In the aftermath of Jay Leno in primetime, media analyst Larry Gerbrandt takes a look at the risky economics of one hour primetime dramas for THR.
The article confirms some of things discussed here, some of them regularly, in posts and comment threads:
- 88 is the new 100 for stripping a show Monday-Friday in syndication
-American Idol generates $16 million an hour in advertising revenue
-production costs for an hour drama typically run $2.5 million - $4 million per episode
-basic cable companies have been snagging up the rights to syndicate broadcast hits for between $1.2 million to $2.3 million
-a robust international market has helped defer production costs
Unsurprisingly based on the cable TV schedules, syndication deals to basic cable include the rights to LOTS of airings:
Procedural dramas, in particular, hold up well in their cable windows, where many deals include rights for 30-60 airings, not including the occasional 24-hour repeat marathons.
The article also gets into a discussion about why in this day and age a network would ever take on content that wasn't produced by one of its own studios.
I keep wondering if the networks really consider Leno on PT a failure then. I'll bet it was generating a hefty profit and I'll bet someone else tries the same thing in a couple of years. Maybe not 5 days a week but maybe 1 or 2.
Every few years someone tries to put a new variety show in primetime, so I'm sure they'll try again. Granted, it hasn't worked for a while, but they'll keep trying.
Just out of curiosity, how many minutes of advertisements air during a one-hour drama? 15-20?
Oh, we had a full discussion on this once, breaking it down into national ads, local ads, in-house promos, PSAs and station identification…let me see if I can find it..
I don't think NBC ever thought The Jay Leno Show was a failure. The affiliates thought so. They needed to be placated at least until the Comcast deal is approved.
NBC didn't suddenly change course and add lots of scripted shows. Parenthood's debut was delayed from September to March due to Maura Tierney's cancer diagnosis and Lauren Graham's replacing her. It's clear from the marketing blitz and the post-Biggest Loser timeslot that NBC believes in the show.
Otherwise, there were no new scripted shows to debut after the Olympics. Two Law and Orders were moved to 10 p.m. Dateline is still on Fridays. The Marriage Ref got the Thursday 10 p.m. as a stopgap. I think it'll be renewed but it won't have that timeslot in the fall.
I'm not sure if anything conclusive ever came from that. But my memory could be bad. In any case, 15 minutes of national advertising or the equivalent of thirty 30 second spots is in the ballpark.
I can't find our original discussion, but this report from TNS Media Intelligence (no idea how legit they are) says national ad time averages just under 14 minutes for hour-long scripted shows (that includes network identification, promos, and PSAs but not local ad time).
http://www.tns-mi.com/news/05042009.htm
88 is the new 100 for stripping a show Monday-Friday in syndication
So it's official now – 4 regular seasons are enough.
Still, some shows got syndication deals with less episodes, like Two Guys and a Girl, which had 81 episodes over the course of 4 seasons. Do you think Ugly Betty will get a syndication deal at 85? (Not that I care about the show, I'm just curious.)
This doesn't bode well for Old Christine at all; on the other hand, the Til Death-tyranny could finally be over!
a robust international market has helped defer production costs
This does come as a surprise to me. So the international revenue does count for something. Still, I can't imagine it could save a show as dead as Heroes…
The international market does help defer costs, but since most shows go to the international market, I'm not sure there's enough difference between international money from show A versus from show B to make a difference in renewal decisions. Really, how many shows aren't aired in other countries? And how many shows get good ratings overseas while tanking here?
I was wondering if that $2.5 million – $4 million is for all dramas. I see a lot of discussion on older shows costing too much and was wondering if they go above that 4 million and if $2.5 million – $4 million is where new shows start.
According to that 24 has a budget of $6 million, so it pulls a 3.0 and no one thinks of saying that surely 24 must be making FOX loose money (even if its has a lower liscence fee). Last fall Heroes had a budget of $4 mil and a pull of a 3.6 in the 18-49 demo and there were whole pages devoted to how NBC was loosing money on Heroes. What a odd world… That said I do think the papers in the US do have a negative slant towards NBC
I think while thats true I would have thought with broadcast networks suffering from falling ratings that every season internation sales becomes more and more important. It would be interesting to see how much money a show gets from international sales. Plus while most shows are sold internationally I would imagine lost are sold to smaller networks/channels. For instance theres been inflation in the number of US imports to the UK but there has been a loss in the number on mainstream networks.
Plus most shows that are likely to get cancelled or bad ratings never do well internationally due to the fact international salesmen are scared it will be the same in their country. I mean lost of ill fated shows don't make it to the UK for instance, and those that do are on small networks (Dollhouse, Human Target and Knight Rider all went to Sci-Fi UK which is a small channel).
All that said without seeing the actual numbers its hard to say whether international sales has much of an effect (maybe it has more or less that we think). I mean even THR's were estimates.
