Mixing syndication and international sales to make the right deal

In the more than 35 years since NATPE originated as a U.S. syndication event, succeeding in the kids syndication market has become increasingly difficult thanks to the emergence of a whopping number of networks and cable channels in the late `90s...
January 1, 1999

In the more than 35 years since NATPE originated as a U.S. syndication event, succeeding in the kids syndication market has become increasingly difficult thanks to the emergence of a whopping number of networks and cable channels in the late `90s going after kid viewers. These growing pressures on syndication are forcing producers, syndicators and distributors to turn more to international markets for business, with companies coming to NATPE with a wide range of deal models to get shows off the ground.

Growing the international side

DIC Entertainment has its eye on international markets and U.S. network and syndication outlets for the year ahead. Buena Vista is distributing its upcoming Sabrina: The Animated Series, produced in association with Paula Hart and Hartbreak Productions, to UPN for fall `99, as well as handling international distribution. At press time, DIC was also negotiating a syndication deal for Sherlock Holmes in the 22nd Century, co-produced with Scottish Television Enterprises, and Archie’s Weird Mysteries, co-produced with Le Studio Tex and another possible French partner and based on the well-known comic books.

Although the pending deal does not have a major advertiser on board, Robby London, executive VP, creative affairs, says advertising support is ‘virtually essential’ to make a kids series work in syndication. DIC’s Extreme Dinosaurs, handled by Bohbot Kids Network (BKN), had the support of Mattel, Hasbro signed on for Mummies Alive!, initially handled by Hasbro-owned Claster Television and now by BKN, and syndicator The Program Exchange brought in General Mills for The Wacky World of Tex Avery. These big ad budgets not only provide barter revenues, but can also act as leverage to obtain clearances and better time slots.

With two kids series on networks (Men in Black on Kids’ WB! and Godzilla on Fox Kids Network) and two programs in syndication in the U.S. this season (Jumangi, which premiered in syndication this fall after a two-year run on UPN, and the second syndicated season of Extreme Ghostbusters), Columbia TriStar Television Children’s Programming is coming to NATPE to drum up international business, primarily for its fall launches, says Sander Schwartz, executive VP and general manager. By NATPE, he is able to tout the performance of the new shows over the past four months and present 13 or more episodes, as opposed to the one or two ready for MIPCOM. Recognizing the growing amount of business done with international clients at NATPE, Columbia TriStar International Television took a separate booth at the event for the first time last year.

Columbia TriStar is also producing the 40 x half-hour Bug Wars: A Starship Troopers Adventure for BKN for fall `99 (BKN is distributing Jumangi and Extreme Ghostbusters in syndication this season). A smaller share of Columbia TriStar’s activity at NATPE will include assisting BKN in its meetings with stations.

The Television Syndication Company’s business at NATPE has continued to shift from domestic to international. While the company once made its money from U.S. syndication and considered any additional revenues from international markets as ‘gravy,’ says Robert Yde, director of marketing at The Television Syndication Company and president and executive producer at White Mountain Entertainment, its business model has shifted to just 30% of business from the U.S. and Canada and the remainder from overseas. NATPE serves as an opportunity to meet foreign outlets and potential co-production partners, as well as domestic outlets.

Sweetening the pot at home

For the share of its business that comes from U.S. kids syndication, the difficult market has forced The Television Syndication Company to become much more tailored to the needs of individual stations, says Yde. In some cases, the company offers stations the opportunity to share in revenues generated by merchandising as an incentive to pick up shows. The company is also in the process of redesigning an on-line presence ( for the syndicated Reel Planet, which houses an on-line store carrying merchandise.

The Summit Media Group extends promotional support as a way to attract stations. This year, Summit is distributing the children’s series War Planets, Voltron: The Third Dimension and Pokémon in syndication. For Pokémon, Summit and Nintendo spent US$750,000 in on-air promotions with stations airing the show behind the series’ launch this fall, says CEO Shelly Hirsch. U.S. syndication is still the bulk of Summit’s television distribution business, with domestic business supported by additional revenues from licensing and merchandising.

Hearst Entertainment, on the other hand, leaves most promotion to stations, but does support Popular Mechanics for Kids, which it produces with SDA Productions in Montreal and distributes in syndication, with a Web site, and Popular Mechanics provides a yearly introduction to the show in the magazine. Hearst is bringing the show back to NATPE to sell season three, and the company is looking to close about a quarter of the station deals at the event.

