PRODUCER DEALS REVEAL NEW TV DEVELOPMENT TREND
LOS ANGELES -- As production costs continue to bleed red and advertisers maintain a careful handle on spending, the TV community is adopting new business models, particularly in how new series are developed. For example, rather than investing millions of dollars for exclusive rights to a particular writer, the latest trend is to enter into an overall deal for a producer, called pod deals.
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The idea is to get more bang for the studio and network buck. While a writer generally can concentrate successfully on only one series at a time -- David Kelley being the notable exception -- producers develop multiple projects simultaneously. But perhaps most importantly, producers earn the bulk of their money on the back end. As a result of that shift, networks save money and it allows more cost efficiency by facilitating vertical integration because the network has a piece of the show from the beginning as a co-producer.
Among the most notable pod deals signed recently are Gavin Polone at NBC, the Firm and Imagine at Twentieth Century Fox and Touchstone’s deal with the prolific Tollin- Robbins. Rather than a writer’s being the point person, now a network will team a new writer with an experienced producer who is well-versed in network deadlines and who acts as the liaison with the network and studio. Probably the best example was CBS’s teaming Anthony Zuiker, who had no prior writing experience in television before creating CSI: Crime Scene Investigation, with producer Jerry Bruckheimer.
All of this has evolved because of the networks’ need to cut costs and need of producers, particularly independent producers, to find financing. Managing Dir. Stuart Carter of Pioneer Productions recently said: “The old days of full funding are gone forever. The new order is deficit finance, presale and co-production. It all means raising a percentage of the budget any way you can -- a challenge that is nearly always at odds with the editorial brief. The producer is being stretched to the limits to come up with ideas that will attract deficit finance and at the same time stick in local presenters and contestants. Major factual distributors who are not part of a broadcast group may find the future very difficult indeed.”
Other attempts to curb costs include reducing the number of full pilots and increasing the number of lower cost presentations, which usually are half the cost of a pilot. But it’s still a expensive crap shoot, especially for the studios. Agent Neil Meyer, who represents many producers, said: “In the scripted world, production costs have increased out of step with license fees. Studios are into it for the back end revenue. So the worst thing that can happen to a studio is to have a series on for 2 or 3 years and then have it cancelled. Because you've invested a huge amount of money but you lose out on the back end money.”
Although there’s been a lot of talk about boosting the bottom line through product placement, few really believe it is a long-term answer. MediaCom CNO Jon Mandel flat-out dismisses the practice as futile. “I don’t see where the sell aspect is from product placement.” Bruce Rosenblum, exec. vp-Warner Bros. TV Group, agrees, but says every little bit helps. “We don’t think of product placement but product alignment. These deals help us brings costs down. License fees are not keeping pace with production costs. Network license fees have grown 4% but production costs have grown at a much greater clip. And all these costs are driven by the pilot process.” The most sobering reality is that advertising is not a limitless pool. Rosenblum said: “There is only a finite amount of revenue we can get from advertising so, as productions costs go up, we need to find ancillary revenue streams to keep up.” However, in a Catch- 22, advertising experts say multiplexing potentially diminishes the value of a project, resulting in lower costs per thousand down the road.
Universal TV Group Chmn. Michael Jackson believes novel approaches must be developed. “The real solution to cost control is experimentation. For example, I think we will see very shortly prime time repurposing.” However, what is good for the broadcasting goose isn’t necessarily good for the syndication gander. Tribune CEO Dennis FitzSimons said: “We try to negotiate as much exclusivity as we can, but we have to go with what the market bears. However, I think we are in danger of helping the bottom line now at the cost of future shows.”