This is interesting and informative.
Didn't you have a post a couple of weeks ago about the revenue of the top shows. In that report, you referenced that CSI (Vegas) receives about 4.2 million per episode in revenue and that it (CSI) was somewhere around 7th-10th in revenues. Many others then operate at (much?) less revenue per episode.
If that is the case, then it would seem to indicate that many / most procedurals operate very close to a “poverty line” with regard to their ratio of cost to revenue. . . at least with regard to first run showings. Now the procedurals can and certainly do supplement this via profitable re-runs. An option that the serialized shows (e.g. Greys) don't really have.
I guess it underscores the importance of hanging on long enough to get enough episodes for syndication where it becomes money in the bank
I think networks should really rethink how much they spend on drama's to begin with. You shouldn't go in the red on the hopes that you recoup later. Your show is never going to reach 88 episodes if it's canceled for being to expensive in relation to its ratings. If drama's were less expensive the pressure to be an immediate hit might be lessened and shows might be given a chance to grow an audience. I think the networks should be going toward production costs closer to those of cable shows.
Although as a rule there's good correlation between success on US airwaves and success in other countries, there are often anomalies. I remember that “Starsky & Hutch” was this enormous success in the UK years and years after it was even airing here. Moderate successes here are sometimes monsters overseas. It's still a crap shoot. The weirdest tv experience I ever had overseas was sitting in a Brussels hotel lobby eating dinner with a prime-time “I Love Lucy” with Flemish subtitles on the TV.
katie_kat – I think that even some of the rabid Leno-haters on this site would tell you that they didn't have a problem with a primetime variety show. Just that it was 5 days a week. So you're probably right. A primetime variety show is not an automatic loser, and could be very profitable, and it would be much smarter for the next network to try it only 1 or 2 days a week.
Being the Chuck fan that I am, I read this section with interest:
“of late, the international market has been robust enough to cover most of the deficit and even put some shows into the black, with top hits raking in as much as $2.2 million an episode from all foreign territories combined.”
Heroes fans have always argued that the show does well overseas and I have always dismissed that argument as not being relevant to the Chuck/Heroes showdown.
Have I been too dismissive of this argument? If Heroes is profitable with the ratings they are getting and they are getting close to syndication numbers, won't NBC seriously look at bringing it back?
Zeker,
The international data is harder to come by, but if they're making money it certainly doesn't hurt Heroes chances of squeezing out some more episodes. Relative to Chuck, it's all positive because even if Chuck has decent international licensing, NBCU doesn't make anything from it.
Similarly, in the past Heroes DVDs sell MUCH better than Chuck DVDs and, NBCU makes money on Heroes DVDs and doesn't make money. Even though season 3 of Heroes DVD sales were down versus season two (which were down versus season 1), Heroes S3 was still the #4 TV show DVD in revenue in 2009.
A network is in the business of attracting eyeballs, not minimizing risk. Honestly, no business can be set up solely based on the principal of minimizing risk. You are trying to sell something, no matter who you are, and as soon as you drastically alter your practices so that minimizing risk is more important than selling your service and/or product, then you are quickly out of business. At best, you limp along, neither making nor losing money, simply providing a home for employee paychecks.
The problem with an article like this is that it blows off the billion dollar upside of a hit show in less than a paragraph. It takes no issue with a network like NBC altering its philosophy from trying to make money to trying not to lose money (thus saving short term exec jobs at the expense of long term corporate profits). Who goes into business with the rallying cry of, “Let's just try and break even!!!”
The problem with producing dramas is that you might lose money, but the upside is that you might make a billion dollars. With the Leno experiment, the downside was (theoretically) lower, but there was no upside. And, as they found out (and as many could have told them), there actually was a HUGE downside to failure even at Leno's lower rates.
This is at the heart of what is wrong with our economy right now. The largest corporations are so overstuffed and top heavy that they have completely lost sight of what business is about: making money. Innovation and risk are now anathema to execs who are more interested in keeping theirs rather than doing something, so they are spending more skull sweat and time on looking for the smallest amount of risk rather than the potential for the largest amount of payoff. And that attitude really kills when your business is (again, theoretically) creating art. You can't create art, no matter how minor it may be, by feeding everything into the Minimal Risk Machine. Even over at CBS, where they produce one procedural after another, at least they have identified their target audience and gone after it in an aggressive fashion, spending time and resources on making the best procedurals they can make.
What is NBC's target audience? People who want cheaply produced infotainment? Does that audience even exist anywhere in the world?
With the Leno experiment, the downside was (theoretically) lower, but there was no upside.
There certainly was an upside for NBC, Leno was making a big profit for them. The affiliates are who had the downside with Leno. And I really believe that if Comcast wasn't in the process of buying NBC, NBC wouldn't care what the affiliates thought about Leno.