June 2011
Volume 31 No. 4

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More Pilots, More Expenditure, More Elders, More Distributors

The big news at this past L.A. Screenings was either the money invested by both the studios and the networks, or the large number of pilots commissioned, which in effect means the same thing.

As an example, Comcast has invested $200 million in programming development this year for its NBC, and an additional $100 million for its cable networks. The group has commissioned 23 pilots. This from a company that just two years ago was planning to do away with pilot season.

Ben Pyne & Anne Sweeney
Disney’s Ben Pyne, Anne Sweeney

There are also many subplots to this news report, but let’s start with the pilots.

A total of 92 pilots were commissioned by the big broadcast TV networks and an additional 15 by the large cable nets. This represents a 15 percent increase from last year. By doing the math described below, we can see how the new season is a $240 million proposition even before it began. Of this amount, $100 million comes from the TV outlets, and $140 million from the studios.

At the Upfronts, held in New York City prior to the L.A. Screenings, the major broadcast TV networks first canceled 31 shows, then ordered to series 41 pilots, including those for mid-season and back ups.

Going back to the costs of the pilots, these vary drastically, especially if pilots are produced for broadcast networks or cable channels, so these numbers represent averages. Plus, many variables exist that would change the economic dynamics, like participation back to the network or cable channel, making it a co-production with the network or cable channel and having an 800-pound gorilla show runner/executive producer, etc.

A network prime time one-hour drama pilot costs $3.5 million of which $1.5 million comes from the net’s license fee. A half-hour network sitcom pilot costs $1.25 million, minus the $500,000 net’s license fee. Cable is much cheaper, depending on the cable channel, and utilizing special effects, one can probably expect costs to be 40 to 60 percent less in each category.

Considering the 21 drama and 20 comedy series picked up by the broadcast nets, studios are looking at deficits to recoup on the international market in the order of $1.2 billion for a full season (22 episodes).

Also news is that broadcast networks have pushed for new series with broader age appeal. This is because marketers are now focusing on those 55 and up. Previously, advertisers and therefore TV nets based their strategy on viewers 18-49 and 25-54. The only net that catered to older viewers was CBS with their view that all age groups count. Today 35-64 has become the new target since, according to the U.S. Bureau of Labor Statistics, people 45-64 have the highest median weekly earnings of any age segment, thus becoming the ideal consumers.
In addition, the median age for the audience for a broadcast network is now reported to be above 45, with FOX at 45.4 (up from 41.5 in 2006), NBC at 50.1 (from 48.5), ABC at 52.3 (from 47.4) and CBS at 56 (from 53).

Another trend that will please international buyers is that studios came to the realization that “in your face” style of product placement in TV shows can generate “cognitive rejection,” which in normal parlance means that viewers reject intrusive branding, and therefore such placements are no longer in plain view, but more subtle.

The L.A. Screenings were events for both the small and mid-size companies as well.
The mini-majors set a record with seven exhibiting at the Century Plaza Hotel and two in their L.A. offices. Including the telenoveleros and the various indies, a total of 76 companies were actively screening in L.A.: eight more than last year. In terms of product, the telenoveleros introduced an unusually fewer number of new telenovelas, but business was reported to have been done by all indies during the Latin Screenings, which preceded the studios’ pow-wow.
The overall number of buyers remained stable at 1,500 with an increase registered only from digital outlets, especially from Netflix, which this time sent 10 buyers, versus three in 2010.
For many of the international buying contingent these Screenings offered quality and quantity rarely seen in recent times. The only criticism was that screening rooms (especially at Warner Bros.) were kept at very cold temperatures in order to keep buyers awake during the extra long presentations. In addition to the announced series, studios also kept adding last-minute new shows to their line-up, making the screenings longer than expected, and, at times, causing late arrivals at other studios’ screenings.

It was also noted that some studios went back to the old practice of separating buying groups from the same country and using more screening rooms. The large number of parties also brought back fond memories of an industry getting back on its feet. On the indie side, Venevision opened the Latin Screenings with a big party, while Telefe closed them with another large bash a few days later. Just after Telefilms staged its own 50-year celebration show, the studios began their evening extravaganzas with Disney, followed by Sony and Fox each for some 1,000-plus invitees. Others, such as Lionsgate, CBS and NBC Universal went with restricted dinners and cocktails.

The overall buyers’ assessment of the new U.S. TV season is that the nets hope to make women laugh with sitcoms, men tune in with sexy shows and to lure older viewers that are now back in the advertisers’ graces, with remakes.

The mix was eclectic: retro shows such as Pan Am and The Playboy Club; mysteries likeMissing and Alcatraz; political dramas, Boss and Veep (for cable); law and order, The 2-2 and Person of Interest; remakes like Charlie’s Angels and Prime Suspects; animation and spin-offs, but very few medical shows. The largest selection is definitely the supernatural genre with some 10 new series, including two from Steven Spielberg (Terra Nova and The River).

In terms of specific preferences, Canadians such as Jay Switzer, liked NBC Universal’s drama Smash, Warner Bros.’ Person of Interest, and Disney’s Revenge.

From Latin America, for buyers such as Ecuavisa’s Karina Medina, top shows were NBC-Universal’s Grimm and Warner Bros.’ The Secret Circle.

Studio executives were very upbeat and charged up by the new season, but, as summarized by a studio president, “Yes, we’re very happy, but we’re also very aware that up to 80 percent of the new series will fail.”