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Fox Television Studios Limits Losses, But Can It Produce A Hit?

Categories: TV Business

Written By

November 14th, 2009

defying-gravity-02

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.

via latimes.com.

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!

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  1. Spartan

    When I saw the pic for Defying Gravity, I thought they may actually have a time set for the rest of the eps, nope – ABC Sucks

  2. daniel patrick

    isn’t that what they are doing with persons unknown too

  3. Partnering with other countries does seem like a good idea, but I’m pretty sure the whole “no pilot” thing is a terrible idea. NBC tried that for development of the 2008-2009 season, and they ended up with exactly one show that they kept for this season. (Southland doesn’t count, since it was canceled in the end. ;) )

    Yes, pilots are expensive and most of them end up being a complete waste of money, but without them, it’s impossible to know what you’re really going to get. I wonder if there’s some way to make money off of pilots that aren’t picked up. It would be interesting to see a studio try to make a two hour movie for a pilot, which can then be released on DVD if/when not picked up. Have two different ending scenes, one for if it gets picked up, one for it if doesn’t. It would cost more initially, but maybe they would be able to make enough money back to make it worth it?

  4. Bitey

    From what I understand Julia, many networks option all rights to the story/concept covered in the pilot, so there might have to be a LONG time before they would release it back to the studio. Also, when I viewed a pilot preview of shows a few years ago they were obviously shorter than the full episodes would have intended to be. The shows I saw were “Soul Mates” and “City” and they never made it to the airwaves, btw. I don’t know if the extra short/extra cheap pilot format is still in effect.

    However, plenty of 5+ year old shows run on cable, and if an anthology of horror/supernatural can work with Twilight Zone’s various incarnations, perhaps these pilots could be categorized by genre. Maybe fill the rest of the necessary time with people talking about the project and where it would have gone and that would still be something to sell and even cheaper than a two hour movie. There have to be at least enough leftover pilots for Romance, Comedy, Action, etc. to do anthologies cheaply for some cable network somewhere.

    Regarding the thread’s topic though, I can tell whether I like a book without paying people to act it out. I don’t see why a script would be so different except that it would weed mistakes out from the casting department.

  5. Bitey

    Or a pilot would weed that out from the script, rather.

  6. Bitey, there are two types of pilots. Regular pilots are full length episodes. Pilot presentations are shorter, usually between 15-30 mins. What I’m proposing would be longer than a normal pilot anyway. And it would be made with the intent that it could be sold on DVD if not picked up, so I’m sure the studios and networks could work that out ahead of time. But in the case of shows that are produced for a network that is owned by the same parent company as the studio, I can’t see any problem at all.

    And the book analogy doesn’t really work. I’m not sure how many scripts you’ve read, but trying to imagine how they will end up on screen isn’t an exact science. I’m sure you’ve read books that you loved that were turned into movies you hated. It’s the same thing, and it’s not just down to casting. Some things just don’t work on screen the way they did on paper.

  7. Niobe

    What Julia is suggesting is more or less what was done way back when with Lynch’s Twin Peaks and Mulholland Drive. With Twin Peaks, the show was picked up, and the extra footage worked into later episodes (but the entire pilot movie was released on video), with Mulholland Drive, it wasn’t and extra footage was added to the end for a theatrical release.

    The only problem is that because of the rights being sold for video release, the box set of season one of Twin Peaks does not contain the pilot episode.

  8. Chris

    Glee is not a hit?

  9. Chris, Glee is not what this article is talking about. It’s not a joint production which splits the cost.

  10. Julia is correct, but perhaps I could have been clearer in the post. The cost/risk sharing method described in the article as being used by Fox Television Studios has yet to produce a hit.

  11. CK

    They have found ways to cut costs and minimize losses on productions. It’s pure genius to pre-sell 13 episodes overseas where that number of episodes is financially feasible and avoid the expense of a pilot. But for real cash flow, one cannot simply cut costs (uh, hello NBC), one has to increase the revenue. In other words they need a hit TV show which runs for a few seasons.
    A pilot is a necessary part of the process. Think of the synopsis for House: Obnoxious, drug-addicted MD insults patients and staff yet is a brilliant physician. Hugh Laurie was virtually unknown in 2004 and no one would have had any idea how this premise could have worked as a TV show. You need a pilot of some sort.

  12. Bryan

    I’m not convinced that going to series without a pilot is a bad idea in itself. Producing pilots is such an ancient piece of conventional wisdom that it could do with some examination, and creating a strong pilot doesn’t necessarily mean the producers have cracked the show (it often just means they were savvy enough to hire somebody like David Nutter or James Burrows to put it over with the network).

  13. Kermonk

    The problem with current TV is they are 1% plot and 99% “drama” – try changing that a bit.

  14. Brian C

    When is there new show Company man starting?

  15. Cullen

    In addition to being ratings failures, both Defying Gravity and Mental were pretty terrible shows which isn’t a good sign. If Fox Television Studios produces a good show with bad ratings then I’d have a lot more confidence in this model.

    Personally I still think pilots are the way to go as they can be pretty spectacular (Lost, FlashForward). To cut losses on pilots that aren’t picked up, maybe networks could package all of them into a DVD which could then be sold. Not only would the networks be able to make a little extra revenue but tv fans would benefit by possibly stumbling across some gems (Virtuality).

  16. Why doesn’t any network produce an anthology series whereby they show pilots that were never picked up for that season. Viewers could vote for their favorite pilot. Then, have the final episode be a clip show showing scenes of the previous 22 to 23 pilots and the winner with the most online/telephone votes gets picked up for a series. That would be a superb idea!!!!!

  17. I think if Fox hadn’t aired Defying Gravity and Mental during the summer, they would have had a better chance of survival.

  18. Oops, I meant if ABC hadn’t aired Defying Gravity during the summer, and Fox hadn’t aired Mental during the summer.

  19. Ya know, it’d be ironic if NBC/ABC/Etc are all entertainment interests who lose money on news because no one’s watching, while Fox has all the news, but loses on their fiction, ’cause no one’s watching. :)

    I mean, NBC for instance, is owned by GE; they’re happy to drive their news into the ground if this “green” initiative will mean they get to make wind turbines. And the biased coverage really shows.

    Are the two Fox units actually related?

  20. Brian, probably best to keep the crazy conspiracy theories in the comments for the cable news posts.

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