Syndicators who get premium license fees share a secret: Knowing a cable network's brand strategy is the key to their pocketbook.
“You have to be strategic and smart about how you market the product.” says Scott Koondel, executive VP of off-network, cable and interactive media for CBS Television Distribution. “You have to know the network's original strategy and its movie strategy. If you are going to sell off-net in this marketplace, you have to think like a programmer. You have to create a good marketplace for every show.”
“Every cable network tries to distinguish itself with its own unique brand,” says Jed Cohen, executive VP and general sales manager, Disney-ABC Domestic Television. “Sometimes you can match a show with a network in an organic way. Other times, you can use research to discover to whom the show appeals and what its demographics are. That can help you find a match even if it doesn't initially feel like a show belongs on that network.”
That sort of thinking results in deals like CBS' simultaneous sale of Friday-night drama Ghost Whisperer to NBC Universal's Sci Fi, Rainbow's WE TV and up-and-coming broadcast network Ion Television, formerly Paxson Communications.
In fall 2009, Sci Fi and WE are expected to double-run Ghost Whisperer once a week in primetime while Ion will strip it. Each network agreed to the deal because research proved that Ion, Sci Fi and WE don't share a significant portion of their audience with each other. But the show—which stars Jennifer Love Hewitt as a newlywed who talks to spirits—fit perfectly into the branding strategy of all three.
Still, that multi-window deal begs the question: Whatever happened to exclusivity? It was once the bread and butter of syndication—one channel that was the only place to see an off-net program.
The answer is that cable networks still covet exclusive programs, but the networks prefer them to come in the form of brand-building originals. AMC decided that it made more sense to spend its programming dollars on its two attention-getting shows, Mad Men and Breaking Bad, around which the classic-movie network is rebuilding its identity and drawing new viewers.
Cable networks don't get as much bang for their buck from acquired programming, unless it's a huge and expensive hit like CSI or Without a Trace, both of which sold to cable networks for $1 million-plus an episode.
“Most networks see a balance between acquisitions and originals,” Cohen says. “Networks become more focused on what kind of acquisitions they want to do based on what kind of original strategy they are pursuing. As they start to really define their network brand, that can certainly impact the kinds of acquisitions in which they are interested.”
But before a cable network can create an identity for itself, it needs viewers, and that's where acquired programming comes into play. “Owning those off-net shows that give you habit-forming viewing provides you with a platform for originals,” Koondel says. “People wouldn't find The Closer without Law & Order and Without a Trace on TNT.”
Of all the cable networks, perhaps Time Warner-owned TNT and TBS have used that strategy most successfully, although USA Network, Lifetime, FX and others have done well with similar models.
First, both TNT and TBS developed clear brands: TNT informs its viewers that “We Know Drama” and then backs up that claim with quality off-net and original shows. TBS simply tagged itself as “Very Funny” and then went after brand-defining acquisitions such as Everybody Loves Raymond, Seinfeld and Friends.
Once TNT and TBS got their brands established, they began creating original programming that fit into those lineups. Soon, TNT had a big hit on its hands with The Closer, while TBS found success with Tyler Perry's House of Payne.
TBS also is breaking ground by being willing to pay a little more for short but exclusive windows for top comedies. It has been airing prior-season episodes of NBC's The Office twice a week since fall 2007, even though the show doesn't premiere in broadcast syndication until fall 2009. For the privilege, TBS paid an estimated $650,000 an episode, according to sources. TBS will pair Twentieth's My Name Is Earl with The Office come September 2009, when TBS will share both shows with broadcast stations.
PAYING TOP DOLLAR
There do remain shows—although these days they are rare—that are hot enough that buyers are willing to pay for exclusive rights to them. The last of these in broadcast syndication was Warner Bros.' Two and a Half Men, for which Tribune paid $1.5 million an episode plus barter to air exclusively for three years, according to reports. That window ends in fall 2010, when News Corp.'s FX will put the show on its schedule, too.
Hits like Two and a Half Men always will reap the highest prices—“license fees eventually follow ratings,” says Cohen—but the relative lack of scripted programming on network TV means two things: First, shows are more expensive because there are often more bidders in the market for less product; and second, cable networks sometimes have to face reality and buy non-scripted shows.
“There's one less network since The WB and UPN combined, and there's less scripted programming being produced versus reality programming,” says Ken Werner, president of Warner Bros. Domestic Television Distribution. “All that indicates there's not enough programming being produced to supply all of these cable networks.”
So buyers have to be willing to consider filling their lineups with unscripted programming, such as ABC's Wife Swap and Extreme Makeover: Home Edition or Fox's Nanny 911 and Trading Spouses. Five years ago, the conventional wisdom was that unscripted shows would never be able to garner back-end revenue. That thinking has changed. Some unscripted shows fit that bill, say syndication chiefs, because like procedural dramas, they offer well-told stories contained in closed-ended episodes.
“Cable networks are all over the place in terms of what they want,” says Bob Cook, president and chief operating officer of Twentieth Television. “Programmers are looking at strong procedural dramas and sitcoms, and now they are getting in more reality programming.” But Cook says every programmer has just one simple but hard-to-fulfill goal: “I think they are just looking for what resonates with the audience.”