Hearst is filling a demand in kids syndication by supplying shows that satisfy stations’ obligation to air at least three hours of educational kids shows a week. Syndication was chosen for FCC-friendly Popular Mechanics for Kids because the show features ‘a lot on the screen,’ says Robert Corona, senior VP of domestic sales, and the ‘sizeable budget’ would make it difficult to recoup enough revenues from a cable deal. Still, barter revenues contribute only a portion of the budget, a portion that’s been shrinking as the kids syndication business has grown tougher over the last four years since the co-producers began planning the show. International sales and licensing and merchandising, including toys, videos and CD-ROMs, are necessary to support the series.

Approaching the U.S. from abroad

For Montreal-based Telescene Film Group, breaking into the U.S. kids syndication market requires a two-pronged strategy. ‘We search for a need, and we associate ourselves with important distributors,’ says Michael Yudin, executive VP. The latter is particularly important to make headway with stations since most of them are affiliated with a major network. For teen-targeted Student Bodies, Telescene brought the show to Twentieth Century Fox Television because it knew Fox was seeking a teen series to distribute in syndication. The half-hour show airs Saturdays between noon and 1 p.m. in more than 90% of the U.S., and Fox is bringing it to NATPE as a strip for fall `99.

Being based outside the U.S. can also catch the eye of a foreign outlet, be it a syndicator, network or channel. Canadian provincial and federal tax incentives make a show less costly to bring to the table.

With two series slated to launch on Fox Family Channel in March, Big Wolf on Campus and Misguided Angels, as well as the syndicated Student Bodies, Yudin is eyeing NATPE to fill in the 50% of the series budgets he looks to come from outside the U.S. The Fremantle Corporation is handling international sales of the Fox Family series, and Sunbow Entertainment is distributing Student Bodies internationally. Yudin anticipates that when it moves to a strip, Student Bodies will generate more revenues from the U.S. syndication market, upping the ratio of syndication revenues from half to two-thirds.

U.K.-based distributor ITEL has taken the public television route toward the U.S. kids syndication market. Commercial syndication, which is ad-driven and has tended to be dominated by boy-targeted action-adventure programming, was not a suitable home for its primarily preschool series. Hollywood Ventures, in conjunction with APS, began syndicating Cosgrove Hall’s Oakie Doke and Telemagination’s Wiggly Park as part of its Someday School preschool block this season. The block airs once a week, but Hollywood Ventures is looking to strip it next year.

Joe Kennedy, VP of North American sales and programming at ITEL, believes that public television syndication for kids shows is as difficult as commercial syndication, considering that some producers are willing to give shows to PBS to reap the merchandising benefits of reaching the large PBS viewership. ‘We don’t have any false expectations of generating a huge amount of money in public television syndication out of license fees,’ says Kennedy. ‘What we’re trying to create is a certain level of exposure in order to drive the merchandising side of it.’ Oakie Doke, a series of 26 x 10-minute episodes, has some merchandising items available that have been produced in the U.K., but the show does not have a large enough audience yet to approach retailers. ITEL is beginning to use a Web site to offer some products. Since the 26 x five-minute Wiggly Park is perceived more as interstitial programming in the U.S., ITEL has no plans to explore merchandising at this time.

Because most U.S. syndication requires finished shows, the risk for ITEL is in deficit financing a share-generally ranging from 30% to 50%-of the budget. The company has worked out deals for U.S. syndication by taking an advance on back-end revenues generated by the syndicator or by working with a syndicator in a joint venture to split costs and revenues, meaning that ITEL carries the risk that much longer.

As well as the U.S., international markets will be a major focus for ITEL at NATPE. For the first time, ITEL will have all of its territory reps at the event, and will be exhibiting in its own booth.

Tapping into an opportunity in

the Hispanic market

In a niche-geared effort, Children’s Animation Television & Syndication (CATS) is going after the Hispanic children’s syndication market in the U.S. CATS aired a Spanish-dubbed version of the puppet series Down at the Zoo (renamed La Isla de Jordan), produced by Summit Productions in Texas, on 34 Spanish-language stations on Sunday mornings in 1997-98. The show cleared 80% of Hispanic households in the U.S., and although CATS didn’t break even, the effort convinced Bob Syres, president of CATS, that there’s an opportunity for companies other than the Telemundo and Univision networks to succeed in the Spanish-language market. The rights for La Isla de Jordan have expired, and Syres will be looking for completed, educational children’s series at NATPE to acquire the U.S. rights for dubbing into Spanish.

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