There are all kinds of nonproductive approaches to saving fan favorites that are Nielsen ratings challenged. People dream all the time. They dream that because they believe that Nielsen is an antiquated system, the ratings aren't accurate and shouldn't matter. One way or the other, for now, they're dreaming. When it comes to that kind of dreaming I'd prefer to save it for some alternate universe where Gisele Bundchen can't tell the difference between me and Tom Brady.
I wanted to at least take a crack at something that at least potentially was a more productive approach. It may wind up as unproductive as thinking about an alternate reality where Gisele can't tell the difference between me and Tom Brady, but no harm in trying.
This is a rough draft/thinking out loud on the Internet type of deal. It's definitely very high level, very pie-in-the-sky, with many flimsy arguments that are easily blown aside. Indeed, there are already many holes and unresolved issues, but feel free to shoot more. If enough of the holes can't be plugged, it's not viable anyway.
I'm not sure it's possible to plug all the holes, but I'm not yet sure it isn't. If they can be plugged, it could possibly be framework that accomplishes two things. It would actually save some fan favorites, and it would also be an economically viable alternative for the studios making the shows. If the studios can't be sold on the idea, it's DOA. Which means it's probably DOA, because most or all of the studios would need to participate in order for it to work.
A journey of 10,000 miles begins with a single 10,000 words
Beyond the desire to save shows, I truly believe that when you have 7 million people who like something (or really even 6 million, 5 million and yes, even four million) you have something that has a huge value. It may not be of value to, or make sense for, the broadcast networks, but there is still value.
The underlying premise (which is possibly wrong) is that there is a lot of value in brands with that kind of scale. Not enough value for the broadcast nets though and not necessarily because those shows can't be profitable, but because of the squandered opportunity costs. Keeping a show that draws 5 or 6 million takes a slot away from a show that could draw 12 million. I'm working from the premise that just because it doesn't make sense for the broadcast networks, doesn't necessarily mean it can't make sense anywhere.
While there is no doubt in my mind that a show with 7 million viewers has value, it's not lost on me that if you move that show off the broadcast networks to another network, it will lose a good chunk of the viewers, and the trick becomes how to get value once that happens.
Nobody Does Scale like TV
I'm going to spend a lot of lines on my fascination with scale. And if you already well appreciate the enormous scale television has, I'd skip this section and scroll to the next. I appreciate things with large scale, and it's one of the reasons that the TV business interests me, particularly the broadcast networks that still can somewhat regularly (thanks to American Idol and Dancing with the Stars) reach more than 20 million average viewers. Some networks have adjusted expectations ( we're looking at you, NBC), but a show like Life or even Chuck which is seemingly on the bubble for renewal, still generate relatively massive scale. And as long as we're speaking relatively, that's true even among 18-49 year olds.
With a 2.1 final adults 18-49 Nielsen ratings last Monday night (final ratings), NBC's Chuck averaged around 2.77 million 18-49 year olds for the hour. Many more than that watched some of the show and there were more people who even saw all of the show actually. People who flip the channel after the credits start to roll and don't wind up watching the last minute or two of the hour don't count for the whole hour. When you (yes you, the one person who reads our blog that is in a Nielsen family!) change the channel for a few minutes during commercials and then change back, the time you were away isn't counted either.
Averaging 2.77 million 18-49 year olds in an ONE SINGLE HOUR isn't an easy feat anywhere other than television. Our web site has been up almost every minute of every day since the middle of September 2007 (minus what probably adds up to about a whole day of downtime). So we've been around roughly THIRTEEN THOUSAND hours. According to Google Analytics, we still haven't reached 2.77 million unique visitors. We're at 2.67 million and that includes the under 18 and over 50 crowd too. Our trend is good though (1.85M out of the 2.67M were in the last six months).
I'm not saying it's reasonable to compare a niche web site with no marketing budget to a television show on broadcast television. Of course it isn't. I am just trying to illustrate the scale. It took us almost 13,000 hours to reach less total viewers, often, for less than one minute, than Chuck was able to average in one hour with just the 18-49 year olds. On an engagement basis, Monday's Chuck had ~166 million minutes of engagement with 18-49 year olds. In our 13,000 hours of existence we've had 8.4 million minutes of engagement. One hour of Chuck had 158 million more minutes of engagement with 18-49 year olds than our 13,000ish hours of existence had among all ages.
