News

Recovery mode

Media about us
• 14.09.2018

Five years ago, Ukraine was a hot market on the international television circuit. Long one of Europe’s biggest importers of formats, the country welcomed international delegates to its fledgling Kiev Media Week to hear about its potential as an exporter and coproducer, with high production values, low costs and excellent studio infrastructure.

Then, in 2014, the bottom fell out of that world. International politics, specifically a conflict with neighbour Russia over the Crimea, took over. Restrictions were swiftly applied to airing Russian content in Ukraine. That left networks (led by the six main national broadcasters, TV Channel Ukraine, 1+1, Inter, ICTV, STB and Novy) having to replace up to 70% of their schedules, with an ad market in freefall because of the troubles and a currency rapidly depreciating in value.

Media Group Ukraine director Yevgen Lyaschenko says: “When Russian-made movies and series – the better half of our library – were banned, we found ourselves in quite a sticky situation. That’s putting it mildly, because Russian-made TV series had been the most popular with our audiences until 2013. Acquisitions made more sense to us than production, but the legal restrictions obliged us to adjust our channels to meet the new standards.”

Ahead of Kiev Media Week’s return this month (September 17-21), other leading figures in the Ukrainian TV business are cautiously optimistic about its recovery. Lyudmyla Semchuk, head of international development at the Star Light Media Group, which operates six Ukrainian channels (STB, ICTV, Novy Channel, M1, M2 and QTV), believes Ukraine is “in the process of recovering from crisis.”

“The TV market is still profitless. However, a number of steps have been made by Ukrainian companies to encourage market sustainability,” she says. “Our media group is used to high production values – our version of The X-Factor is recognised as one of the best local adaptations in the world – but nowadays it is hard to recoup the costs for the projects made on such a level in Ukraine only. As a result, we are engaging more international partners for joint investments, especially in series production, and we hope to return to the profitability the company had before 2014 within the next three years.”

Lyaschenko adds that his broadcast group is seeing the ad market recovering, with takings up 30% in the first half of 2018 compared with the same time last year.

Kateryna Vyshnevska, head of development and coproductions at Ukrainian producer FILM.UA, paints a similar picture but suggests challenges still abound: “The market is still struggling. Although there’s been a slight recovery, the growth in advertising revenues and pay subscriptions is not enough to make up for the economic collapse of previous years and the partial loss of the Russian market.”

The new rules and quotas imposed include 70% of the schedule coming from the EU, US, Canada and Ukraine, with at least 50% of it domestic. Three-quarters of the output must be Ukrainian-language and there is an outright ban on programmes featuring blacklisted Russian personalities, all Russian films produced since 2014, Soviet symbols and anything that depicts Russian security forces positively.

Although the sudden restrictions were challenging for the industry, the situation has led to innovation and increased output from local production. Lyaschenko’s Media Group Ukraine now airs 1,600 hours of in-house productions a year, up from 695 in 2014, although 750 of those hours are news and magazine shows. Russian content has been fully replaced, and from October the channels’ older Russian library will be replaced by Ukrainian content in compliance with the language quotas.

Volodymyr Zelenskiy, co-owner and creative producer at local production giant Kvartal 95, says tough times have led to a “booming market,” adding: “After Russian content was banned, there was a gap in TV programming that had to be filled with locally produced content. The seeds sown four years ago are giving good seedlings now.

“Since 2014 we’ve seen rising competition for TV channels’ in-house prodcos and independent production companies like ours. There are many more Ukrainian TV series of all genres on our channels, more comedy and entertainment shows as well as reality and talkshows produced locally. There are many more Ukrainian feature films released in the cinemas, and now they successfully compete with Hollywood blockbusters.

“The main restraint on this generally optimistic story remains the current economic situation, including decreased profits from advertising. Although there has been a positive shift in the past two years and this January a record number of brands appeared on TV – more than in the pre-crisis period – the advertising market still has not recovered fully.”

Star Light’s Semchuk adds: “Many Ukrainian channels incurred significant losses on their investments in Russian content due to the embargo. Some channels that were mostly dependent on in-house production, like our channel STB, were less affected by this regulation. But it has become a powerful impetus for Ukrainian series and films. At the moment, Ukraine has all the necessary facilities for high production values on significantly lower budgets compared to Western and Eastern Europe. We’re starting to see a lot of interest in coproduction and co-development from the companies outside of the CIS region.”

Star Light is currently working on a pilot of its format Daddy’s House with partners in France, having already sold the show to Poland.

“I actually think we are doing well, all things considered,” adds FILM.UA’s Vyshnevska. “Yes, all of a sudden we had to produce more shows with less money and with limited resources. Everyone was overstretched. But creativity boomed and new approaches were invented. Our series Doctor On Call is an interesting hybrid, as it’s filmed as scripted reality, is very cheap and quick to produce, but has the look and the feel of a scripted drama. Scripted reality is having a boom as it’s not expensive and the turnaround time is quick. It wasn’t easy, but we came out stronger. NHK in Japan has picked up the format to detective series The Sniffer

“Creativity in our business isn’t limited to writing scripts or directing; it’s also in how you put your projects together. As less money is available from the local Ukrainian broadcasters and from the main export market of Russia, we have to find new financing models and expand our distribution geography – our animated feature The Stolen Princess has sold into more than 100 territories. We are engaging in coproductions with new territories. We are building brand partnerships to help finance content production from the early stages. For our tentpole projects, we turn to the Ukrainian Film Commission for support, which has been indispensable on the feature film side. Every little helps.”

Victoria Yarmoshchuk, CEO of MRM and Kiev Media Week and head of the Ukrainian Motion Picture Association, says the Ukrainian production and distribution industry is “booming,” with more than 300 original scripted projects at different stages of production, three times more than a couple of years ago.

“I strongly believe Ukraine has everything needed to be a strong player on the international market of content production. But we still lack international recognition and trust from the world community, which makes it challenging to enter international coproduction projects. This is definitely the top priority for our market since cooperation with Russia and other countries of our region ceased.”

The Ukrainian government is also belatedly riding in with assistance in the form of proposed tax rebates designed to stimulate local production, and now the target is to export to parts of the world other than CEE and get involved in those international coproductions. NHK in Japan has acquired detective series The Sniffer as a format, while Kvartel 95’s Servant of the People went to Fox in the US for adaptation.

Vyshnevska says the process is “evolutionary, not revolutionary, but I think in the course of the next five years we will definitely have a few coproduced TV series on air both in Ukraine and abroad. It’s a slow process and nothing’s ever guaranteed, but we, for example, now have TV drama in development with Italy, Germany and Iceland, to name a few. It would be great to crack the US, but we have to be realistic and explore the territories where we have more in common. There are huge Ukrainian diasporas in Israel, Italy, Germany and Canada.”

Yarmoshchuk adds that she hopes the country will have a cash rebate scheme to attract more foreign productions within five years, while copro treaties with China and Canada are in the works. The local industry also awaits significant impact from the global streaming giants – Netflix is in Ukraine but is not producing local content yet. It has acquired The Sniffer from Film.UA and comedy Servant of the People from Kvartal 95. Originals may come in time.

But even without that, there are already green shoots of recovery being seen in Ukrainian TV after a horrid few years.

Clive Whittingham 11-09-2018©C21Media