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Cable Sees Syndication Riches

Strong summer series give confidence for aftermarket sales 8/31/2007 08:00:00 PM Eastern

Basic cable is having its best summer ever with a broad slate of buzz-worthy shows. Now studios want to translate summer’s sizzle into syndicated success.

Ad-supported cable networks have reason to brag this summer: Original series are attracting record-breaking audiences and critical acclaim. Disney Channel’s High School Musical 2 drew cable’s biggest audience ever at 17.2 million viewers. And basic cable’s 70 or so networks are drawing more than twice as many viewers this summer as the six broadcast networks, according to research compiled by Turner.

In fact, the six broadcast networks are down 11% and 14%, respectively, in prime time this summer versus last among households and adults 18-49, respectively, using live plus seven-day ratings, while ad-supported cable is up a bit—1% and 2%.

The momentum is fueling new selling strategies by studios who are packaging their best shows for international distribution, DVD sales—and domestic syndication. Some are even turning the old syndication model on its ear, trying to sell cable series to broadcast networks.

Some of cable’s strongest originals are delivering the most robust ratings, including TNT’s The Closer and Saving Grace, USA’s Monk, Psych and Burn Notice, TBS’ House of Payne, The Bill Engvall Show and My Boys, Lifetime’s Army Wives, FX’s Damages and AMC’s lower-rated but critically beloved Mad Men.

“In the same way that broadcast fed cable before cable started to do original programming, cable could feed broadcast. We’ve already seen it with shows such as Sex and the City and South Park. There’s no reason we won’t potentially see it with some of cable’s dramatic hours,” says Bill Carroll, VP, director of programming, Katz Media Group.

Studios have more places to sell their product than ever before. While most Big Three station affiliates are sated, Fox, CW, My Network TV and independent stations have plenty of slots on their schedule. Moreover, emerging platforms—such as broadband and mobile TV—also offer new revenue opportunities. All of that is bringing syndication out of the doldrums of consolidation.

UNORTHODOX BUSINESS MODELS

“Syndication is much more entrepreneurial than it used to be, that’s what I really like about the business right now,” says Jim Packer, co-president, MGM Worldwide Television Distribution. MGM, for example, has sold TV stations a year-round package of four off-cable originals, called MGM Select, that includes The Outer Limits, Dead Like Me, Poltergeist and Jeremiah. “The four-show format gives stations more ways to sell an advertiser,” says Packer. “If they don’t like a particular show, they have three other bites at the apple. The station community embraced it because they want to have different kinds of product,” says Packer. CW, My Network and independents bought the package for weekend afternoons and early and late fringe, he says.

The number of episodes that are required for syndication used to be 88 (four seasons) but that’s become a lot more flexible. Now shows can go into off-net syndication (particularly for weekends runs) with far fewer episodes, or they get packaged together with other shows. “As the market has evolved, distribution has become a more sophisticated process of finding the combination that best suits the asset at the time,” says John Weiser, president of distribution for Sony Television Entertainment.

That means every hot show offers its own business opportunity. Fox’s 24 doesn’t syndicate well on TV stations, but it’s going gangbusters in DVD sales. NBC’s Law &Order is possibly the most syndicated show on the planet, but few people buy the DVDs. Fox’s Family Guy was cancelled on the network, bloomed in cable syndication, exploded in DVD sales and now is a long-term part of Fox’s Sunday night line-up.

Carroll and others say if any cable show is sold to a broadcast network, it will be The Closer. That’s what Warner Bros.—The Closer’s producing studio—is betting on. The studio is trying to break the mold and sell The Closer and FX’s racy Nip/Tuck to broadcast networks as summer replacement programs.

“We’re in conversations with the broadcast outlets,” says Eric Frankel, president of Warner Bros. Domestic Cable Distribution. “When you see what happens to broadcast in the summer—they all fall off from their October through May ratings—so we are marketing these shows to broadcasters. We could deliver them as affordably as the reality programs they are currently airing.”

But many in the broadcast industry say that while The Closer, in particular, could easily fit on broadcast prime, it’s unlikely that a big network is going to buy off-net basic cable shows for its air.

