Wednesday, May 18, 2016
Negotiating with the networks has always been a challenge. But over the years it has gotten even more complicated and way worse.
Originally, before networks could own shows, the fights were with studios over number of episodes ordered and license fees. The license fee is what the network gives the studio to produce the show. The network was allowed two airings. If the cost of the show was more than the license fee then the studio paid the difference. The networks made their money by selling commercial time.
So if a series was cancelled after thirteen weeks and the studio shelled out a lot of additional costs it took a bath. But if the show was a hit, like say FRIENDS, then the studio owned it outright. At the time, syndication was the brass ring. Warner Brothers has made billions on FRIENDS. 20th continues to rake in money from MASH. It’s like a slot machine that just keeps paying out for over forty years.
If you had an ownership stake in a series (let's say you were the writer/creator/showrunner) you now had another partner. Sort of reminds you of the Sopranos,’ doesn’t it? And even the big syndication dollars were in jeopardy. Why? Because networks began buying cable networks and selling their shows essentially to themselves at reduced rates. The ownership partners were undercut again. The networks profited in that they had quality programming for their upstart networks and they alone profited on the advertising. This prompted several lawsuits by folks with ownership stakes, like Alan Alda.
And now comes something new. The syndication market isn’t what it used to be. DVD sales are drying up. Streaming is the new source of big income.
Instead of selling their hit series to independent TV stations in syndication, they now sell to Netflix or Hulu for big bucks. But those outlets understandably want exclusivity for their astronomical fees. Series owners were able to provide that… until this year.
The arrangement with networks was always that they could stream only five episodes at a time. So you couldn’t binge on an entire series until it went to (say) Netflix.
This year the networks want to stream all episodes of new season’s shows. That's “stacking.” They feel it will generate more interest in the shows, and it’s another way to bring viewers into the tent. And that’s fine, except there goes exclusivity and a big payday down the line.
And just as the networks wouldn’t pick up a show if the studio didn’t agree to become partners, now they can’t get their shows on the schedule unless they acquiesce to this new stacking demand. NBC and ABC have been particularly hard line on this. And negotiations have been very contentious.
You will notice that the actual quality of the product has not been mentioned even once in this post. Once upon a time, the best pilots got on the air. Now, the best deals get on the air.
Will this be a great new Fall Season? As a viewer I'd say the odds are against you. Stacked against you.
By Ken Levine at 6:00 AM