If you produce faith-based media projects, you might be interested in today’s story in the Wall Street Journal about media opportunities opening up in Eastern Europe. The story focuses on secular media, but it’s fascinating to see the companies expanding into these former Soviet markets. Change is happening there at light speed, and this could be a great opportunity.
The commercial production industry has long known about the production opportunities in Prague, and has been taking advantage. Now, every aspect of the media business is expanding in these countries.
If you’re a church, ministry, or other religious media organization, is your media buyer presenting you with information like this? One the greatest frustrations I hear from various media ministries is that media buyers present them with “avails” (available time slots) on various networks and stations, but supply very little actual strategy. “Why should we be in that slot, or on that station?” “What media research supports this decision? “Who’s watching and why?”
A successful media ministry isn’t just about producing an effective program and then getting on the air. It shouldn’t be random. It needs to be thought out and strategized, with solid reasons for the decision – whatever it might be.
In case you’re interested, here’s the article:
Eastern Europe Becomes a Hot TV Market as Firms Snap Up Properties
By AARON O. PATRICK – October 16, 2006
After years of false starts and sputters, the race is accelerating among Western media companies to grab television properties in Central and Eastern Europe.
Since April, News Corp. has invested about $150 million in TV stations and licenses in Serbia, Georgia, Poland and Turkey to add to its operation in Bulgaria. It is currently negotiating to buy in Latvia, according to a person familiar with the situation. A News Corp. spokesman declined to comment.
RTL Group, based in Luxembourg, is in negotiations to purchase a TV station in Poland to add to its stations in Russia, Croatia and Hungary, according to a person familiar with its plans. An RTL spokesman said no announcement on an acquisition was imminent. Separately, RTL last week increased its stake in its Croatian TV station to 74% from 65.5%.
And SBS Broadcasting SARL., a Luxembourg-based company controlled by two U.S. private-equity funds and a Dutch newspaper group, is looking for acquisitions to add to its stations in Romania and Hungary, according to a spokeswoman.
The interest is being driven by an advertising boom and a belief that the industry isn’t as risky as in the past. From the Baltic Sea to the Balkans, television advertising is being driven by multinationals like Procter & Gamble Co., Renault SA and Microsoft Corp., which want to market to new customers in Eastern Europe. Big advertisers have few options beyond network television to reach the large audiences they seek, analysts say. There are fewer cable and satellite channels and fewer national newspapers than in the West and not as many people have Internet access.
“The television market in Central and Eastern Europe resembles what we saw in the U.S. in the ’60s and ’70s,” says Mark Riely, a managing partner at Media Group Investors LP, a New York fund manager specializing in media. “That was when the [network TV] business was growing faster than advertising as a whole, which itself was growing faster than the economy.”
Spending on network-television advertising in Eastern and Central Europe rose 18.3% last year to $7 billion, according to PricewaterhouseCoopers research. In the U.S., it rose 1.1% to $18 billion.
The region, of course, still presents considerable risks, including navigating government red tape. Serbia, for example, is emerging from a decade of war. Political instability in Georgia could be a problem for News Corp., but the risks are lower in countries that have joined the European Union, like Poland, where legal protections are stronger, says David Kestenbaum, a media analyst at Morgan Joseph & Co. in New York.
The experience of cosmetics heir Ronald Lauder shows how tough the region can be. In 1999, the station manager of his successful TV network in the Czech Republic seized control of the station. Government officials didn’t intervene, and Mr. Lauder’s company, Central European Media Enterprises Ltd., almost went into bankruptcy proceedings. Mr. Lauder sued the Czech government and regained control of the station in 2005. Since then, shares in CME have tripled as the advertising market has taken off.
In Croatia, RTL’s RTL Televizija, became profitable this year, two years after it was established.
“Every country within our region we would like to be in, so I spend a significant amount of my time making sure whenever anybody is ready to sell, they talk to us,” says Michael Garin, CME’s chief executive.
For News Corp., “because old-fashioned media is slowing down in the U.S., the company needs to do other things,” says Martin Pompadur, chairman of News Corp. Europe. “There is also a push to have more of our revenue coming from outside the U.S. than is currently the case.”
The company’s experience in Bulgaria suggests it can produce large returns from small sums. News Corp. bought its first Eastern European TV station in 2000, Bulgaria’s bTV. The company paid about $100,000 for a broadcasting license, spent $15 million on equipment, studios and shows, and brought in a station manager from a Fox station in Panama City, Fla., to run it. BTV found U.S. shows, with the exception of big-budget movies, weren’t particularly popular. People wanted shows made in their own language and reliable, unbiased journalism, according to Mr. Pompadur.
“It’s a trend throughout all of Europe,” he says. “When communism first fell, anything American worked. Now it’s gone the other way. They want local content.”
BTV is now the top-rated channel in Bulgaria, attracting about 40% of all viewers from Monday to Friday. The station is too small to be individually mentioned in News Corp.’s financial results, but Mr. Pompadur says it is probably worth more than five times what News Corp. invested in it.
According to Mr. Pompadur, News Corp.’s success in Bulgaria prompted the company to approve further expansion in the region. That decision has culminated in a spate of acquisitions this year, including the June purchase of 25% of a Polish station, TV Puls, owned by the Catholic Church and controlled by Franciscan monks.
With its religious shows rating poorly, the station has almost gone broke twice. The church handed over management of the station to News Corp., which is planning a revamp of its programs early next year.