Producers Find Hollywood News a Big Story Overseas

“Entertainment Tonight” has a problem in China. While the Paramount-produced show wants to set up a Chinese version to take advantage of this booming market, little more than 100 U.S. movies have ever had any wide release in the country.

What can “ET” do with its daily shows packed full of the likes of Tom Cruise and Demi Moore when “The Sound of Music” remains one of the most popular films ever shown on Chinese television?

Paramount Communications Inc.’s answer is to adapt “ET” for the Chinese market, using more archive material of stars who are familiar to the Chinese. Special “ET” programs on individual stars combined with broader U.S. movie releases in China eventually will “educate” the audience about today’s Hollywood.

While Hollywood has always been a great exporter--the entertainment industry ranks second in all U.S. exports after the aircraft industry--it is now peddling TV news about its best export and finding a ready market.

When “Entertainment Tonight” was launched 15 years ago, the industry started to realize the opportunities in entertainment news. “ET” quickly grew from a weekly to a daily show and spawned a range of variants in the domestic market such as Warner Bros.’ “Extra--The Entertainment Magazine” and E! Entertainment Television on syndication and cable.

Since then, international box-office receipts for Hollywood movies have grown to match--and soon to exceed--domestic U.S. box-office revenues, and entertainment news programs have begun chalking up overseas sales. “I have watched the hunger for this sort of news grow,” says Sherry Weinman, executive producer of Turner’s Entertainment Report. “But I am still amazed at the bottomless pit. The more people [around the world] see American movies, the more people want to know about them.”

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International sales now account for 10% to 15% of program revenues for most entertainment news shows--not a huge proportion compared with the 50% foreign box-office revenue of some Hollywood movies, but because this programming is cheap to produce and U.S. syndication or cable sales cover all its costs, international sales are all gravy.

As the global interest in these programs grow, specially tailored versions of entertainment news shows for international markets are becoming de rigueur, and the economics of the business are shifting.

“We have made it into the second phase,” says Frank Kelly, Paramount Domestic Television’s president of creative affairs. “Instead of trying to export every show from Los Angeles around the world, we are making programs which work in each market.”

This adaptation can be as simple as leaving out Broadway theater news and choosing TV stories only on series that appear in international markets. Or it can mean turning the star system on its head.

“In Germany, for example, movie stars are not as significant as producers and directors,” Kelly says. “A lot of our U.S. news focuses on the stars, so we have to change that for Germany.”

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The adaptation of formats for foreign broadcasters is a far more lucrative business than selling the U.S. versions of shows such as “ET” worldwide.

Traditionally, entertainment news programs were sold to foreign broadcasters as part of a studio’s movie and TV package. This packaging meant the program generated nominal income because it was bundled with more attractive programming that drove the package price.

Revenue from a customized version of the same entertainment news show, however, makes the show stand out from the package and attract a higher price.

“Entertainment Tonight” started its first international version on British cable last year. That version runs on the Paramount Channel, which shares a cable channel with Nickelodeon. The Chinese version of “ET” and a German version are also in development.

If Paramount can realize its ambition of putting a local version of “ET” on the air in the next two years, it will be one of the few foreign news programs regularly seen on Chinese television. The fact that it isn’t exactly hard-hitting is part of its unique selling point.

“It is viewed as a benign piece of programming. It has no agenda; it’s just about the world of entertainment,” Kelly says.

The entertainment news cable channel E! Entertainment Television was launched by Time Warner Inc. and a cable consortium including Tele-Communications Inc. in 1990, and by 1991 it was selling programming outside the U.S. It now appears in some form in 120 countries.

“We have found that our clients are clamoring for access to Hollywood news, and we can serve as their Hollywood news bureau,” says Jon Helmrich, E! vice president for international develop E! sells one- to four-hour blocks of its entertainment programming to clients from Taiwan to Germany, and produces 1 1/2 hours a week of specially tailored international programming. Between 10% and 15% of E!’s estimated $80 million annual revenue in 1995 are expected to come from international markets.

Half of E!’s international revenue now comes from developing broadcasters in Asia. The company has also signed a deal with Time Warner’s joint venture in China, called Chinese Television Enterprises, to shoot a local version of E!’s “Behind the Scenes”.

As well as making money on program sales, the goal is to brand the company internationally.

“The E! branding is very important to us. We want to increase our branded presence by building blocks of programming and eventually launching channels with local partners,” says Chris Fager, senior vice president of business and legal affairs at E!.

CNN’s Jim Moret, widely known for his coverage of the O.J. Simpson case, is host of CNN’s “Showbiz Today.” In that role, he is giving viewers in Kazakhstan, Swaziland and Latvia their fix of Hollywood news. “Showbiz Today” appears on CNN International and is also sold as a stand-alone show in areas such as Brazil. Branding is also an issue for CNN.

“It is not an enormous revenue generator,” says Joe Hogan, senior vice president of network distribution for Turner International. “It’s more of a branding issue of getting the CNN name out there in certain markets.”