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Europe Stepping Up Pace in Visual Media

June 03, 1998|ROBERT MARICH | SPECIAL TO THE TIMES

LONDON — When Britain switches on a ground-based national digital TV broadcasting system, if all goes as planned later this year, it will mark a startling role reversal between the United States and Western Europe.

Europe--accustomed to lagging the U.S. by years, or sometimes even decades, in visual media launches--will be on the cutting edge. The U.S. isn't scheduled to achieve national coverage for digital terrestrial TV broadcasting until 2000, about two years after Britain.

(Los Angeles is scheduled to be one of 10 U.S. cities with limited local digital broadcast service later this year. Digital broadcasting is the high-capacity, high-quality transmission mode that initially will exist side by side with conventional analog broadcasting, though analog eventually will be abandoned.)

Looking back over five decades, Britain trailed the U.S. anywhere from eight to 16 years in bringing to the mass market such milestones as private commercial TV, pay TV and multiplex theaters.

"If you want to be part of the future in Europe these days, you have to act quickly," said Jan Mojto, a top executive of Munich-based TV program distributor Kirch Group, which is a digital satellite TV pioneer in Germany.

Three factors have pushed Europe's TV and movie business to march at a rapid-fire pace:

* The advent of satellite delivery of TV signals in the late 1970s, indiscriminately washing across national borders, eroded European media's patchwork of cozy national TV monopolies. European TV giants increasingly look to expand outside their home turf, such as French pay TV giant Canal Plus, which has $2.3 billion in annual revenue and is a big player in Spain, Scandinavia and Italy.

* Wall Street, sensing that Europe's TV market was underdeveloped, invested billions of dollars in start-up European TV media ventures during the 1990s, shaking up what had been a tranquil TV and cinema business. U.S. film giants led the multiplex theater construction sweeping Europe, which for Britain started 16 years after the U.S. In Germany, the gap was 22 years. France was 24 years behind.

* In the last decade, the 15-nation European Union has become increasingly active in knocking down local monopolies in all industries. The EU's executive branch waged several protracted court battles forcing several European countries to license new TV channels.

The emergence of a competitive environment was an unwelcome jolt for many European media executives, who used to be able to comfortably sit back to see how innovations played out in the U.S. before taking risks themselves.

"European managers were parochial in their outlook," said Paul Styles, head of media consulting at the London office of multinational business advisory firm KPMG.

Some U.S. executives stationed in Europe for many years say privately there's a defensiveness among European executives, since many are not thrilled with being forced to adopt the "American model." That is seen as meaning less job security, an emphasis on long work hours that cut into private life, a focus on individual deals rather than permanent business relationships and what Europeans used to dismiss as an unhealthy American obsession with money.

There's also a feeling among Europeans of a paradise lost--workplaces in modern, first-world economies that allowed plenty of time for private life.

"Europeans now have joined the rest of us in that we all have to justify our job," said Glen Kinging, a TV program acquisition executive for Seven Network Australia who has been in broadcasting for 42 years and is a frequent business traveler to Europe.

An example of the new job insecurity is SFP Productions, a large, state-run French production company propped up by regular infusions of government funding. Workers rejected several proposals to convert the loss-making SFP into a private-sector enterprise.

This year, the European Commission, executive branch of the 15-nation EU, required that France's most recent $141-million bailout for SFP be used for severance pay to cut its 1,000-member work force in half this year, not subsidizing high employment levels as in the past. As a result, executives in their 50s will take early retirement and there's a hiring freeze, meaning college graduates will have to focus on the private sector for their first TV jobs.

Century City-based executive recruiter William Simon, managing director of the media practice at Korn/Ferry International, said today's European media executives are becoming more aggressive and broader in outlook than their predecessors. But they cling to such benefits as monthlong vacations.

Changes are even afoot in France, which has what is perhaps Europe's most insular media industry because of a national obsession with local culture and a creative community that revels in bashing the superficiality of Hollywood.

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