The Romanian TV market is ultra-competitive with numerous channels vying for ratings and a slice of the modest ad revenues available. Antena Group CEO Sorin Alexandrescu tells Stewart Clarke about his plan for the locally-owned broadcaster to overtake US-backed CME in the battle for eyeballs and about the challenges facing the country’s television sector.
Seated in his spacious office on the ninth floor of Intact Media’s ten-storey Bucharest headquarters, Sorin Alexandrescu turns the interviewer-interviewee tables and wants to know what TBI knows about Antena Group. The initial cautiousness can be explained in part by recent events that have seen Antena and pay TV operator RCS & RDS trade lawsuits and, at one point, Antena Group CEO Alexandrescu (pictured) arrested on blackmail charges. He rarely gives interviews.
With the legal situation unfolding and the eyes of market watchers on developments, it is a crucial period for Antena, the broadcast group that operates a family of channels spanning general entertainment, news, music and celebrity. Away from legal matters, the good news for the group is the bouquet of channels is now the overall market leader, ahead of Time Warner-backed pan-regional broadcaster CME.
Kantar Media audience numbers for 2013 show that Intact’s five channels garnered 22.1% overall share compared with CME’s 20.8% for its six-channel offering.
However, CME’s Pro TV was the single leading channel with 14.9% against Antena 1’s 13.5%. Alexandrescu expects the momentum built by flagship network Antena 1 will see it overtake Pro TV in the ratings. “I believe that will happen and think that it won’t take more than two years until we are overcoming them,” he says. “Now, we are fully equipped to compete with them directly – there is no doubt about it.”
Being ‘equipped’ in the Romanian market means having the right talent and the right talent shows. Antena’s cause was boosted earlier this year when it lured lauded local producer Mona Segall and her production team from Pro TV. Having been the creative force behind Pro TV’s adaptations of the Got Talent and Dancing with the Stars formats, her first project for Antena 1 will be Poftiti, va Rog (You’re Welcome), an entertainment show in which a host will be joined by four celebrities who must attempt to revitalise flagging guest houses.
Despite cost cuts and job losses, Pro TV is not, however, about to quietly concede its ratings crown and, on CME’s most recent analyst call, co-CEO Christoph Mainusch touted “a new record in the history of audience measurement in [Romania] by achieving an average primetime audience share of almost 29% during the month of March”. The CME boss name-checked Got Talent, [local sitcom] Las Fierbinti and MasterChef as driving the primetime numbers.
In terms of the current crop of big international formats, Pro TV and Antena 1 rival Prima TV has scored local rights to Talpa’s buzzy Utopia. It is slated to debut later this year as one of the centrepieces of the free-to-air broadcaster’s autumn schedule as it attempts to reposition itself and woo younger viewers. Prima will produce the format itself with Talpa providing consultancy services. As well as Got Talent and Dancing with the Stars, Pro TV has The Voice and MasterChef formats. The channel also relies heavily on acquired movies.
Alexandrescu says Intact’s local ownership – founded by Dan Voiculescu in 1991 and now owned by his daughters Corina and Camelia (who is company president) – and relationships with local talent will drive Antena 1 from second to first.
“We have the best content and production teams available in Romania,” Alexandrescu says. “Right now, with all we have done so far, we are fully prepared to be the unique entertainment proposition in Romania. It’s too late for the competition to have a different strategy because over the past three years we have managed to get most of the stars available signed to us under our star system. More than 80% have a contract with us and the story has not ended yet. In no more than one year, I believe 90% of the most relevant talent will work with Intact and only Intact.”
The effort to secure celebrities and talent has seen the Antena Group bring in local rock star Stefan Banica and entertainer Horia Brenciu as new members of the judging panel for the upcoming season of The X Factor (alongside existing judge and local singing star Delia). Both were poached from Pro TV with Banica formerly hosting Dancing with the Stars and Brenciu a judge on The Voice. In tune with Antena 1’s policy of locking in talent long-term fashion, it has recruited Florin Ristei, the winner of last year’s The X Factor.
We have the best content and production teams available in Romania. With all we have done so far, we are fully prepared to be the unique entertainment proposition in Romania. It’s too late for the competition to have a different strategy because over the past three years we have managed to get most of the stars available signed to us under our star system
Antena 1 also has Celebrity Splash! and, in keeping with the local edge Alexandrescu claims, has a big locally-originated talent format in Next Star, the channel’s biggest show. Various international distributors have made approaches to sell the Next Star format, but, ultimately, the Romanian broadcaster could start shopping its own shows internationally as more local content is produced, according to the Antena boss.
“We need the size first,” says Alexandrescu. “We’re not pushing as much as we want to in this, [as] we need some more examples to make the [line-up for distribution] quite strong. First you have to have successful content, and then you can write another part of the story by selling those formats outside – the timeframe for this is two to three years.”
