Trimming Where They Can
Audience erosion at the broadcast networks continues. But while the networks’ share of the viewing audience keeps shrinking, the cost of making that programming keeps inching up. This doesn’t mean, however, that executives aren’t trying to rein in expenditures when they can.

The downward pressure, according to David Stapf, president of CBS Television Studios, “reminds us to maximize production efficiencies, which is a good thing. You should constantly be looking at your business, whether you’re making refrigerators or TV shows.”

Studios are wringing out savings on a micro level. They’ve mostly converted from film to video, which amounts to a savings of about $20,000 and $30,000 per episode for comedies and dramas.

Productions are also using documentary-style methods including hand-held cameras, which negate the need for expensive and time-consuming steady-cams, dollies and lighting. That, in turn, makes for shorter days on the set.

Other cost-saving tactics include the use of multipurpose sets; importing formats (fall contenders The Quinn-Tuplets, from CBS, and ABC’s Generation Y are adaptations of series from Israel and Sweden); and taking production out of Los Angeles to the greener tax-credit pastures of Louisiana, Michigan and New Mexico. Studios are also cutting back on over-scale items such as pre-payment of residuals and luxury trailers for stars (the latter can save millions).

Studios are working as well to secure international co-financing to push costs down. Fox Television Studios has made this its business model. The studio has three shows bowing this summer—NBC’s Persons Unknown, The Good Guys on Fox and ABC’s The Gates.

“It’s not like we’re trying to make shows for the cost of your local high school play,” says David Madden, executive VP at Fox Television Studios. “We’re trying to make shows that will work for broadcast networks on cable budgets.”

ABC’s summer series Rookie Blue, a co-production with Toronto-based Canwest and E1 Television, skipped the expensive pilot process and went straight to series. Scoundrels, an adaptation of a New Zealand series from ABC Studios, needed only a script adaptation. And because Scoundrels went straight to eight episodes, ABC Studios has something to take to the foreign market regardless of how the show performs on ABC. You can’t do that with a busted pilot.

And while this model for now is largely relegated to summer replacement series, it allows networks to keep spending big on big-budget fall pilots while not closing up shop in the summer.

But there is evidence that the broadcast networks are largely playing it safe this pilot season while taking tentative steps at bulking up after the anemic pilot tallies in the two years following the WGA strike. An examination of series in development reveals an emphasis on traditional fare that has great back-end potential (crime procedurals and multi-camera comedies, which are cheaper than single-camera comedies). NBC has the Rashomon-esque The Event, in which an assassination attempt on the president is told from multiple points of view, but in general fall contenders are light on the kind of expensive, high-concept shows that are ending (Lost, 24) or failed to catch fire this season (FlashForward).

That the success of ABC’s Modern Family has not spurred a rash of single-camera comedy imitators in development this season is perhaps a sign of the belt-tightening times. The success of freshman procedurals The Good Wife and NCIS: Los Angeles (which sold in syndication for north of $2 million per episode), combined with the fact that several veteran crime dramas are showing signs of age (the CSI and Law & Order franchises), has likely juiced the networks’ already hearty appetite for procedurals.

But making a hit series is capricious. Playing it safe may mean never having to say you’re sorry (to critics, viewers and network CEOs), but it also drags down your odds of hitting paydirt.

“A ratings success on NBC trumps everything,” says Marc Graboff, chairman of NBC Entertainment and Universal Media Studios. “That’s why we ultimately greenlit Parenthood. That’s why we ultimately greenlit 30 Rock and The Office. Yes, on paper, looking prospectively, if they’re not hits, they’re not going to make big back-end. But our primary focus right now is turning the network around. So, for us, the ratings potential for NBC is the number-one factor. And then you hope that you have enough success to generate an aftermarket.”

The pilot process is notoriously inefficient. If a first-year drama costs $2.7 to $3 million per episode, the pilot can run $7 million or more. And if there is A-list talent attached or complicated special effects, the cost escalates. J.J. Abrams is directing the Warner Bros. pilot Undercovers for NBC. The last time he directed a pilot (ABC’s Lost in 2004), it cost $10 million. Sources say Undercovers has a similar price tag.

Comedy pilots are cheaper, but at about $3 million for a half-hour, they’re still not exactly a bargain. ABC has 23 scripted series in development this fall, CBS has 21 and NBC has 20. Fox, which along with The CW has two hours a night of primetime to fill, has 19 scripted pilots in development, including a handful of sketch and animated comedies. The CW has six scripted series in development, including a remake of La Femme Nikita, which has already been on the big screen twice (in France and the U.S.) and the little screen once (on USA).

“People are still going to watch great television shows,” says Barry Jossen, executive VP of studio creative and production for ABC Entertainment Group. “But we’re not going to be able to continue making them at the same price point.”

Pilots, however, aren’t the only aged format sticking around, as networks often still try to hold onto that established franchise for just one more year. For instance, NBC is still trying to make the math work on what would be a record- breaking 21st season of Law & Order without a back-end commitment from TNT, which pays $1 million an episode for rights to the show in a deal that extends for several more years.

Spend Your Way to Success
Hollywood has always existed in a bubble of gold dust divorced from the reality of the wider world. And while efficiencies have been achieved, the underlying model still tilts toward excess. In an interview earlier this year, veteran producer Thomas Schlamme admitted that the hammer has not come down in the form of “enormous financial restrictions.”

“But the need for success is greater, and the patience to let something nourish or grow or change and be something different is harder,” added Schlamme, who is working on the Matthew Perry comedy Mr. Sunshine for ABC at Sony Pictures Television. “And it’s not harder because the networks are desperate, but because they have to answer to a financial situation in their corporations.”

But the bottom line about the bottom line is simple: When in doubt, network television will still try to spend its way out of any slump.

“We all still do very well,” Schlamme said. “These shows certainly aren’t on a shoestring budget. They’re very expensive shows, and somebody has to pay for that.”