First-Run to VOD: Wait and See - Broadcasting & Cable

First-Run to VOD: Wait and See

Repurposing syndicated shows could irk stations
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Now that CBS and NBC have joined ABC in taking the first steps toward a possible sprint into new digital-distribution territory—foreshadowing a world where everything will be available on-demand for a price—can syndication be far behind?

With staples such as The Oprah Winfrey Show, Entertainment Tonight and Access Hollywood on their rosters, the temptation would seem great for first-run programmers to enter into similar deals. But syndicators lack the clout that broadcast networks have with affiliates, and they have delicate relationships with stations. Industry executives acknowledge it will be much tougher for them to replicate the CBS-Comcast, NBC-Direct TV and ABC-Apple iTunes deals.

Syndicators must go back to the same stations year after year to peddle new shows and renew existing ones. They cannot afford to alienate potential customers that could retaliate by lowering the programming license fees they are willing to pay. Plus, many syndicated shows draw marginal ratings as it is; any more viewer erosion would be a tough pill for stations to swallow.

So, few—if any—syndicators appear anxious to move quickly into an unproven business. “This reminds me of the bulls--t Internet things of years past,” says a senior studio executive who asked to remain anonymous and whose company has extensively researched new business models. “At what point does this consumer say [enough] to paying for every little thing involving TV?” Like others in the TV distribution business, the executive questions whether consumers would spend 99¢ to watch shows on video-on-demand (VOD) that they can just as easily record for free.

Some first-run programmers can still imagine a future of additional revenue streams. They see subway riders with handhelds downloading the latest Springer brawl between transvestites in panties, or watching Jennifer Aniston on their cellphones as she chats with Oprah, or wiring into the latest showbiz buzz from one of the magazine shows on a Blackberry.

But it’s uncertain just how many will watch—or pay—over the long run. CBS, which has been offering video downloads of programs on CBS.com and Google for some time, closely guards the specific number of people who have downloaded them. A network spokesman says only that the network is “pleased with what we’ve seen.”

ABC and Apple are also treating the iTunes numbers as proprietary information, refusing to reveal how many have so far seen episodes of Desperate Housewives, Lost, Invasion and its other series on the programming menu.

First-run syndicators could find sponsors for brief versions of shows or offer programming as a free promotional tool—Mary Hart gives viewers the ET Hollywood headlines.

If they sold shows, studios would probably keep the price low to appeal to consumers, like the 99¢ that CBS and NBC will charge Comcast and Direct TV subscribers. But 99¢ can go much further when only the network, distribution provider and a few profit participants are splitting the fee. A syndication company with a popular first-run show ripe for downloading would have to revise its exclusivity templates or be forced to share any fee-based revenue with scores of stations.

If there’s a will, there no doubt will be a way. A decade ago, programmers got pushback when they repurposed broadcast network and first-run series to cable. But today, it’s a common industry practice.

Repurposing syndicated shows could irk stations

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