'Expect fewer sitcoms, less drama and more reality TV'

The TV industry is going through some radical changes. With advertising revenue plummeting, stations everywhere are cutting costs and shying away from risk-taking.

The expensive yachts were still there, and so were the fancy cars parked at the Cannes marina. "The crisis doesn't seem to have had too much of an impact on the TV industry," commented Richard Pinder, COO of Publicis, one of the three biggest advertising firms in the world.

Pinder was in Cannes last week for the international TV fair Mipcom, the second since the worldwide recession set in. Pinder's industry has suffered badly from the crisis: advertising is the first thing companies cut back on when times are bad. But activity at the Cannes marina last week seemed to suggest that the TV industry is already starting to recover.

Different energy

"Six months ago, during the Miptv fair, things were a lot quieter here," said Reinout Oerlemans on board the yacht Santa Maria. Oerlemans is the CEO of Eyeworks, an originally Dutch TV production company, and like many of his colleagues he had set up his temporary office in Cannes on a boat anchored opposite the Palais des Festivals. "Last spring there was a collective panic," he said, "this time you feel there is a different energy already."

Eyeworks, which operates worldwide, received a lot of attention in Cannes for its latest reality TV show Octomom, about the American woman who had octuplets in January. Its main competitor Endemol, also with Dutch origins, did good business with US comedian Jerry Seinfeld's newest show, The Marriage Ref.

But even the yachts can't mask the fact that the international TV industry is in trouble, not just cyclical, but also structural. The crisis has had a dramatic effect on the advertising revenue for TV stations, which will directly impact what viewers can expect to see on television in the near future.

"Expect fewer sitcoms, less drama and more reality TV," said Peter Bazalgette, a former board member at Endemol and now an independent adviser. "Reality is cheaper and quicker to make. There is less money and less time to let an audience get used to a programme. People want instant success."

Structural changes

Endemol is confronting the crisis by cutting down on cost. It will not only cut 65 jobs, a fifth of its entire staff, but it is taping its new show Wipeout, in which contestants have to complete an obstacle course, in Argentina. Flying contestants to a location there is cheaper than building a set in the Netherlands, according to the company.

Simply waiting for the storm to blow over is not an option, said Bazalgette, because the industry is undergoing structural changes. Digital TV is the main factor: people are free to watch what they want, when they want, and anyone can start a TV station these days.

Endemol Netherlands doesn't expect to make a lot of money from digital formats any time soon because they are hard to get off the ground and the Dutch language limits online viewership.

Eyeworks isn't pulling out all the stops for digital either. "Making television is what we do well; it is in our DNA," said Oerlemans, adding: "Don't underestimate the impact of television. We are reaching a public of millions."

Eyeworks, which has subsidiaries in 15 countries, also needs to work more efficiently. It is trying to do so by translating formats that are popular in one country to other countries where it operates. "TV stations are being conservative about new formats right now. They want to limit the risk by going for trusted formats."

Strictly social

One Dutch company deliberately selling itself as cross-media is IDtv. It is involved in television, web and mobile as well as events, because it wants to expand beyond the traditional TV market. It is also working on its first online drama series; in which the audience can help decide how the story develops.

It is part of a trend to make TV more 'social'. The BBC is attempting something similar with Strictly Social, an interactive platform around the TV programme Strictly Come Dancing, a celebrity ballroom dancing contest.

The Spanish media group Zed has demonstrated that even the simplest idea can be successful if it is social. Instantly Rich, or Rico al instante, is a programme that Zed director Javier Pérez readily admitted was based on "simple, even weak" format. Viewers are asked to text message the words 'Film me, I want to be rich' to the station, and then explain why. But thanks to the revenue from the text messages it became the most successful programme ever on the Spanish TV station Antena 3.