Studios' once-booming business selling movies to TV stations has screeched to a near-halt in recent years, as station cash dried up and basic cable gobbled up pricey premiere windows. But some smaller syndicators who have stepped into the sector are finding ways to eke out incremental value for theatrical titles in the broadcast market.
Some major studios, such as 20th Century Fox, still offer all-barter movie packages to TV stations, but today the major basic cable networks such as FX, USA, TNT and TBS are movies' best clients. Warner Bros. tried to introduce a movie package two years back, but met with little interest from stations. Other studios farm out their offerings to independent syndicators. Trifecta, for example, sells packages from Paramount and DreamWorks.
“The movie business on TV stations is dead,” says one syndication executive. “The average movie in a barter syndication package makes $100,000 to $300,000. That doesn't go up and it doesn't go down. TV stations forsook the movie business a long time ago.”
Many larger syndicators consider selling movie packages to TV stations in 210-plus markets too much work for too little return. “If I can make $200,000 in barter or $200,000 in cable, but I can do the cable deal far more quickly and simply, don't you think that's what I'm going to do?” says the executive.
Still, some smaller syndicators consider the extra money they can earn selling movies to TV stations to be well worth it. “If you look at that landscape going forward, it's still a consistent business that the stations can control,” says John Bryan, MGM's executive VP of broadcast strategy. “Movies are very advertiser-friendly and tend to be well balanced between male and female.”
The movie syndication business also is good enough that Starz, best known for its slate of premium movie channels, is beefing up its movie sales business. The Englewood, Colo.-based company recently hired Alecia Dixon to head its domestic sales to cable networks and TV stations. Starz owns movie studio Overture Films, which recently released such theatricals as Law Abiding Citizen, The Men Who Stare at Goats and Capitalism: A Love Story. The company is shopping the package to cable networks, and possibly TV stations down the road.
Movies tend to be sold to TV stations in all-barter deals for several years. The distributor makes a movie available for the station to run for one month, for example, and sells national ads to run during the movie while the station sells local ads. During that month, a station has flexibility on when it can air the film, so the national ads run in different times in markets all over the country.
On cable, the distributors typically get cash for movie rights—on average, 11% of domestic box office—a payment method they much prefer. Most studios cut in a broadcast window for TV stations during these basic cable deals. “Our goal is to figure out how many ways we can slice and dice a movie to make it as profitable as we can without damaging any downstream revenue opportunities,” says another syndication executive.
MGM got a boost to its syndicated movie business when The CW last year decided to stop programming Sunday nights and returned 8 to 10 p.m. to affiliates. MGM immediately offered affiliates its MGM Showcase movie package, which included films such as Legally Blonde, Overboard and several James Bond features. That weekly movie package has improved Sunday nights for CW stations by 20% since last year, according to Bryan.
MGM also has launched This TV, a 24/7 movie network with Weigel Broadcasting, that stations can use to program one of their digital channels.
“For stations like Post-Newsweek's news-heavy WDIV Detroit, This TV puts them in the movie business and doesn't compete with them,” Bryan says. “And we allow our customers to repurpose movies from This TV back onto their main channels, which gives them a lot of flexibility.”
Trifecta has sold movie packages to Fox- and Tribune-owned stations, including WPIX New York. “A lot of it has to do with the quality of the movies and the overall strength of the package,” says Trifecta CEO Hank Cohen. “We offer really good movies that haven't been aired too often in syndication.”
While the movie syndication business isn't as profitable as it once was, “What is?” asks one executive.
“I think it's a business that will always be here,” Bryan says. “People always like to curl up in front of a good movie. They're like television's comfort food.”