I'm not honestly sure that Google, the biggest site on the Internet, even with Youtube, Gmail, Google News etc, thrown in bests Chuck in terms of total engagement with 18-49 year olds at 8pm on Mondays. Even shows sitting on the bubble have epic scale compared to practically anything else. Unfortunately the practically anything else also includes shows on other networks (and especially shows on their own networks) that have even more scale.
When American Idol averages nearly 27 million as it did Tuesday night from 9pm-10pm, we're talking 1.6 billion minutes and nearly half of that or 800 million minutes were in the coveted 18-49 demographic. I am feeling very comfortable that Google, the biggest deal on the Internet, didn't have anywhere near that level of engagement for the hour. We're talking truly epic relative scale.
The Castoff Network
As architected currently, the "Castoff Network" is available on cable/satellite. I know it will need a much better name if it is ever to see the light of day. I like the BCAST Network for a lot of reasons, but it's way too early to spin out into a naming discussion. I am using the term Castoff to be light, and not pejorative. The whole reason for this network again is because I believe there must be value in these shows, and the brands and followings they have created even if the shows don't make sense for the broadcast networks
Sure, some will say it's like The Land of the Misfit Toys from Rudolph the Red-nosed Reindeer, only for TV shows. But that's ok, on the Christmas special version, the conclusion is there is value to the misfits.
The biggest obstacle may be that in my proposed model, ABC, CBS, FOX and NBC all need to participate. The Castoff Network is a joint venture between all of them. That's tough right out of the gate. And it's even tougher because really the necessary model probably is to have all the studios participate rather than the networks. For discussion purposes, I'm sticking with the network model simply because it's easier to talk about in those terms.
What's Our Business Model?
I don't think it's impossible, but it would be a tough challenge and could not likely be launched in the current environment because the network would need some runway. The business model is a mix of subscription revenue and advertising. Not unlike some cable channels, except it would be a for fee service on top of basic cable.
YES, FEE MEANS IT'S NOT FREE
I see it as a subscription cable channel like HBO. Only it costs less. I'd propose $6/mo., with the cable/satellite operators getting some of it (say $1). But this is potentially another big hole because Comcast, Time Warner and DirecTV may laugh hysterically at the notion of only getting ~17%. But in the example I'm using, in order to be viable it would probably need to attract at least 5 million subscribers. That's harder than getting 5 million people to watch Chuck on NBC, for sure. But it is doable (see below in If Showtime can do it...). But I'm not sure how quickly in the best case scenario 5 million could be achieved.
I REPEAT. IT IS NOT A FREE CHANNEL. As modeled above, it's less than $1.50 a week though. Less than a single cup of the smallest (Tall) coffee Starbucks has to offer. If you're not willing to pay that's fine but you shouldn't ever get mad at the networks for pulling the plug on your shows.
Fans are not entitled to be provided with free entertainment on broadcast television just because they like a show, even though many are operating under the misguided notion that they are entitled. Almost every show attracts a following, and it is indeed unfortunate that every show that does that doesn't wind up making sense for the broadcast nets. But it is inevitable that not all will make sense. That is a reality that many fans do not accept, and some fans don't even consider. But that doesn't change the reality of it.
It's fine to be disappointed when a show is canceled and it's fine to care about a show enough to be willing to be pay for it. You're absolutely entitled to disappointment even if you're not willing to pay. But if you're not willing to pay, you are not entitled to indignation! When it comes to indignation, you have to pay up or shut up. Less than a cup of the smallest cup of Starbucks coffee per week! Come on, suck it up.
If you aren't willing to pay a $1.50 per week you're not entitled to any indignation. But even those who will whine but not pay up should also root for the network to succeed anyway! It will allow you to buy (or pirate) your favorite shows in other venues be it DVD, or iTunes.
I don't see free web streaming access in the cards for years for the Castoff Network, so, sorry Hulu fans!
C'mon, how can the Castoff Network be worth $6/mo!?!
I can't really tell you what I actually pay for the premium channels I have because I'm in weird bundles. But the list price on HBO and Showtime is $18.99 per month (technically in my bundle I think I am getting HBO for free currently, but am paying full freight for Showtime, $18.99!!).
