Production Units a Bright Spot in Broadcast News

Reality, ‘insta-mentary’ series help fuel bottom line

At a time when news divisions are struggling with contracting margins, production units at the broadcast news organizations that long existed to repurpose newsmagazine content for cable are increasingly branching out with programming that breaks the news mold—and brings in crucial revenue.

These units now produce hundreds of original non-fiction hours. They’re also playing in the competitive reality milieu. And they’ve essentially cornered the market on quick turnaround documentaries, for which they can instantly tap their news infrastructure and video archives.

“We are a profit center, which is what everyone is looking for,” says Sharon Scott, executive VP of Peacock Productions, the independent production unit at NBC News. “And I would say we have unlimited growth potential, which is rare at a news division.”

Among the reality shows that news units produce, CBS News Eye Too Productions does The Next Food Network Star, Food’s highest-rated series, which heads into its sixth season this summer. And Peacock is producing a docu-soap about celebrity hair stylist Nick Arrojo, who was featured on TLC’s What Not to Wear.

ABC News’s Lincoln Square Productions creates original content for cable including TLC’s Table for 12, but has also proved extremely valuable to its own network’s entertainment division. Lincoln Square produces ABC primetime specials such as music-themed hours with Beyoncé and Paul McCartney that bring in millions in ad revenue for the news division.

This is all in addition to the networks’ own news hours, which are repackaged for cable. WE runs repurposed hours of ABC News’ 20/20 and limited longform series. CBS News repackages 48 Hours Mystery to Investigation Discovery, TLC and WE. And NBC News repurposes Dateline to Investigation Discovery and TLC.

“The first thing I try to do is create and develop programming for the network because one, we work for the network, and two, it is obviously a bigger platform,” says Phyllis McGrady, senior VP of creative development at ABC News. “But we’re trying to be many things, and I think that’s what has made the unit thrive. Our group has become very profitable.”

The standard fee structure for a basic cable hour is 10%- 15% of the hourly budget. And while cost-per-hour figures vary widely, $200,000 is the average, say executives. The key to making money on those margins is volume. “If you have enough volume and you are productive and you expand, you amortize your costs,” says Margery Baker, CBS News VP and the executive in charge of Eye Too Productions. “And we operate with that in mind all the time.”

These news units dominate ripped-from-the-headlines documentary specials, the so called “insta-mentaries” that are a staple of ad-supported cable because the news units have the access, the resources and the relationships with the cable networks that depend on them.

“They have the ability to tap into the tremendous resources that a large news division has,” says Nancy Daniels, senior VP of development and production at TLC. “You don’t get that from a small production company.” And their experience with hard-news crashes means they can turn product around quickly.

On-air talent also presents a selling point, whether it’s NBC’s Lester Holt fronting hours for Investigation Discovery or ABC’s Bob Woodruff hosting an eco-cast for Planet Green. “Those folks bring a patina and a credibility from their news organizations, particularly for the newer networks,” says Clark Bunting, president and general manager of Discovery Channel.

In a post-White House partycrasher world, news organizations’ strict standards and practices also offer cable networks a high degree of protection. “These are companies that really know the ins and outs of how to shoot, so there’s a certain amount of security in dealing with them,” says one cable executive. “You know they’re not going to make any stupid mistakes.”

Still, as the proliferation of cable has given rise to a flurry of production companies, the reality and non-fiction production terrain has become ever more competitive. "Developing and working in reality, you have to come up with a really original idea," McGrady says. "We also have to be incredibly versatile as the needs of cable change."

The setup of the network news production units allows them to expand and contract their ranks on a moment's notice, so they can adapt to most any opportunity. The ABC News longform units-Lincoln Square and All Media-operate with a handful of in-house staffers and bulk up as projects arise. Eye Too has a full-time staff of 10 people that will swell to as many as 90 with freelance help. Peacock has 30 people on staff and will use at least as many freelancers at any one time.

"We have to compete with every other production company out there," says Peacock's Scott, "many of which are the polar opposite of NBC: two guys in a garage with a really good idea and an overhead of about 10 cents."