Indies Back in Vogue

Stand-alones do biggest business in decades

Independent program distributors, left for dead when Multimedia Entertainment and Group W Productions were bought out and subsequently disappeared years back, are suddenly in vogue. Years of consolidation among programmers and station groups, as well as other market trends like increased cable acquisition budgets, have stoked demand for independent product to the highest level in decades. Those factors have also pushed stand-alone program-distribution companies to acquire one another rather than waiting for studio and network buyouts.

When Lionsgate bought Debmar-Mercury earlier this month, it gave Lionsgate domestic distribution of Debmar’s film library, which includes the valuable South Park. But there was another significant aspect to the deal, as Debmar was in negotiations with the Fox stations for Tyler Perry’s first-run comedy strip, House of Payne. The Payne project, earmarked for a fall 2007 start, may have emboldened Fox to bid low for off-network episodes of Two and a Half Men and its own company’s Family Guy, allowing them to go to the rival Tribune station group. (Fox calls its offer “fair.”)

Marketplace dynamics, such as the recent glut of network reality shows, are responsible for the independents’ turnaround, according to Josh Raphaelson, a principal with Ritch Colbert in independent syndication outfit Program Partners. The longtime colleagues import Canadian crime procedural dramas to the U.S., including the successful Da Vinci’s Inquest and two hour-long dramas being marketed under the “Crime Watch” banner. Raphaelson says broadcast’s sustained emphasis on reality in recent years means less scripted fare for syndication.

“Coupled with the growth of cable development and acquisition budgets [and a reduction in international license fees for first-run action hours],” he says, “there is less programming filtering down to the stations.”

That has created an opening for indies like Program Partners, which, since its establishment in 2003, has provided what amounts to first-run programming. The cheaper Canadian dramas cost $1.5 million per episode to produce, Raphaelson notes.

Executives at major suppliers, carrying huge staff overheads and massive programming costs, privately acknowledge that independents can generally provide original content at half the cost (with network comedies costing on average $1.2 million per episode and dramas approaching $3 million). Additionally, independents can entice talent with a bigger piece of the action than the majors can offer. And, in contrast to studios with broadcast groups, they don’t exist primarily to fulfill the programming needs of sister stations.

Those at station groups in the second tier and below say they have grown tired of paying huge license fees, or giving away valuable commercial inventory, for low-rated series just to keep the lights on in a time period.

Combined with potentially lucrative off-network sitcoms like Family Guy coming to market, group owners have become more aggressive about doing business with independents like Program Partners and October Moon.

October Moon has been able to surpass the record of even some leading distributors by getting shows, including off-cable series Real World and Road Rules, on the air every year since 2000. The emergence of a high-profile, independently produced Monday-Friday strip like House of Payne is only likely to intensify demand.

Program Partners is eyeing Canadian sitcoms that could fit into daytime, early-fringe and prime­time-access slots. Meanwhile, former NBC Universal syndication executive Arthur Hasson has been shopping the top-rated Canadian comedy Corner Gas in the States.

Says Raphaelson, “[The push] is a response to a hole in the marketplace.”