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ANIMATION WORLD MAGAZINE - ISSUE 4.2 - MAY 1999

The Concerns of Europe from MIPTV

by Paco Rodriguez

This year, the MIPTV market was marked by the strong marketing presence of the Munich-based German company EM-Entertainment with its joint venture involving the Kirch group: 24,000 half hours of children's programming with the brand name of Junior. The marketing started at Nice Airport! Branding is now the key to the children's arena and EM aims to establish itself as one of the leading worldwide companies in animation production, distribution and merchandising. The deal with Kirch is based on the acquisition of 50% of Kirch's key children's programming library for a cost of US$ 279.8 million. It was financed through a combination of debts and equity, and includes the handling of TV distribution, merchandising rights, and the running of the Kirch Children's pay-TV channel Junior, which is broadcast on the DF1 digital platform.

The second outstanding piece of news was the non-participation of Disney, who did not have a stand at this MIPTV edition. It seems that the Midem rates are too high for such a company, or that they don't need to come to this kind of event. Rumors continue to spread about the future status of other Hollywood studios. The main issue being the cost of sending everyone to Cannes, as well as the timing.

A New Slate of European Programming
In France the production of animation continues to florish. Very active companies such as Millimages (Talis and the Thousands Tasks), Alphanim (Spaced Out), Dargaud/Marina, and new comer Xilam with veteran Marc du Pontavice, continue to strike co-production deals with overseas companies for new Lucky Luke shows. Foreign invesment represented 47% of overall budgets compared to 43% in 1997 and 40% in 1996. TF1 (FF 93 millions) and France 3 (FF 83 millions) are the main engines in term of financing French animation. Arte, a newcomer, has commisioned 11 hours of adult animation in 1998 as well.

240, The First Hero of the Third Millennium , one of the series sold at MIP, is a unique look at the future. © Cromosoma.
Within the Spanish arena, Cromosoma from Barcelona has closed a co-production deal with Alphanim from France and Manga Entertainment in the US. The contents of the series (26 x 30'), titled 240, The First Hero of the Third Millennium, is following the adult animation trend that was initiated a few years ago with The Simpsons and now South Park. Cromosoma will also co-produce Space Out with the same French company. It is good for the Spanish sector to know that their companies are in tune with the lastest trends, such as the growing acceptance and expansion of animation into primetime for older audiences and adults. PPM Multimedia is closing a deal on the co-production of 26 new episodes of the already established series Koki with CTW and other different partners, as well as renewing for a second season the Snailympics series with Truca Films, La Cinquieme, Teletoon, Megafun and Canal 9. Neptuno Films brought a new series concept titled The Gravediggers's Squad to the market.

In Italy, investment quotas were introduced last year (20% of the license fee from RAI and 10% of net advertising revenues from commecial stations must be invested in local or European productions). While this might benefit animation, the recent restructuring of RAI may affect the broadcaster's commitment toward animation. Only 5 projects have been completed since 1995 when RAI decided to stimulate local animation (Lupo Alberto, Sandokan, The New Adventures of La Pimpa, GB & W).

The Brits are keeping up with their traditional strengths like pre-school series and specials. ITEL has been concentrating its marketing efforts on Foxbusters (26 x 11' for ITV) and 64 Zoo Lane (26 x 10'). Cascade is launching Upstairs and Downstairs Bears (with Egmond and Cinar Europe). More bears were brought to the market by Link Entertainment with their Teddy Bears (26 x 10' with United Production), and new pigs arrived as well with Preston Pig (26 x 7' with Varga tvc). EVA Entertainment, under the new ownership of Pearson, is launching Hilltop Hospital and the adult animation series Rex the Runt. Granada Media has been pre-selling the preschool animation series Yazoo Wazoo. United Production is looking to follow-up on The Worst Witch, a co-production with Canada.

Germany has become one of the most difficult markets to break into. There are relatively few slots available in German TV. Nickelodeon stroke a programming output deal with RTL, and SAT 1 is a mix of Pingu, Connan, James Bond Jr. and Lassie.