That hasn’t stopped Warner Bros. from exploiting other creative package deals in the U.S. In particular, Warner Bros. is hoping to sell a dubbed version of Nip/Tuck, which is cable’s top-rated show among adults 18-49, to a Spanish-speaking audience in the U.S. “One could argue that Nip/Tuck is the world’s greatest telenovela,” says Frankel, who notes the show already does well in many Spanish-speaking territories. If he managed to close such a deal, it would be rare coup. The U.S. Spanish-language networks—Univision, Telemundo, Telefutura and others—air very little off-network programming, although some networks say they are willing to consider it.

“We’d be open to acquiring off-net content as long as the quality and, obviously, the costs are aligned with our focus on delivering the best programming to our audience,” says Carlos Bardasano, Telemundo’s executive VP of entertainment.

These days, TV stations are in dire need of sitcoms for access, early and late fringe—hence the success of Comedy Central’s South Park and HBO’s Sex and the City. Both shows run in late fringe on CW, Fox, My Networks and independent stations. South Park also runs in originals and repeats on Comedy Central. Sex and the City also runs on TBS on Tuesday and Wednesday nights. Both shows are attracting die-hard fans as well as brand new audiences in their syndicated runs. That’s why HBO has high hopes for shows such as Curb Your Enthusiasm and Entourage, both of which are expected to be syndicated soon.

Piggybacking on premium marketing can help. A&E has turned HBO’s marketing of the The Sopranos into a ratings hit in syndication. Spike TV strips FX’s The Shield—that was the first time a basic cable net bought a show that originated on a competing basic cable net—although the show isn’t the ratings blockbuster the network wanted.

LACKLUSTER RESULTS

Even with those new opportunities, syndicators have plenty of obstacles to overcome as they try to innovate. Cable dramas face the same problems as broadcast network dramas when it comes to reaping back-end benefit. With shortened seasons, cable originals don’t offer enough episodes for anything other than weekend syndication on TV stations. Even if cable-originated dramas make it to broadcast, such as Sony and Fox Television Studio’s The Shield, so far they haven’t performed particularly well.

“The ultimate payday for a really big broadcast show is much bigger than a really big cable show,” says David Madden, executive VP, scripted programming, Fox Television Studios. “In cable, you are playing for less risk, less reward. You are trying to get a single and if you are lucky, you can maybe stretch a single into a double.”

Moreover, because basic cable networks tend to use original series to brand themselves, by the time they make it to syndication most are already considered too closely associated with their originating networks. And cable networks often will buy the off-net run of their own shows—like USA and Monk, or Lifetime and Strong Medicine—and strip the repeats while airing originals in primetime to keep the brand close to home. That keeps the show largely out of the off-net market, although NBC Universal has sold Monk to TV stations for weekend runs starting next fall.

BY THE NUMBERS

And while cable shows might be getting buzz, the total number of viewers, more often than not, falls short of broadcast networks ratings. The Closer, cable’s top-rated show, averaged 7.9 million viewers during this summer’s run, the show’s third. USA’s Burn Notice and Lifetime’s Army Wives average closer to four million viewers an episode. Comparatively, NBC’s America’s Got Talent, this summer’s most-viewed show, averaged 11.1 million viewers, while an in-season broadcast top-10 hit averages around 13 or 14 million viewers.

Often TV stations prefer to buy big broadcast shows because stations don’t have the resources or air time to promote unknown quantities. And the past performance of shows that have been syndicated to TV stations off-cable backs this point. In addition to airing on Spike, The Shield, for example, is cleared on stations that cover 100% the country in weekend syndication, averaging a 1.4 weekly household rating. That makes it the seventh-rated drama in weekend syndication, tied with Program Partners’ DaVinci’s Inquest.

“At this point, I don’t know that there’s enough information on how effective these shows would be in front of a larger audience,” says Paul Karpowicz, president, Meredith Broadcasting Group.

Still, off-cable shows can represent fresh programming for TV stations. “We’re always interested in shows that do well,” says Caroline Chang, program director at Cox’s Fox affiliate KTVU and independent KICU in San Francisco. “Whether it’s off-network or off-cable, I really don’t care.”

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