NATPE 1999: Tons of Product But No Air Time

Bill Hutton, president of the Valencia, California-based animation company Encore Enterprises, thought he had the syndication game pretty well figured out. Twenty-six half-hours of his company's signature series, The Chucklewood Critters, had already been sold to 20 countries, and the fact that it had been pre-distributed to 65% of the United States made him think the rest of the country would soon follow. Licensing deals, second season renewals and kids across the nation humming the Chucklewood theme were all dancing in his head. It didn't work out that way, however. "We weren't able to sign Los Angeles," Hutton explains. "That meant our ratings wouldn't have reached our promised level so we would have had to provide give-backs to our advertisers. The numbers just didn't work. Now we'll try for a direct sale to U.S. cable, but even that's very tough." Hutton had learned the hard way the reality of the new U.S. kids television marketplace. Oh, That Vertical Integration Syndication as we once knew it is dead. Just look around the floor of this year's NATPE television conference, held this past January 26-28 in New Orleans. One-time syndication big shots Disney, Warner Bros., Worldvision, DIC, King Features, LBS and Turner are either out of the distribution business altogether, or are part of a vertical integration network of a large cable or broadcast channel. What happened? With the proliferation of so many kids channels, ratings and ad dollars have dwindled to a point where many stations can't afford a kids block of their own. New cable networks like WB and UPN, which want to be in the kids business, have exclusive arrangements with their sister companies, leaving little room for independent suppliers. The few remaining syndicators seem to be dropping one by one. Just before NATPE began Claster Television took Beast Wars and Beast Hunters out of syndication and sold them to Fox Kids. Likewise, Summit Media, took its animated kids series Pokemon off the syndication block. Summit had intended to syndicate it as a strip next year, but instead decided to sell it to Warner Bros., which will put it on its Kids WB! network. "Pokemon is the number one kids show on television but we looked at 1999-2000 and couldn't see anywhere to go but down," explains Summit CEO Shelly Hirsch. "A lot of our time slots were going to be downgraded because of the Disney-UPN relationship, because of Sinclair's [a large group of stations] deal with Bohbot, because of Fox giving back an hour to their affiliates. In addition to WB, we were approached by Nickelodeon, Fox and the Cartoon Network. We were looking for a certain price and we got it."

More Networks, More Library Use

On the surface, one would think that any drop in demand from the syndication marketplace would be more than made up for by a slew of new cable outlets. This year alone will see as many as a dozen new 24-hour kids and family cable services - HBO Family, Odyssey, Noggin, Toon Disney, and Fox's Boyz and Girlz channels, to name just a few. Turner is also preparing to launch a second version of the Cartoon Network in the fourth quarter of this year, and in July the Public Broadcasting Service will launch a digital network, PBS Kids Channel. Yet all these channels will, at least at the outset, get almost all of their programming from their own libraries. They consequently attended NATPE as sellers, not really as buyers.

"Domestically, almost no one is truly looking for animation," says Hutton. "There's tons of product but no airtime." The second Cartoon Network (in some circles called the "Scooby Doo Channel"), for example, will likely be even less open to outside suppliers than the original. In a purely economic decision, it will be an outlet for the network's huge library of Warner Bros., Hanna-Barbera and MGM animated product already sitting on its bookshelves. New Growing Markets Indeed, NATPE's Animation and Licensing Pavilion, which appeared much less lively than last year, saw a drop in exhibitors from 26 in 1998 to 24 this year. Overall, attendance from U.S. companies actually dropped, but that was more than offset by an increase in international buyers and sellers. The real jump came in the participation of new media companies, which almost tripled, from 220 to 602. In the most vivid evidence yet that the traditional syndication process has truly been stood on its head, Kaleidoscope Media Group brought to NATPE the two-hour animated thriller, Gravity Angels, which already had had its original window on the Internet. Now it was looking to broadcast television as a secondary market. Ironically, Kaleidoscope's CEO Henry Siegel used to be chairman and president of the once bigtime syndicator, LBS. For most independent animation suppliers, therefore, the real action at NATPE is selling to international outlets. UPN's new primetime animation series, Dilbert, had the good sense to premiere with excellent reviews and ratings on the eve of NATPE's opening, sparking tremendous international interest. They've Done It By Jove The California-based Films By Jove, exhibiting at NATPE for the first time, was offering nine volumes of Mikhail Baryshnikov's Tales from My Childhood. Produced at Moscow's renown Soyuzmultfilm Studio, Jove redubbed the series with the voices of recognizable American actors. At NATPE it was licensed to five territories in Europe, Asia and Latin America.

Jove is also one of the very few distributors to have been able to place its serious animation fare on U.S. television. Its "Masters of Russian Animation" series, featuring such famed animation directors as Yuri Norstein and Eduard Nazarov, airs on the cable channels, Bravo and the Independent Film Channel (IFC). Jove president Joan Borsten says the airings have sparked widespread interest in the films on home video, helped by Jove's 800-number that is flashed on the screen during every TV showing. "We had zero expectations, but the video orders never stop," says Borsten. "It's not just animation fans from New York or Los Angeles. We're getting doctors and lawyers and people from Montana and Arkansas. And according to our telephone records, 25% of our telephone orders come in between midnight and 6 am. What's that all about?"

Looking Outside the U.S.

International animation companies also use NATPE to sell their production services. Vancouver's Bardel Animation has used NATPE this way to considerable success, as an ideal forum to meet with their co-production and licensing partners. Hungary's Varga Studio signed a deal with Warner Bros. Television to produce 7 x 22 1/2-minute episodes of Baby Blues for the WB network. At this year's NATPE my own company, Rembrandt Films, concluded an agreement to produce a new prime-time animation series at Zagreb Film in Croatia, part of that famed studio's resurgence.

But while the United States is currently pretty much a wasteland for independent animation companies, Summit's Shelly Hirsch hasn't lost hope. "Terrestrial stations have shot themselves in the head," he says. "BKN just has retreads. (Why try something that has already failed?) As for Disney, they are not even giving UPN their best product, and a lot of material has already run on ABC or Nickelodeon. After this doesn't work, stations are going to be desperate for programming that will perform for them. The next big idea is going to come not from a big studio, but from a little guy. It always does." The emphasis on international buying and selling hasn't changed NATPE in certain ways, of course. The usual array of celebrities and circus events were out on the floor, everyone from Dan Aykroyd to Vanna White and free virtual reality arcade games to the famous "butt sketcher." Bourbon Street didn't disappoint either. Joan Borsten's after-hour highlight was catching beads thrown from a balcony by the unlikely pair of Howard Stern and Jerry Seinfeld, as they tried to lasso women and encourage them to bear their breasts. Some things will never change. Adam Snyder is President of Rembrandt Films, producer of Nudnik and Friends, which is distributed by Sunbow Entertainment. Rembrandt is also the exclusive distributor of many other cartoons, including the entire animation library of Zagreb Film.