On Showtime I watch Weeds, Californication, Dexter, and lately US of Tara. One of these days I'll get around to checking out The Tudors. I almost never watch Showtime for movies and don't think of it as a movie channel. Other than the shows I listed, I don't watch anything else. Yes, I know, I need to cancel Showtime because it's costing me much more to watch the shows I watch than it would to buy the DVDs. But that idiots like me exist make me more optimistic about the ability for the Castoff Network to attract subscribers at $6/mo.
I'd very likely watch just as many shows on the Castoff Network and as modeled, it would cost less than 1/4rd.
If Showtime can do it...
And before you say, "there's NO no way could you get 5 million people to pay $6/mo. for the Castoff Network, Nielsen estimates there are over 19 million subscribers to Showtime. I'm sure they're not all idiots like I am who are paying $18.99 a month, but I'd guess there are 19 million homes averaging more than $6. But then again, Showtime had a long, long time to grow to that many subscribers.
Showtime needs to be more expensive because it doesn't have advertising. I'm not sure if this means we need to raise the subscription fee of the Castoff Network to $9 or $10 or whether Showtime is very overpriced for what it offers.
The Castoff Network launches!
Each of the networks would pick 3 one hour shows that are not being renewed by the network to send to the Castoff Network. There are no 30 minute comedies or unscripted shows in the Monday-Thursday prime-time lineup of the Castoff Network, just 1 hour scripted shows. The way that would work in the first year (using this year's castoffs) is something like (pick 3):
NBC: Life, Lipstick Jungle, Knight Rider, My Own Worst Enemy, potentially FNL (I'm leaving Chuck out in hopes it wouldn't be sent to the Castoff Network!)
ABC: Eli Stone, Pushing Daisies, Dirty Sexy Money, Life on Mars
Some immediate holes appear. Unless they brought back Prison Break for another season, FOX, which programs fewer hours, only has two potential shows to send to the Castoff Network (Terminator: The Sarah Connor Chronicles and Dollhouse). Or FOX could wheel and deal and send only two allowing NBC to send another show (and they'd have to figure out how to pay FOX for that).
CBS might have zero shows it would want to send. It has shows it will cancel, sure, but since for the Mon-Thursday primetime block there are only one hour scripted shows with no comedy or reality, and since some of the shows CBS will cancel may be long in tooth and hard to produce cheaply... Well, they might have to go back a year and resurrect Jericho, Moonlight and Cane (or Swingtown - hey, we're on cable now!). Can you imagine!? I can't, but still fun to think about.
What do we do in year two?
Launching the home for castoff shows was relatively easy compared to what happens the following year. The second season would be much trickier. Perhaps ultimately more complex than figuring out the Alternative Minimum Tax (AMT) though I'm guessing way less people are affected by that these days. I haven't come up with a perfect system or even a reasonable system yet for handling the scheduling in the second year.
In year two, you have NEW castoffs from the broadcast networks, but you also must (hopefully) have some relative Castoff Network hits. You can't clean the slate every year because if it's just the "One More Year of Slow and Painful Death for your show Network" I don't think it can gain any traction. A Terminator: The Sarah Connor Chronicles fan who had at least the illusion of a multi-year run will be much more willing to pay than a fan who knows the show has only one more year.
Unfortunately my bias is probably to create scenarios that would cause the most focus on ratings and do things like automatically cancel the lowest rated show in each time slot. The 8pm Monday show fans will scream bloody hell at that approach, but it would make for some interesting analysis. Ultimately though I think a reasonable system for dealing with each year's castoffs could be accommodated.
Overly Simplistic Look at the Economics
The model of $6/mo. subscriptions with $5 of it going to the Castoff Net produces $300 million annually. In order to produce 20 episodes of all twelve Castoff Network shows at a cost of $2 million/episode, we also need to somehow sell $180 million worth of advertising just to break even on the production of those shows.
The extra $180 million seems in the realm of very doable even within new airings of the Monday through Thursday primetime episodes. It would work out somewhere around $20,000. It could (and would) be argued that advertising to people who were willing to pay $6/mo. extra and still see advertising come at a premium rate.
But these back of the envelope numbers only get me to break even on what I'm paying for shows. I'd have to sell more advertising to pay for the Castoff Network staff and have a marketing budget. This also assumes an immediate ramp-up to 5 million subscribers, and in real life it wouldn't happen like that.
240 down, 8,520 to go
The good news is there is a lot of opportunity for selling additional advertising space. The bad news? Well, I've taken care of programming the Monday through Thursday 8pm-11pm prime-time slot for 20 weeks out of the year or 240 hours out of the 8,760 hours a year I have to program. And like the CW, I didn't really figure out Sunday, or Friday and I have no affiliates (and I'm thrilled about that) to give back Saturdays to, and that's. Just prime-time.
