We don't see a lot of information on the business models for TV studios (the companies that produce the shows, as opposed to the networks that air them), but today's article in the LA Times is an interesting look at Fox Television Studios strategy. Note: the broader Fox conglomeration has other studios that do not employ this strategy, like 20th Century Fox Television. The strategy below is specific to Fox Television Studios:
Fox Television Studio's strategy, on the other hand, is to co-produce shows with international partners willing to commit to a series right from the start -- bypassing the expensive and uncertain pilot process -- and sell the completed shows to a U.S. network. A similar model has been used to finance production of independent films before they find a distributor.
Last summer, for example, Fox Television Studios was able to sell 13 episodes each of the dramas "Mental" and "Defying Gravity" to Fox and ABC, respectively, with backing from several international partners.
The advantage to a network is that the fee they would pay for a show is dramatically lower than the $1.5 million to $2 million per episode that has become the industry benchmark.
So far, Calemzuk's track record is mixed. Neither "Mental" nor "Defying Gravity" survived past their initial summer run, and no amount of creative financing can transform a show on the bubble into a hit. From a financial standpoint, however, it wasn't a disaster since both shows were fully protected.
"At worst you come out break-even as opposed to losing $10 million," he said.
There's something in the article for everyone. For folks who think the current studio model is the way to go, they can point to a lack of hits produced with this strategy. Folks who like Fox Studio's strategy can point to the lack of losses. Enjoy!