This is no present gold mine, as some are finding out. But most companies which have begun to mine it are breaking even and a | few have pushed their foreign syndication division into the profit side of the ledger. In the footsteps of the motion picture industry, which has developed overseas business to substantial proportions, television i distributors are building a foundation for ! the future to accommodate the inevitable growth of the medium abroad. Informed 1 estimates indicate that about 50% of the motion picture industry's overall gross revenue accrues from out-of-the-U. S. release. A consensus of major tv film distributors is that the overseas market will account for about 40% of gross revenues of their syndication business within the next five years. Present revenues from foreign distribution are far short of that, but distributors hope that within the next five years, global tv will ' mushroom to a sizable proportion and some of the existing roadblocks to U. S.-foreign business intercourse (detailed below) will have been eliminated. Figures on gross revenues and net profits ) of overseas business by film distributors are not easily obtainable, but it is reasonable to accept the appraisal of Leslie Harris, vice president and general manager of CBS-TV Film Sales, when he asserts flatly: "At present a foreign film sales operation is lucky ; to break even." Some distributors said there is "a slight margin of profit," but their main objective in placing stronger emphasis on overseas business appears to boil down to this: • To provide a cushion — or a backstop — to film users in the U. S. by making additional revenue available to syndicators so | U. S. prices may be maintained at current i levels. • To upgrade program levels for U. S. adj vertisers outside the U. S. and give them i programs which have proved their worth in competitive U.S. markets. • To build up a market for the future when circumstances may be more favorable. • To improve the sales picture abroad for both U. S. and foreign advertisers, and thus contribute to the reputation of tv film as an advertising medium^ • To help build foreign tv set sales by use of U. S. stars as box office attractions. Implicit in the latter goal is the acknowledged minuscule tv audience abroad, judged by U. S. standards. Though figures on sets in use are neither complete nor accurate in | Broadcasting • Telecasting all countries, a recent survey by Television Programs of America placed the number of receivers in Europe at about 10 million, of which nearly 8 million were in Great Britain. Total number of sets in Latin America is reported to be about 1.3 million. The dearth of television sets is by no means the most formidable obstacle looming on the foreign tv horizon. A gradual expansion in set ownership undoubtedly will result, much in the pattern of other new technological developments, but among the more pressing considerations confronting U. S. distributors of tv films are: • The high cost of dubbing for the nonEnglish-speaking audience. • The requirements of many countries Inc., for his evaluation and commentary. Mr. Michelson for more than 20 years has distributed radio programs to foreign markets and currently is serving as a representative for various tv stations in foreign countries, but is not a film distributor. Together with his father, Aaron Michelson, he was active in the general exporting-importing business before turning to broadcasting and is an acknowledged specialist on marketing and exporting conditions abroad. Mr. Michelson agrees with the large number of distributors here who view the world market as an expanding one in years to come, but believes the estimates of up to 40% of total gross volume in five years are "highly enthusiastic." He does not be TYPICAL of U. S. film series getting exposure in other countries is Television Programs of America's Hawkeye and the Last of the Mohicans, shown here on location at Pickering, Ont. It is now on 115 U. S. stations and this fall will be shown in French and English versions in Canada on the Canadian Broadcasting Corp. Coming: syndication in England (through Incorporated Television Programmes) and in Australia. It will be dubbed in Spanish later this year. that payment be made in their currency and left within their borders (so-called "blocked currency") or other forms of payment restrictions, such as a certain dollar allocation for foreign film products. • The low price the foreign tv stations can afford for tv film programs. • The existence of quotas (most of which are unofficial) restricting the percentage of total programming on a station which can be "foreign" (which universally means U. S.-produced and distributed) . Despite these discouragements, U. S. tv film distributors reported they will continue to woo the world market, describing present adverse factors as "temporary disadvantages" and pointing to the potential growth of the future. To obtain as "impartial" an assessment as possible of the tv film outlook abroad, B«T asked Charles Michelson, president of Charles Michelson lieve tv film can be compared with the motion picture business, in which revenue is obtained through paid admissions. His more conservative guess was that, based on current progress, gross revenues abroad would bring in about 25% of the total gross in five years. Mr. Michelson reported there are several approaches film companies can take concerning blocked currency regulations. U. S. organizations, he said, may elect to produce tv film products in the country in which its assets are "frozen" (as some producerdistributors are doing); they may invest these funds in foreign stocks and accumulate dividends, available in dollars, or they may keep the money in the country in the expectation that these regulations may be lifted. He noted these regulations were implemented after World War II because the May 6, 1957 • Page 27