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Bubble-Burst

The cancellation bear’s got nothing to write for the CW until mid-March except repeating that Hart of Dixie is certain to be canceled. On the other hand, Bubble Watch’s Tom Shaw has plenty to say about the CW.

Recently, The CW renewed Beauty & the Beast for a fourth season, ahead of the third season even airing. (Worth noting, The CW publicly denied the news at first, apparently solely so the renewal could be part of the traditional Friday bad news dump.) As even The CW seemed embarrassed by the situation, I thought I’d mention some of the numbers that may have had an impact on the decision…

22 vs 52

The simplest answer – and certainly the most PR-friendly for The CW – is that the recently reasonably successful CW has to look to Summer to expand. With only 10 hours to schedule and 8 scripted shows already renewed (plus ANTM), the network has to get creative with its scheduling, and this is the next logical step. After all, The CW has already tried Canadian imports (e.g. The L.A. Complex), and well-outside W18-34 reality (e.g. Whose Line Is It Anyway?) in Summer, and airing first-run programming is the next step.

Needless to say, this move – or more accurately, the timing – doesn’t immediately pass the smell test. The CW couldn’t wait and see what this Summer’s ratings were before the Beauty & the Beast contracts expired and they had to make a decision? The CW didn’t want to see how iZombie or The Messengers rated, or how this year’s pilot crop turned out?

Not to mention that the whole concept is predicated on the regular season schedule being rock solid, when Reign’s performance is mediocre, and The 100, The Originals, & Jane the Virgin are only doing well when graded on the extreme curve The CW has. So some other possibilities…

6 vs 2

Just to get it out of the way: The CW is a theoretically* equal venture between CBS and Warner Bros, yet the number of CBS-distributed scripteds (Reign and Jane the Virgin) was dwarfed by the number of WB-distributed renewals (everything else). With the WBiZombie getting The Flash as a lead-in while the CBS-The Messengers gets dumped to Fridays, there was little reason to expect that ratio to improve in the short term… other than renewing the CBS-Beauty & the Beast.

*Fun experiment: Check out the renewal PR and count how many times “WB” or “Warner Bros” shows up.

88… or just 4?

It’s a common refrain from us here at TVBTN: Syndication economics put such a premium on hitting 88 episodes that any show with three full seasons is guaranteed to get a fourth season, no matter how bad the ratings are, so the show can reach 88 episodes.

Except it isn’t guaranteed anymore.

To be clear, virtually all shows with three full seasons still get renewed for a fourth. They increasingly don’t get renewed for 22 episodes though – Community, Nikita, Hart of Dixie, etc. all ended Season 4 with less than 88 episodes. (Beauty & the Beast will merely be around 70 episodes after Season 4.)

So what’s going on here? These high-level financials are beyond our ability to confirm, but some ideas:

The magic number for syndication is decreasing again. As time goes on and the industry gets more fragmented, the number of episodes syndication prefers has dropped (it wasn’t long ago that 100 episodes was the sweet spot). Considering the rise in cable/cable model shows, that magic number dropping was probably a given – very few of those shows are going to reach 88 episodes only producing ~13 a year. It may well be that 70 becomes the new 88, and three and a half – or two and a half and a half – becomes the new four.

International sales and streaming deals, and their penalties, are growing in importance. These secondary sales have traditionally been such a small piece of the puzzle that their income wasn’t worth basing decisions on, but as margins continue to shrink, their importance grows – and so do the penalties. It may well be that these deals were written under the old assumption that three seasons gets you four – and the losses generated by airing, say, a short Season 4 of Nikita on The CW were less than the penalties their international and streaming deals would have created if there was no Season 4.

Clearly, 70+ isn’t a universal yet – Suburgatory isn’t airing this season, likely to everyone involved’s disappointment – but it is a trend that bears watching.

12 vs 22%

Frequently forgotten is that when UPN and The WB merged to form The CW, another company put out a PR statement as well, as (the now) Tribune Media owned stations agreed to stay CW affiliates through September of 2016.

That date isn’t that far into the future anymore, and in the interim Tribune has both expressed disappointment with the ratings CW’s programming gets them and returned to original programming themselves (Salem, Manhattan). It’s not impossible to see The CW and Tribune splitting at the end of next season – or at the very least, for Tribune to aggressively negotiate what they pay to The CW downward.

While there are (now) only 12 CW Tribune affiliates, they cover most of the biggest metropolitan areas in the country – roughly 22% of the US population. To be clear, I would expect nearly all to all of those markets to find new affiliates for The CW (the CBS affiliates in those markets would be highly pressured to carry The CW on their digital subchannels, if nothing else). The question becomes how much of a haircut does The CW take in the transition – and how much can they survive? Given that the goalposts of even The CW’s public statements keep getting pushed back – they’ve gone from “profitable after broadcast and DVD” to “profitable after broadcast, syndication, DVD, and streaming” (I expect the next iteration to include “and loose change that falls out of actors’ pockets when they come in for casting calls”) – I’m not sure The CW can survive losing even 5-10% of their income in the process.

So what sorts of things would we expect to see if The CW is legitimately worried about its feasibility beyond next season – or at least establishing as firm a negotiating position as possible beforehand? You’d expect to see the network get as many existing shows in as syndicatable a position as possible – say, by renewing their entire Fall lineup- at the expense of new shows that won’t live long enough to be worth anything in syndication by then. You’d expect them to push borderline shows to syndication even if they have to expand to lesser used chunks of the schedule (Summer). And you’d expect them to talk up the portions of their business model (Netflix, Streaming, International Sales) that don’t involve the portion they’re negotiating with…

May You Live in Interesting Times

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There’s no reason the real answer isn’t a combination of all of the above – or even that each encourages the others (worries about the Tribune deal encourages them to get as many shows to syndication encourages airing programming in Summer encourages Tribune to reevaluate the deal). The larger point is, expect more weirdness with The CW over the next 15 months.

Posted by:Steve Baron

VP/Digital for TV station ownership group; Dad to young twins, runner, skier & spend a lot of times in airplanes.

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