The German television market is the most competitive in Europe. It has more free-to-air networks than any other territory, as well as a pay-TV platform backed by one of the world’s largest media groups, Kirch. There are two public broadcasters-ZDF and ARD-and a telco, Deutsche Telekom, with a monopoly on cable delivery.

Kids broadcasting is one of the country’s most competitive arenas. Not only do most major terrestrial channels air kids shows, but there are three domestic children’s networks-Kinderkanal, Junior TV and K-Toon.

During the 1990s, this situation has benefited U.S. program suppliers such as Disney, Warner Bros. and Saban, at the same time providing an almost insurmountable obstacle for overseas broadcasters seeking to break into the market. With pay-TV still a marginal business, Nickelodeon failed to get enough cable coverage to make its ad-funded venture viable. Rupert Murdoch, who would like to get Fox Kids Network into Europe’s most lucrative TV market, has been forced to circle cagily like a starved wolf.

Only Disney, with the imminent launch of its digital pay channel, is currently in a position to make a move (see ‘Disney Germany’s pick-up plot,’ page 32). However, the mouse house benefits from being a 50/50 partner in free-to-air net Super RTL, which has provided an invaluable broadcast platform for its family-oriented product. Unlike its rivals, the Disney brand also carries some kudos in the theatrical market.

U.S. program suppliers have had most success through packaging movie-driven output deals. When Kirch launched his digital platform DF1 in1996, he signed long-term deals with the U.S. majors, giving him-almost incidentally-rights to classic kids shows. Saban has fruitful partnerships with free networks ARD, ZDF and RTL, while Disney has been visible across the CLT-Ufa bouquet of RTL, RTL 2 and Super RTL. As a result of output deals, the opportunities for kids producers from the U.K. and elsewhere has been limited, although ZDF and ARD regional broadcaster WDR have consistently supported European co-productions such as Animals of Farthing Wood and Noah’s Island.

As Germany enters the new century, however, there are numerous developments that may signal a change in the balance of power. Perhaps the most significant shift came in December 1998 when Kirch formed a joint venture with independent producer/distributor EM.TV & Merchandising called Junior TV. The deal effectively gave EM.TV responsibility for exploiting 10,000 hours of U.S. and German kids TV properties (owned by Kirch) across all media.

Kirch did the deal because his digital pay-TV platform was bleeding him of cash, and he needed to realize the value of some of his assets. But the result has been to thrust EM.TV and the Junior brand firmly into the European spotlight. EM.TV’s most significant advance to date is a supply deal with number-two free network Sat 1 to provide a Junior TV branded block of kids shows on Saturday mornings starting in early 2000. Sat 1, owned by Kirch, has never aired children’s programs before. This fact has led to speculation that the deal is an intricate piece of in-house dealing designed to keep Kirch-owned rights in the family.

But EM.TV’s director of public relations Stephanie Schusser says the rights were traded on the open market and Sat 1 offered the best deal. The rationale for Sat 1’s decision to enter the kids market was that ‘general entertainment networks have to appeal to young audiences that hopefully will then stay with the network as they grow older,’ she says.

Initially, the deal will cover weekend slots only, says Schusser. But if it does well for Sat 1, there is potential for kids shows to cross over into the weekday schedule. If this were to happen, it would buck the trend. At ZDF, kids shows-which used to be aired on weekdays-are now limited to weekend slots.

ZDF’s respected kids chief Susanne Mueller says: ‘It is part of our remit to show children’s programs, but the market is so competitive, no broadcaster can have weak slots in the weekday schedule. I see the trend in Germany being towards thematic channels that allow kids to choose their own time to view. There is no likelihood of us going back to children’s shows during the week.’

Fortunately for ZDF, it has just such a thematic channel in the shape of Kinderkanal, a 50/50 joint venture with fellow pubcaster ARD. In a few short years, Kinderkanal has won free-to-air cable carriage in 75% of the country. In August, it garnered a 20% share of kids up to age 13, beating archrival Super RTL.

The highest-rating shows in ZDF’s lineup are domestically produced magazines such as Tabalooga TV, Siebenstein and Loewenzahn, says Mueller. But the pubcaster also has a vigorous acquisitions and co-pro policy. Adventures of Shirley Holmes, Wildlife, Spellbinder, Billy the Cat, Kipper, Spot, 64 Zoo Lane and Maisy are all examples of ZDF acquisitions or co-productions.

