Spinning new biz
Teen telenovas hitch a multimedia ride
"All our programs have parallel businesses," says founder Cris Morena. "This is a new way of optimizing telenovelas."
"Rebelde Way" (Rebel's Way), about kids who form a pop group at a private school, was spun off into a hit movie, "Erreway: 4 Caminos," in 2004.
The band, Erreway, has toured widely at home and abroad, put out top-selling CDs and graced everything from school notebooks to toys and a line of perfume.
Mexico's Televisa adapted the novela as "Rebelde" to high audience numbers, while offshoot band, RBD, is a hit at home, is making inroads in the U.S. and cutting an English-language album.
Now 20th Century Fox is reportedly in talks for a U.S. version.
Cris Morena and RGB have also exported the format of Cinderella-like "Floricienta" and family sitcom "Amor mio" to Brazil, Chile, Colombia, Mexico, Portugal and Russia, often producing in Buenos Aires.
They are in talks with a Spanish producer to do a $1.2 million "Floricienta" film next year.
International buyers "are starting to see the potential of everything that comes with the programs: the shows, theater and albums," says Morena. "We are not just exporting finished programs but formats with parallel businesses."
At home, the related businesses help make up for the low prices that broadcasters pay for programming, given a weak annual ad market of $200 million compared with the $250 million-$300 million in smaller markets like Chile and Colombia.
"We recoup investment with parallel businesses and export sales" in Argentina, Morena says. "But in markets where advertising in strong, production spending is recovered in the first airing of the program."
The main spin-offs are albums, live theater and shows, stickers and electronic and caller-pays phone games.
Product placement, a growing source of production coin in Argentina, is also big, given that the programs generally air before primetime against newscasts so often fetch an 80% share of youth viewers.
"Kids accept product placement a lot more than adults. The actors can drink a Coke during a scene or make a pizza with Blancaflor flour," says RGB prexy Victor Gonzalez.
Of course, the success is attracting competition. Argentina's Red Lojo Entertainment has entered the fray, as has Israel's Dori Media Group. And Marcelo Tinelli's Ideas del Sur is preparing "Patito feo" (Ugly Duckling) for next year.
Gonzalez shrugs off the competition.
"We are specialists in this," he says, adding that rivals must still strike partnerships with advertisers, merchandisers, manufacturers and record companies for additional businesses.
Production costs are high, too, as shows must meet international standards to snare overseas sales, and because child actors have work restrictions, says Gonzalez.
With sales already strong in Latin American and Eastern Europe, Morena says a new focus is on Western Europe, where so far her programs are only in Germany and Spain.
That market has potential because of growing pay TV businesses and the chance of selling formats for profitable primetime slots on terrestrial nets.
Argentina's Telefe Intl. distributes many of Cris Morena and RGB's programs in international markets.