A European Federation
FEPA, a European federation of animation producers, has been set up. At a European level, six countries have set the groundwork for the first European Animation Producers Association, which will be headquartered in Madrid, Spain. The UK, France, Spain, Italy, Ireland and Denmark agreed upon the common interests of European animation producers that should be effectively represented in Media II and the forthcomming Media III program. Cartoon, the animation arm of Media, does not have any political power and influence anymore. It mainly exists to organize events such as the Cartoon Forum and Cartoon Masters. However, one of the aims of the Federation is to support the continuity of the Cartoon Forum which has contributed largely to the development of European animation.

The main concern of the Federation is the rising large number of US kids networks within the European playground. The second concern is the resulting unbalanced situation of certain countries (UK, Spain, Italy, etc...) vis-a-vis other more supported and subsidised countries (such as France, Germany), which have succeeded in reinforcing the animation sector. At a European policy level the unification of a similar system within the EU should be implemented and the Federation will aim for that, mostly taking into consideration that MEDIA III is on the verge of being established. A few steps forward will be taken in the next few months at the European Audiovisual Commission once the recent leadership crisis is overcome and new commisioners are designated. The Television Sans Frontiere directive is being followed slowly by reluctant countries such as Spain. New support programmes might come up to tackle the lack of stability within the children's market; it's a rapidly changing field. There are changes every month and there hasn't been a period of stability in the past five years.

The third concern is about the decreasing investment in animation by the big broadcasters. An unbalanced situation has been created: on one side, the free TV networks are slowly lowering their investment, while the kid specialised networks do not yet have the resources to enter into co-production deals. On the other hand these outlets are our new sources to place animated shows within a more and more segmentized audience with lower licensing fees, while production costs keep going up and budgets (investments from broadcasters) are being cut more and more. This fragmentation and the rising competition continue to create a huge challenge to get animated series financed, produced and broadcast. The emergence of videogames, computers and the Internet continue to erode the animation marketplace. The presence of computers and related products are mostly influencing older kids, posing more of a threat to home video sales. The Federation is also concerned about the impact of digital free television on animation investment by the major broadcasters. The major broadcasters will have to pull financing to upgrade technology to the detriment of new investment in animation.

PPM MultiMedia took Snailympics to MIPTV99. Image © and courtesy of PPM MultiMedia.

The Children's TV Invasion: Public and Private Free Networks
The cable and satellite launches of new US kids channels such as Disney, FoxKids, Cartoon Network and Nickelodeon are starting to produce some effects within the animation sector. This could be foreseen from different perspectives depending on where one stands. The nay-sayers foresee a gloomy future for the sector. Are these channels going to broadcast, run and rerun old libraries as Cartoon Network does? Are they going to co-produce European animation, or does the European Commission have to force them to do so? In France, French Canal J has been involved in quite a few co-productions after more that 10 years in existence. In 1998 theme channels have improved their investment, mostly spurred on by the launch of the Disney Channel and Teletoon. In the UK a similar trend is taking place with Cartoon Network and Nickelodeon taking the lead.

In Spain, no real interest in investing in new animation has been spoken of by any of the new channels running here (Cartoon Network, FoxKids, Nickelodeon). Moreover a local kid channel has been sustituted by FoxKids within the Canal Satelite Platform. License fees are very low as well, which upsets Spanish library owners. In Germany, rather than investing in animation, Nick closed down last year. However Disney is still aiming to establish a new German Disney Channel, so there lies hope. More positive industry members think that the tiny US kids networks will boost animation production in Europe. Cartoon Network has already started to localise its channels, looking for local content to attract national viewers. These channels will probably combine shows with local content, based on the local culture, in order to match local children's needs.

The organisers of the next Cartoon Forum still have some concerns about inviting US buyers to the Forum. `Why not?' keeps saying Andrew MacBean of ITEL. Considering that they are buying more European programming now, new oportunities are opening up in the US, especially since they have few kids channels operating all over Europe (Disney Channel, FoxKids, Nickelodeon, Cartoon Network).

Paco Rodriguez is Managing Director of PPM MultiMedia, a Madrid, Spain-based production and distribution company. He is also the President of AEPA, the Association of Spanish Animation Producers.


Note: Readers may contact any Animation World Magazine contributor by sending an e-mail to editor@awn.com.