Distribution of another kind is also top of mind for Intact – that of its channels on the country’s cable and DTH systems. Disputes over carriage are not uncommon in Romania and the Antena boss says the country’s media regulators are partly to blame.
“I would say, quite strongly, that the difficulties we see in this market are due to the weakness of the authorities,” says Alexandrescu. “We have a Competition Council Authority which is, I would say, quite favourable [in its decisions] when it comes to all the problems that are created by one big Romanian operator – the biggest one.”
The largest cable and DTH platform operator in Romania is RCS & RDS, and it is locked in several disputes with Intact. RCS & RDS, which is also in the running for a ten-year license to operate five new DTT multiplexes as Romania moves towards digital switchover.
“You cannot rely on somebody taking decisions in years, this is an industry where everything happens today – this hour, this minute, this second – and when you have an authority that is allowing such a player to play unfairly in a very competitive market then there can only be one conclusion.”
The upshot is that Intact does not have full carriage of its channels on RCS & RDS’s DTH platform. Nor is it on that of Focus Sat, the UPC DTH satellite service ultimately owned by Liberty Global. “I’m confident that we will reach an agreement with Focus Sat,” says Alexandrescu. “I don’t want to put them in the same position as RCS & RDS. They are a different organisation with different people. These are two very different cases.”
As well as cases with the local competition authorities, there are ongoing court cases between Intact and RCS & RDS, including one that saw Alexandrescu arrested and subsequently released. Several of the legal cases in process see the pair seeking compensation from each other. “It is well known that we have a lot of legal cases with them. It is quite difficult to foresee a timeline for a decision while all those cases are in court,” says Alexandrescu.
Meanwhile, the ratings battle with CME is painted by Intact as the local versus the international player. “We are fighting with a group that has operations in several countries, which is owned by some big international players who hope they are going to be one of the strongest propositions in Central Europe, and somehow we have managed to be a very competitive against them. Now we need to look at how we position ourselves within the market that we are playing in.”
The Antena Group channels have been rebranded and repositioned accordingly. The core Antena 1 has started to skew younger, while Antena 2 has become the celebrity-driven Antena Stars. The female-skewed Euforia is another offering strongly targeting women. The only overtly male-skewing channel in the portfolio was sports net GSP TV, the least popular of the Intact quintet of channels in 2013. It was replaced in April by music channel Zu TV, which builds on Intact’s Zu radio brand. Intact’s second most popular channel in 2013 – with a 6.2% national audience share in 2013 – was news and current affairs offering Antena 3.
Intact launched its TV everywhere offering, Antena Play, last June, and is debuting its entertainment shows on the service in the mornings ahead of the programmes’ TX the same evening.
As well as the programmes from each of the Intact channels, it also has behind the scenes and extra content such as a round-the-clock feed from the house used in popular daytime dating show Mireasa Pentru Fiul Meu (May I Call You Mom?). The paid-for service costs RON10 (US$3.10) a month.
Alexandrescu says a year after launch he is pleased with the half a million Play customers: “If you look at the way content is used now online you see that there is a tremendous grey market. The piracy rate is huge. You will see everything you see on theatrical release on a torrent site in no more than 48 hours [after its debut]. All of the TV series produced outside of Romania are available here immediately. When you have this magnitude of piracy, to have 500,000 people paying to watch via a subscription is a success.
“OTT platforms have grown consistently all over the world, starting with Netflix and now so many other products, and that is not a trend we can change. Consumers want to access content wherever they are.”
Looking ahead there is the possibility of adding to the five-strong TV line-up. A children’s channel is one notable thematic omission. “Kids would be quite perfect for our portfolio and could be one of the options we need to look quite deeply at for the future. It would be a new channel [not a rebrand]. But the most important thing at the moment is to strengthen the stations we have now,” says Alexandrescu.
In its projections for 2014, Intact is committed to double-digit ratings growth. “We can get there as we managed to make the steps for the growth until now, and I strongly believe that the overall situation is much more favourable than before as the overall platform we have is stronger,” says Alexandrescu. “The [advertising] cake is maybe not the best one, but there is a lot of room for us to grow in this market, by taking a bigger slice of it.”
As a private business there are no quarterly reports to pore over, but the Antena Group boss says that the TV business is in the black. “It is very well known that most of the media in Romania is losing money,” he says. “In this difficult market we managed to be a profitable business.”
But can Intact really compete with a restructured CME, with the might of Time Warner behind it? Alexandrescu says yes: “At the end of day they are controlled by that entity and we are not. The influence of that entity in CME has been very strong for years, but there is one thing making the difference, this is the only industry in the world where local knowledge cannot be surpassed by international [knowledge].”