It's Production On the Cheap

A cadre of independent producers crank out programming for basic-cable nets

Some cable networks boast about their original programming as if it's a rarity. USA Network calls itself "cable television's leading provider of original series and feature movies." TNT even likes to spell "originals" with a capital "O," as in its "line-up of dramatic Original films."

Of course, while TNT may be producing only eight movies a year, some successful channels are loaded with original product, hours and hours of shows on home decorating, adventure travel, animal psychologists. And basic networks like Discovery Channel and A&E rely on squads of small production houses, virtually unknown, churning out hundreds of episodes of dozens of series each year.

The major difference is that networks that load up on what are very loosely referred to as "reality" shows aren't paying the kind of money the broadcast and cable entertainment nets do. Cable producers are commonly tasked with producing an hour of television for $100,000 to $200,000, an hour that will be aired over and over and over with no additional payments to the producer. Often, those deals come with no backend: no international sales, no DVD splits.

Small producers

Viewers envision networks with vast squads of staffers actually shooting all their programs, said Vinnie Kralyevich, whose New York-based Kralyevich Productions Inc. shoots such programs as Bravo's Page to Screen
and Court TV's Dominick Dunne's Power, Privilege and Justice. That's true at only some networks, such as E!, the cable sports and news channels, and, to some degree, Court TV.

"There's this perception that the Discoveries and the A&Es and the Court TVs are making all these shows themselves," said Kralyevich. "But they have practically nobody in-house actually making them. We're doing it. That's how they can do it so cheap."

At the same time, the cable networks depend on a strong community of independent producers to crank out programming smoothly and much more cheaply than they could do if forced to staff up in-house.

"This is going to be our salvation," said Jonathan Rodgers, former president of Discovery Networks who is starting a black- oriented channel for Comcast and Radio One. "Not only will this give us about 25% of our programming, we're hoping our demand will create production companies, which, by and large, are not now owned by African-Americans."

Even the network executives who hire the producers are a bit puzzled by the business.

"How do they make any money?" said Eileen Opatut, Food Network senior vice president of programming and production. "I know what we do and the paces we put them through. They can't be skimming money off the top. There isn't anything to skim from."

Indeed, it can be a tough road for a company getting, say, a $1 million assignment to do a medical talk show for Discovery Health. "What is it they say, supermarkets are about a 5% [profit] margin?" asked Gary Grossman, a veteran cable producer partnered in Weller/Grossman Productions with ex-Entertainment Tonight
anchor Robb Weller. "Sometimes we're in the supermarket level. It's very low."

Even though a small "reality row" of small cable producers has sprung up around Los Angeles, their world is far from the Hollywood community producing shows for broadcast nets.

The likes of CBS are willing to throw $1.5 million per episode at producers of even a moderately priced drama like Hack. The sixth year of a hit like NBC's The West Wing
can push the studio's take to $7 million an episode. That's why a reality show like ABC's Are You Hot?
seems a bargain at $700,000 per episode.

But cable networks give small producers a fraction of those budgets. An hour-long light documentary on The History Channel might fetch $150,000. Food Network pays just $40,000 to $60,000 for a cooking show that travels out into the field. HGTV might pay as little $20,000 for a half-hour home-improvement show shot in a studio.


Sometimes, the production company comes up with an idea it pitches to the networks and can keep some sort of backend. More often, the network develops or licenses an idea and hires a production shop to manufacture it.

The Holy Grail in this world is Trading Spaces, which, at less than $100,000 per episode, regularly delivers a prime time Nielsen household rating of 3.0-4.0. That's huge for a network that had averaged a 0.8 in prime.

Looking for a bridge from its woman-oriented afternoon block of A Wedding Story, A Baby Story
and A Dating Story
to the early-fringe home-improvement shows, TLC licensed the idea for Trading Spaces
from Dutch producer Endemol, which developed British success Changing Rooms
for BBC.

No backend

The current Trading Spaces
producer, Banyan Productions, is not the first one. Initially, TLC tapped Ross Productions but became unhappy with the costs. TLC bid the job out after the first season and hired Banyan. After a change of hosts and a polish of on-air graphics for the second season, Trading Spaces
really started breaking out.

"It's a great format," said Banyan CEO Jan Dickler, who started the company with other refugees (including wife Susan Cohen-Dickler) from KYW-TV Philadelphia, whose Evening Magazine
was shut down in 1991. "We were showing a lot of success with the TLC daytime bloc. We were able to deliver that every day."

Banyan expects to produce 700 episodes of different cable shows this year. But, for all TLC's financial success (three 30-second spots on a single episode can sell for more than the episode cost to produce), Banyan hasn't seen a great bonus. TLC General Manager Roger Marmet wouldn't get into details but said the cost of Trading Spaces
is only slightly higher than it was a year ago.

When the network generates the idea, the producers get only the original fee. Steve Rosenbaum, CEO of New York-based Camera Planet, was surprised recently to see one of 13 hours of a health show he produced seven years ago for a predecessor of ailing Health Network. "I think they've run [the series] 900 times."

Even if the producer comes up with the idea, networks like HGTV, A&E and sister channel History often still demand all rights: domestic, international, home video.

KPI's Kralyevich tries to mix commissioned product like History Channel programs about biblical figures with his own aimed more internationally that he can sell direct-to-video in the U.S. One such project is Luche Libre, a program about a day in the life of Mexican wrestlers. "It's the kind of thing I could never pitch to a network."

Camera Planet now tries to develop all its own ideas and secure some other backing before approaching a U.S. cable network, Rosenbaum said. "We walk into a network with foreign presale, a DVD deal, then say, 'We'd love for you to be our U.S. partner.' That way we're coming to [the cable network] with more than a good idea and a bunch of cameras. The truth is that making television has become a commodity business."


Strategy Sampler

Most cable networks are flexing their muscles on original programs. Here are several networks' strategies and plans for the months ahead. Compiled by John M. Higgins and Allison Romano