In the Lions Den

Our mantra is 'hit 'em where they ain't,'" says Kevin Beggs, president of Lions Gate Television. If his boutique studio can score with enough small projects, he believes he can build a successful business. After all, he knows that, in Hollywood, independent TV producers are an endangered species, trumped by deep-pocketed studios like Warner Bros. and Paramount.

To succeed among the giants, the six-year-old company fashions itself a cable specialist, carefully calculating its shots. The studio's strategy favors thrillers and science fiction, like the upcoming remake of Frankenstein for USA and recent Sci Fi Channel limited series 5ive Days Til Midnight. "Those will sell well internationally and in home video," he says.

Lions Gate is part of Lions Gate Entertainment, a Canada-based entertainment company best-known for independent films like Monster's Ball and Secretary. Though a relatively new player in TV, it boasts two drama hits: Lifetime's crime series Missing and USA Network's thriller The Dead Zone.

This season, the company is producing a handful of TV movies and limited series for ABC Family, FX, Lifetime and USA. Its pilot slate includes two TNT dramas and Showtime comedy Weeds, starring Mary-Louise Parker as a pot-dealing suburban soccer mom.

But the challenge for Lions Gate is to set itself apart from industry leaders.

Today, big media families control production and distribution. Each of the broadcast networks has a sister TV studio: NBC and NBC Universal Television, for example, or CBS and Paramount. Buying their shows keeps rights and profits in-house. This fall, 78% of new broadcast shows are produced by related studios, up from about 60% a year ago. Cable channels USA, TNT and FX enjoy similar synergistic benefits.

Lions Gate's blueprint carries some risks. While cable's scripted dramas are cheaper than broadcast—$1.5 million to $2 million per episode vs. $2.5 million and higher—the back-end returns from international, syndication and DVD are still a gamble. Few cable shows—Monk and Strong Medicine are notable exceptions—are established enough to deliver in these key areas.

Beggs knows that his cable shows won't get $1 million per episode in syndication, à la Law & Order and CSI. But as smaller cable channels grow, they'll need acquired programming. "Who knows where Oxygen or TV One will be in a few years?" he asks.

To keep competitive, Lions Gate runs a lean operation, with about 15 full-time staffers. Everyone is hands-on, including Beggs, a former substitute teacher who broke into TV as an assistant on Baywatch. The company treats its producers like superstars to prevent their defection to bigger competitors.

"I feel like John Wells or Steven Bochco," says Lloyd Segan, executive producer of The Dead Zone. "Lions Gate is entrepreneurial. There is no bureaucracy, no manual. We work together and make the rules." When he needs something approved, be it a budget or a storyline, he doesn't pass through 10 assistants and producers; he dials Beggs direct.

That streamlined mentality also extends to overhead. To keep costs down, Beggs massages efficiencies in the production process. Smaller writing staffs produce their scripts well in advance, and executive producers often double as writers. The crews shoot an episode in seven days, versus broadcast's eight days-plus norm.

Lions Gate also produces The Dead Zone in Vancouver, British Columbia —another cost-control method. The company often shoots in Canada or New Orleans, places with a strong exchange rate or favorable tax incentives. (There are exceptions, like Showtime's Weeds, which is being shot in Los Angeles.)

Even as it hones its cable formula, Lions Gate is plotting new opportunities for growth.

The studio will have its first broadcast shows this season: The Cut, a fashion reality show with Tommy Hilfiger on CBS, and Second Verdict, a courtroom reality show for Pax. Lions Gate Entertainment recently acquired Artisan Entertainment, and Beggs' group is mining the library for TV adaptations, like a reality show based on the 1987 hit Dirty Dancing.

Eventually, Lions Gate aspires to make dramas for broadcast, too. "The upside on the back-end could be so much greater," Beggs says. For now, cable gets the first look.