Off-Net Exclusivity May Be Dead
Stations don't have the cash to deal the way they used to
By Paige Albiniak -- Broadcasting & Cable, 3/23/2009 2:00:00 AM
Warner Bros.' Two and a Half Men may be the last off-net program to be sold exclusively to TV stations, say syndication executives and analysts.
In 2006, Tribune Broadcasting paid enough to secure Two and a Half Men exclusively for the show's first four years in syndication, holding off its cable premiere on News Corp.-owned FX until 2010. That used to be the rule for sitcoms, but now it's the exception.
“The movement of the whole industry is to figure out how to play all the platforms and take advantage of that distribution,” says one syndication executive. “That's how we make up the dollars. But one reason Two and a Half Men is doing so well is because it's not on cable. I'm not sure I'm gutsy enough to say that's the last time we'll see a deal like that, but that's certainly the movement.”
Two and a Half Men premiered as a strip on TV stations in September 2007. The show got off to a bit of a slow start, but by early 2008 it had become syndication's top sitcom. Today, it averages more than a 5.0 household rating, often beating Twentieth's second-place finisher, Family Guy, by a full ratings point.
Both sitcoms have been credited with revitalizing the off-net sitcom business, as well as Tribune's TV stations. Two and a Half Men has earned Warner Bros. approximately $3 million per episode, including station, cable and barter sales, according to industry estimates.
While broadcasters would love to have exclusive rights to off-net sitcoms, they are unable to pony up the cash that such rights require. And there are only a few station groups in the major markets that still bid for off-net sitcoms, with Tribune and Fox the two largest buyers. If one or the other declines to bid aggressively, prices fall. That's why syndicators have turned to cable networks to make up the difference.
This fall, NBC Universal's The Office and Twentieth's My Name Is Earl each will premiere in broadcast syndication, but both shows have been repurposed twice a week on TBS since fall 2007. This fall, the two shows will air as strips on both TV stations and TBS.
This year's hot sitcom property is Twentieth's How I Met Your Mother, which sold for an estimated $2.8 million per episode and will premiere on both TV stations and Lifetime in fall 2010.
Exclusivity also is off the table for off-net dramas. In May 2008, CBS Television Distribution sold CBS' Friday-night drama Ghost Whisperer to broadcast network Ion and to two cable networks—NBC Universal's Sci Fi (which is changing its name in July to SyFy) and Rainbow's WE TV—for an estimated $700,000 an episode. That sort of trifurcated deal is now the norm.
“You want to monetize your asset on as many platforms as possible,” says another syndication executive. “Frankly, it depends on what you can get away with.”
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Kevin, that sounds pretty much like... the radio business - both terrestrial and satellite. Television is getting ready to join them both in the toilet.
T Dog - 3/24/2009 2:00:24 AM EDT
I agree with Kevin, but I don't think it'll happen till large broadband can be brought about for affordable prices. This will allow people to actually view TV comfortably from the Internet. Many of these low cost "high speed" Internet deals cap the limit under 700kbs, which is "ok" but not for viewing a lot. When we can get 3.0mbs and up at $10/month or less then we'll see the issue take off
Eric Post - 3/23/2009 11:42:45 AM EDT
This is the death nail for Broadcast TV. Without exclusivity of content, there is no longer a reason to tune to TV. Broadcasters have been giving it away for so long now, especially to the internet that pays nothing for acquisition of the content, that consumers have come to expect it free and on demand. Well, there you go Broadcasters; your brave new world is here ... except you won't be a part of it. Feel free to continue to cut-back until you all eventually go belly-up. It's interesting to contemplate who will be paying the freight in the future for the production of CSI, etc.
Kevin Mirek - 3/23/2009 10:37:06 AM EDT
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