ZDF also supplies around 30% to 40% of the Kinderkanal schedule and sometimes acquires shows jointly with the niche channel. A program committee made up of ARD, ZDF and Kinderkanal executives decides the scheduling strategy. Kinderkanal also has its own small acquisitions budget, which is operated independently by the channel itself. Distributors are undecided on whether Kinderkanal has opened up opportunities in Germany or simply replaced healthy ARD/ZDF license fees with a lower-paying outlet. One observer says: ‘It is good to have the platform, but the prices paid by Kinderkanal are so low as to make a sale barely viable. The cost of dubbing into German is extremely high.’

Mueller describes the competition for kids on weekends as ‘a shark’s basin.’ In addition to output from pubcasters and Sat 1, RTL has a Disney Club on Saturday and Sundays. ‘No one really gets a big share of the market,’ she says. ‘At the moment, we all get around 10% to 15%-with Sat 1, it means a bit less for all of us.’

Some degree of uncertainty has overshadowed all of the main free-to-air networks. For example, Disney’s decision to launch its own digital network on Kirch’s Premiere World platform led to suggestions of a split between RTL and Disney.

In the mid-1990s, this would have seemed like bad news for RTL. But the truth today is that it would be catastrophic for the U.S. company. With so many free networks in Germany, the jury is still out on the potential for Kirch’s digital pay platform. By contrast, RTL is the biggest free broadcaster in Germany, and Super-RTL is a popular family service. What better platform is there for the promotion of Disney properties? Unsurprisingly, a Disney spokesperson confirms that there is no intention to pull out of the partnership that is still regarded as strategically significant.

Pro 7, another free network owned by Leo Kirch’s son Thomas, used to make a play for kid eyeballs. During the 1990s, it aired Leo Kirch-controlled properties like The Flintstones and The Smurfs. It also backed co-pros like TFC/ITEL’s Loggerheads. But it has now pulled out of kids. The children’s department has been closed down and the emphasis has shifted towards attracting young adults and teens-in keeping with the strategy at UPN, WB Network and Fox in the U.S. Partly as a result of the changes, Pro 7 head of acquisitions Daina Sacco returns to the U.K. as head of acquisitions at kids indie Link Entertainment.

There is also talk of a growing distance in the relationship between ARD and Saban, which have been co-pro partners on various projects. Some interpret this as Saban maneuvering itself in preparation for a Fox Kids Network launch, but Saban International president Stan Golden points out that the company has long sought to supply shows to as many outlets as possible. RTL’s exposure of Power Rangers was critical to the off-screen success of the property in Germany.

While the broadcasters duke it out, the emergence of strong independent players is a notable trend in Germany. In addition to its Sat 1 deal, EM.TV has signed a deal with Egmont to develop Junior as a publishing brand and a deal with Edel to take Junior into the audio-visual sector. Junior TV will also take its place as a digital channel on Kirch’s Premiere World platform alongside Disney. ‘The key for Junior is that it is not just a brand on television,’ says Schusser. ‘All of the other activity will support its development.’ To reinforce the point, EM.TV took a 50% stake in the toy arm of IGEL with a view to supporting its TV properties.

In addition to developing Junior, EM.TV continues to produce and distribute for other outlets at home and abroad. It has a four-year deal with Disney Channel to supply 330 hours of programming a year, a stake in the fast-growing German studio TFC Trickompany, and 23 animation co-productions in various stages of development. Schusser says there are live projects involving Ireland, Spain, Canada, Australia and the U.S.

EM.TV’s pace of development was facilitated by its decision to go public. Other German indies have made the same strategic decision. Hamburg-based IGEL Media and RTV Family Entertainment went public earlier this year.

Given the difficulty of accessing the German market, multiplatform companies like Ravensburger and EM.TV are growing in significance as potential brokers. In a recent deal, RTV took the German-speaking rights to Honeycomb/Elephant’s animation series for ITV, Grizzly Tales. Relying on local experts is one way of reducing exposure in the market.

This sort of broker arrangement is not just emerging for one-off projects. In a US$100-million deal, Warner Bros. has also given Kinnevelt control of its properties in German-speaking territories. This may signal disaffection with U.S. product on the part of German broadcasters, but it could also underlie a belief on Warner Bros.’ part that this is the best way to maximize revenue across windows. Kinnevelt, like EM.TV, may also see this sort of deal as a necessary investment to secure its own growth plans.

Whether the market will improve for overseas broadcast players is unclear. Murdoch now owns stakes in two free networks, TM3 and Vox, which may be his Trojan horses into the market. But Nick has shown no signs of returning to the ring just yet, choosing not to comment for this article. Some hopes are placed on DT’s plans to divest a degree of control of the cable network, but this is not expected to free up carriage opportunities. Kids channels may have to wait for the onset of digital cable and build brands from scratch.

As for Kirch’s pay-TV plans, there is likely to be substantial marketing investment this fall in the new consolidated Premiere World platform, but Germans have yet to develop the habit of paying for television.