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Building the Next Syndication Hit

To strike daytime gold, executives need to be even more creative than show developers 8/17/2008 08:00:00 PM Eastern

Can The Doctors stop the bleeding? Is Howie Mandel the real deal? Is Bonnie truly in the hunt?

Much has changed in the six years since the last true first-run syndicated hit, Dr. Phil, came out of the box with a big 4.4 rating and was crowned the next Oprah Winfrey.

Syndicated shows now have competition coming from all sides, not just from three or four competitive stations in any given local market. Cable and new media continue to grab viewers, and dwindling station resources—meaning lower license fees and less promotion—have forced syndicators to develop shows with a limited economic model in mind, rather than take the big swings that produce the big smashes.

So as this year's new class of shows prepares to debut (see sidebars), the question is, can syndication still produce a hit? (Scroll down to watch clips.)

Executives insist that the next Dr. Phil—a show that currently brings in well over $100 million in revenue annually—could even be among the season's new entries, which include CBS' The Doctors, NBC Universal's Deal or No Deal and Warner Bros.' Bonnie Hunt. Buzz is already building around Dr. Oz, a spinoff from Oprah that Sony Pictures Television will roll out next year.

“There is no question that the broadcast TV industry can still create a hit under the right circumstances,” says Dave Morgan, president and CEO of Litton Entertainment. “The audience is still there. The hardware is still functional. It all works as well as it ever did.”

What future hits will need, however, is that right set of circumstances. The lightning can certainly strike: Judge Judy emerged in 1996 as a laggard, with a then-low 1.5 rating. By the end of the first year, it had risen to a 2.1 before vaulting to better than a 4 within a year. That kind of growth is conceivable, but rare.


"Deal or No Deal" in the Daytime from Broadcasting & Cable on Vimeo.

What new shows have in their corner, ironically enough, is a more relaxed set of expectations. The bar that defines a hit remains high, but in many cases, success is deemed good enough.

Neither studios nor stations have the profit margins to take huge risks on expensive but unproven shows. Studios can't afford to lose $20 million on a big-name talk show that fails, such as NBCU's Jane Pauley's. Stations are unwilling to commit to high license fees and then cross their fingers and hope a show works.

“Stations' financial situations are very challenging,” one executive says. “If stations don't continue to pay at least a moderate rate for new shows, people won't produce them.”

Studios are mostly looking for shows they can produce reasonably and profit from quickly. A show may not blow everything else out of the water, like Dr. Phil in 2002 or Rosie in 1996, but these days there are many ways to judge a show a success: whether it improves the time period for stations, holds the ratings of the shows that come before and after it, appeals to young people and advertisers, and whether it is profitable for both station and syndicator. If a show meets most of these measures, it's likely to stay on the air.

“I wouldn't define a hit necessarily by a national rating,” says Ritch Colbert, co-principal at Program Partners, which is introducing Family Court With Judge Penny this fall. Ellen DeGeneres, for example, averages around a 2.0 household rating, but the show performs for its stations, is advertiser-friendly and now turns a profit, sources say.

TMZ, also widely considered successful, scores around a 2.0 household rating, but after its first year it's frequently ranked third in the genre, beating established programs such as Access Hollywood, The Insider and Extra. It boasts appeal to young people, including young men, and it's less expensive to produce than a standard magazine.


"The Doctors" Are In from Broadcasting & Cable on Vimeo

In the deeply fractured daytime TV environment, improvement has become the name of the game. It's become harder than ever to replace a show with a new program that does even better. Stations will renew a top show out for years to come, figuring that while its ratings will decline, it's likely to outperform whatever else the station might choose to put on.

Consider Debmar-Mercury's six-week trial of Wendy Williams. It's improving its time period in New York by 150%, and doing even better among younger viewers.

“Right now, Wendy Williams is looking like a hit,” says Mort Marcus, co-president of Debmar-Mercury. “There's no chance that a show that works in New York won't work in other places.”

Current plans are to roll Wendy Williams out nationally next fall. If the show's ratings hold or continue building, it should prove Debmar's point.

What the kids are watching

Shows that don't get huge household ratings often continue in syndication if hard-to-reach young people are among those watching. Tyra Banks, for example, only averages a 1.0 among households, but the show performs relatively well among women 18-34, where she's the fifth-rated talker even though she's ninth in households.

“If we don't do a better job of understanding our younger viewers, they'll turn [the TV] off and play Guitar Hero,” says Litton's Morgan. “Viewers demand more stimulation than stale talk, game or court formats. No longer will a microphone, some folding chairs and a studio bring viewers to the set.”

There are various approaches to turning a profit in syndication. One traditional method has been to create an expensive show, deficit-finance it, gather huge license fees and make money after the show has been on the air for a few years. Today, with the television business moving faster, studios and stations are no longer willing to wait three or four years before they see their money. Other profit methods are naturally coming into play.

Some studios produce on the cheap, which is especially true in the court genre. A studio can produce court shows in batches with little-known talent and keep costs down. A show might not garner a huge rating, but it doesn't need to.

“Court has the highest catch rate of any genre in television, and once they catch, they have the longest stick rate,” says John Weiser, Sony's president of distribution. “Since there are eight or 10 every year, expectations are at achievable levels.”

More common is producing a show with a traditional cost structure, getting reasonable license fees and then looking for ancillary revenue streams, such as product integration and digital distribution. “One of the things we're experiencing already with The Doctors is the nerve it's hitting with advertisers,” says John Nogawski, president of CBS Domestic Television. “That's the thing with some shows out there. Even with a lower rating, they have been able to sustain themselves because they get a good response from their audience and their host is extremely likable. Those are things you can't undervalue.”

Whatever the affordable bet may be, conventional wisdom is you still have to shoot the dice with some gusto to score today. Rarely if ever are the crazy hits or enduring successes found among the 11th knockoff of a tired genre.

One offbeat method is to simply finance the show yourself, as Tyler Perry did with his first-run sitcom House of Payne. Some studios choose to work with a partner to share costs (and, of course, the upside), as Debmar-Mercury is doing with Hasbro on Trivial Pursuit: America Plays or with Fox on Wendy Williams.

“These days, you have to create new revenue streams through integrations, license fees and ad sales,” says one syndicator. “Are the economics a lot harder to get to today? Absolutely. Can it be done? I know it can be done.”

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