There's still 8,520 hours to sort out and probably 8,520 things to sort out on top of that. But sorting all of that out will seem like a day at the beach once we've sorted out how the heck can we get all the studios to agree to participate.
For the 12 of you who read down this far thanks! Now feel free to get out your guns and start shooting holes, or better still, feel free to start plugging the holes.
I think you have two major problems here –and you do note them, but they are major:
1) The fact that you used “castoff” in your writeup, has me worried. You could have come up with something a little less negative. How about, Niche Market shows? Or TGFBC (too good for basic cable)?
2) Getting people to pay for a TV channel is not only very difficult, but you also have to convince the cable companies to give you the channel. Not to mention the need for capital.
That is why I have a different solution: I would be crazy to post it here. But it involves a similar idea but with an entirely different solution.
As for #1, I agree, but there are shows that get canceled that are very large niches, they just aren’t necessarily large for broadcast. But, I still agree.
As for #2, the premise is that if all the studios participate, they would sink capital in, and that if all the studios participate they could come up with one channel that was already getting carriage to convert. And even if they couldn’t, they could get carriage by paying (which would require capital). In the best of scenarios, it’s a network that doesn’t break even for a while, but that seems true for most networks.
Ok, one big flaw. You use all $300mil in revenue for production of the shows. You won’t have any employees? You won’t get a nice big paycheck yourself? I’m sure there are other expenses to running a network as well.
Other than that (and you may have answered this, since I skimmed a bit at parts), are you just going to have dead air outside of Mon-Thurs primetime?
Julia, read the whole thing or don’t comment.
So that’s what the last four paragraphs were about!
Ok, you know what? I will mention ONE scenario/solution here, and trust that you are an honorable man who will cut me in for 10% when this thing works.
Instead of starting your own network, why not try to sell the high-end shows pulling in 5 to 6 million, to established basic cable channels trying to create content, like TNT/TBS (they still call it both or one of those)?
I know that FOX and NBC have established cable networks they could move shows to, but for whatever reason, they rarely do. So why would TNT/TBS not be an option? You would know better than I. If Turner was willing to pay production costs, on a lower budget, what would prevent the networks from leasing their rights?
Jack, basic cable nets don’t have the budget for broadcast shows. The point of the Castoff Network is that that’s the whole point of the entire network’s budget.
I didn’t say they would work on a broadcast network’s budget. I said a lower budget. If you try to make the shows on their current budget, you are going to have 6-hours of content per week.
Jack, this is the reason why the castoff network is necessary. Historically speaking, especially when it comes to recent history and one hour scripted shows that aren’t renewed by the networks after a season or two, cable networks pass on picking up shows the broadcast networks cancel.
I think a huge downside that derails it is that it requires cutting costs (and to be fair, in my model, cutting costs is required as well). Beyond costs I’d ascribe the rest of it to the cable nets unwillingness to roll the dice on broadcast network castoffs!
But if you create a network whose purpose is…
That would mean the actors, writers, producers, etc. would all have to agree to pay cuts. Why would they do that when they can just go get another pilot and hopefully a similar paying job?
The castoff network doesn’t require as much cost cutting as most cable networks would, and it’s also possible to model it in a way that at least for the 12 shows that are anchoring the network there aren’t any cuts.
Yes, Julia, under my scenario, they would have to deal with pay cuts, and other budget cuts. It would, at least at first, be a job with lower wages, but they could continue to tell their story. As for why they would do it: because some actors go years between TV or movie gigs. So, it is either less pay on cable, or theater and commercial work for two years.
Robert, but if you bring a solution to the networks, or a different option –even one that revolves around bringing the show to Turner– wouldn’t they at least listen to a proposition that nets them continued revenue on a product they will no longer produce? It is like free money.
Plus, they keep most of the home video rights.
I like your general idea, because I do think SOMEONE must give the networks a reason to begin to think outside of their box. There is no good reason to let 6 million dedicated viewers go, if you have a viable option. I am just trying to be more realistic about the premise. If you can get an established cable network to jump on board, they might even consider your pay-to-view network idea in the future. But first, I think you would need a quicker solution that gets the thought process of no longer just abandoning viable revenue streams because of a lack of slots on your assembly line.
