DreamWorks, Carsey Werner Find Good Strategy in Small Packages at MIPCOM

There is nothing easy about being a first-timer among the 2,000 or so television companies attending a market like MIPCOM, the international programming bazaar that closes here today. Unless, of course, you have a name like DreamWorks SKG or Carsey Werner International.

Many producers accept distribution deals to avoid the overhead costs of international distribution, which with two major markets a year in the resort town of Cannes can be notoriously expensive.

The strategy of DreamWorks and Carsey Werner in taking control of their international television distribution says as much about the worldwide markets as it does about these two idiosyncratic companies.

The global launch of both companies comes at a boom time in international television, which makes carrying the overhead a risk worth taking. New digital channels delivered by cable and satellite are proliferating around the world, and the television markets in Europe, which were deregulated in the 1980s, are now experiencing keen competition for U.S. programming.

The difference between these two independents and the television arms of the major Hollywood studios is volume. While the studios have been offering hundreds or thousands of hours of television series and movies to international broadcasters at MIPCOM, Carsey Werner began selling three series (“Cosby,” “Townies” and “3rd Rock From the Sun”), and DreamWorks Television was offering two airing series (“Spin City” and “High Incident”) and another in production (“Ink”).

Small packages of programming may not suit international broadcasters who need to sign deals for hundreds of hours to fill their schedules, yet the high-quality, low-volume approach of Carsey Werner and DreamWorks looks as if it could pay off in more mature and competitive international markets.

“It’s an efficient way for broadcasters to buy,” said DreamWorks international television executive Hal Richardson about the company’s plans to supply small packages of movies and television series. “Generally, as a buyer, if you want the top half of a studio’s slate of movies, you have to be willing to buy a package of programs and you end up paying for the bottom half of the slate, which include lots of stuff you don’t want and often won’t even air.”

For Carsey Werner, its international debut was a result of a move to control domestic and international rights to its own programs. The company bought back the domestic syndication rights to its hit series “Roseanne,” “The Cosby Show” (the original series) and “A Different World” from Viacom two years ago. International rights to those shows will revert to Carsey Werner from Viacom in the next five years, and the company will retain international and domestic rights on future network series where possible.

With three shows in the new network schedules this year, it seemed a good time to launch an international business, according to Stuart Glickman, president and chief executive officer.

“After we went into domestic syndication two years ago we saw how we could grow and it was a logical step to move into international distribution,” Glickman said. “Multichannel platforms are increasing around the world, and we can see the demand for good U.S. programming increasing.”

DreamWorks’ television strategy is much like its filmmaking plans. There will be a small number of projects a year--probably eight films and five television series. Though the company has a 50-50 joint venture with ABC for series like “Spin City,” as a rule it will hold on to distribution rights.

Getting good money for an output deal, which covers a studio’s production for periods typically of three to five years, would ordinarily be tricky for a company that has yet to produce a movie. (Movies generally are the most valuable part of an output deal.)

But DreamWorks was founded by Steven Spielberg, David Geffen and Jeffrey Katzenberg.

Richardson notes, “When anybody signs an output deal, be it an MCA, a Disney or a Paramount . . . the buyer assumes that the stuff in the future will be as good as that studio has produced in the past. To the extent that the principals in DreamWorks have had incredible success in the past, buyers are comfortable signing up with DreamWorks.”

Over the past year DreamWorks has signed output deals for its movies with the BBC, Italian pay service TelePiu and HBO, and separate deals with Mediaset in Italy and the Nine Network in Australia that cover movies and television production.

Independent U.S. producers have a number of options when it comes to international television rights. They can sell the rights to a major studio, give them to the broadcaster as part of their production deals, or sub-license the shows to a major, which will take a commission. That commission can range from 15% to 35% depending on the country or territory where the program has been sold.

“When we first said we would take on our own distribution domestically and internationally, other distributors kept coming to us and saying ‘You are not really going to do this are you?’ ” Carsey-Werner’s Glickman explained. “This is not an easy task.”

Carsey Werner spent close to $300,000 to attend MIPCOM, including exhibition space, marketing and advertising, travel and entertaining clients. DreamWorks spent less and did not take a stand in the Palais where Hollywood majors have their huge and often lavish displays, but conducted business in a suite at the Carlton Hotel.

The rising demand for U.S. programming in international markets is driving prices up. A successful U.S. sitcom can generate between $200,000 to $400,000 per episode in international sales. (The same show might pull $1.5-$2 million per episode in U.S. syndication.)

One-hour dramas like “E.R.” and “Murder One” also are enjoying a renaissance in the international markets. “Murder One” is making close to $1 million an episode internationally.

Richardson said the international market can be unpredictable. He noted that “NYPD Blue,” “Seinfeld” and “Friends” are on network television in Britain, but in France the three shows appear on Canal Jimmy--a Nick at Nite-style cable channel with a smaller audience. “Those shows aren’t there because the companies thought it was a good place to air them. They had to make the best deal they could and that’s where they ended up. Every international market is different.”