CBS has signed a five-year, $10-million-plus agreement to supply an Italian television network with hundreds of hours of news, sports and entertainment programming.
The deal between the CBS International division of the media company's broadcast group and Rusconi Communications, a publishing conmcern that owns the Italia Uno network comes at a time when American networks are ardently wooing affiliates in this country and stations are changing loyalties at the drop of a Nielsen.
Italia Uno has more than seven million viewers.
Although Rusconi officially will be a CBS "associate," for all intents and purposes it will be "a de facto extension of the network," said one CBS official.
The networks have had contractural deals with foreign broadcasters for years, but this marks the first time a domestic broadcaster has tried to create an international counterpart to a domestic affiliate. It also signals the increasing importance overseas markets will play as the networks seek to continue their economic growth.
"This market represents a terrific opportunity for us," said John Egar, vice president in charge of CBS International.
With increasing competition from cable TV and other new media, the networks have begun to feel a squeeze in the American market. The relatively small amount of competition overseas and the start of efforts by foreign governments to deregulate their broadcasting systems has lured American networks to try their luck overseas.
Since the Italian government deregulated broadcasting five years ago, 300 television stations have come into existence, generating more than $200 million in new advertising revenue annually. CBS expects its deal with Rusconi to enable it to share in the revenue growth of Italian television. Advertising relationships are one of several options being jointly explored. Egar expects to announce several new CBS associates by the end of the year.
CBS is not alone in its efforts to secure foreign relations. ABC started transmitting programming, including news, via satellite to the Nine Network in Australia this year, and negotiations are underway for transmission of ABC News' four o'clock newsfeed that is regularly sent to its domestic affiliates, said Herb Granath, president of ABC Video.
Unlike the CBS/Rusconi arrangement, however, the ABC/Nine Network deal is "formal in the legal, not relationship, sense," said Granath. He believes that it is still too early to strike up affiliate-like relationships, but he says "we might do that eventually."
An NBC spokesperson says that no such arrangement is being considered at this time. Ted Turner's Cable News Network, on the other hand, has announced a satellite newsfeed deal with Australia's Seven Network that will begin in 1983.
One obvious problem with going international is that some programs just don't carry well from country to country. In addition, the threat of local government interference or censorship has caused American broadcasters to be especially cautious.
However, industry sources say the biggest problems are the Federal Communications Commission's financial interest rule and syndication rule, which effectively prohibit the networks from producing entertainment programming for overseas distribution. One CBS spokesperson said removal of these rules could cause "an explosion" of international activity by the networks.
Multinational networks could spark an interest in international advertising by multinational corporations, said one Madison Avenue ad executive. "It would be comparable to domestic network and spot advertising, except that you would be making a global buy versus spot buys on a country-by-country basis," said ABC's Granath. People in the industry indicated that scenario is not likely until the end of the decade, however.
In the interim, it seems certain that the major networks will soon jockey for affiliates abroad with the same intensity that they do at home, Egar of CBS contends.
"Broadcasters will become international with international concerns in the same way that IBM is now," said an advertising executive.