So, in that regard, I am on board for this idea. Where do I sign up as a business analyst?
Yes, my comment was directed at Jack’s last.
As for how to fill the holes, in the second year that will become much easier. You don’t even have to cancel any shows from the first season, and then you can do a 20 week run from Sept to Feb and a 20 week run from March to July. You’ll be doubling your budget, though, so that only works if the net has really taken off. And I figure lots and lots of reruns the rest of the day. Air each episode three times in a day (reair primetime from 11pm-2am, 10am-1pm, 5pm-8pm), and get the rights to air previous seasons. That still won’t fill up all the time, but it’ll make a dent, without costing too much.
Robert, this could be done but you can’t start that ambitious. You’d have to start with say 5 shows. For 9-10pm EST Sunday through Thursday. Of course you’d have repeat viewings that same week. Repeats on Friday and Saturday of the “big,” shows. The rest of the time you could fill up with movies and old canceled TV series. Also you want to deal with the Studios, not the Networks. They’re much easier to deal with. You don’t want to share you income with them either. CBS Productions, FOX TV Studios, ABC TV Studios, and Universal are much easier to deal with. Plus you don’t want to answer to anyone.
Second, you need to shorten your 5 shows to say 12 episodes a season. Now you’re only looking at $120M in expenses for production. Throw in another $80M for employees, reruns of offed shows you won’t be airing new episodes of, and movies.
In fact I think you could really pull it off. You need to alter the “advertisement,” aspect. Think “Promotional Sponsors,” and you may have something.
Heck, if you want to do this, we could. I’m sure properly altered we could get Mark Cuban to foot it too.
You also want to pick the shows. Be creative. If CASTLE gets canned, you’d have to bring FIREFLY. Those fans are freaks. You’d get at least 500,000 paid subscribers right there, but possibly 2M just from those freaks. $6 a month? They’ll do it.
Be picky, don’t just settle for TSCC or DOLLHOUSE. Bring back old canceled stuff like JERICHO, FIREFLY, MOONLIGHT, and VERONICA MARS those fans are freakish and would likely get you your subscriber base.
Jack, in theory it sounds good, but in practice I am not much for bucking trends. And there is a very strong trend that shows broadcast networks don’t renew get shopped to other networks all the time, but never seem to get picked up.
I’m not talking about Law & Order:CI moving from NBC to USA (also owned by NBC Uni) after 5 years , I’m talking about Moonlight, Jericho, Swingtown, Liptstick Jungle, etc.
Nick, the problem is, why would people be willing to pay for a network year round when there are only new episodes 3 months a year? Which will be a problem anyhow with running only 20 episodes, but at least with 20 you can put a break in at 10 more easily to spread them out a bit.
Right, but I am talking specifically about the shows on the bubble. Starting with the ones that are not Dollhouse or Terminator. More like, Life or Chuck. Along those lines. Wouldn’t it be more difficult to start the network from scratch, without anything to show for it, than to “buck the trend” and then receive support?
After all, there is precedence for this, but usually with shows whose brands are in the general consciousness of the public. Though, if you COULD get the capital and navigate through all the hoops, I think it is an excellent idea, even if, as a business analyst, I would not suggest my venture capitalists invest.
Nick, I like how you’re thinking about it. I’m not sure you can sell it for $6/mo with only five shows and twelve episodes. You basically can only run one new episode a week that way and have something new most weeks. But given Showtime and HBO, I suppose that is just a sales job.
I’m not sure Mark C. would go for it. And I’m not enough of an entrepreneur to run the thing (I’m OK being down a notch or two and paid well!) But if most of the revenue was from subscriptions and sponsorships (rather than advertising) he’s at least a little more interested. He does believe in having products you can SELL, and this might be one.
And I agree with you in general about being creative with what you bring, however, it seems like it’s a lot easier to keep LIFE afloat right now than it is to bring back Firefly or even Jericho at this point. But I would agree those are good choices in terms of ramping up the subscriber base quickly.
Jack, I predict your method so far would save maybe a show or two every five years from the people who are willing to buck the trend. Would your approach be easier? Yes! My way is much harder, but I also think much more effective at saving fan favorites.
I do like Nick’s idea of shortening the seasons. Especially since you could still sell the season box set for full price. The niche fan who would subscribe, would pay for it anyway. They are all idi… very dedicated.