As the networks aim to slice license fees and cut costs, studio chiefs are bracing for an economic squeeze this pilot season.
The TV studios continue to respond to the industrywide assumption that this may be the year the nets — still smarting from a weak ad market and lousy economy — hold the line on what they’re willing to pay for pilots.
“Our expectation is there will be less pilots made this year, there may be some more presentations, and like the networks, we’re all going to have to be pretty careful in terms of what we make and make sure we’re making shows that we can afford based on license fees and international revenue,” said 20th Century Fox TV co-prexy Gary Newman.
Studio toppers talked about the economic state of the business during a panel discussion sponsored by the Television Publicity Executives Committee at the Television Critics Assn. Press tour in Pasadena.
“I don’t think there is anyone on this panel that hasn’t been affected by the economic downturn,” Warner Bros. Television president Peter Roth said. “Each of us, in our own way, are looking more rigorously and vigorously toward controlling the costs.”
But the group of eight studio execs said they weren’t so sure they could produce an hourlong drama for a license fee as little as $500,000, despite recent rumblings by NBC Entertainment prexy Jeff Zucker that he would like to start paying that amount. (License fees for new dramas can cost upwards of $1.4 million.)
“I don’t think we could accomplish that at Paramount,” said Par Network TV prexy Garry Hart. “Particularly with foreign revenues starting to come down. There is only so much you would be willing to deficit.”
But Alliance Atlantis Entertainment president Peter Sussman said he believes someone will figure out how to produce a network series at bargain prices.
“We actually still make shows on those kind of economics,” he said. “Granted they’re not for networks, they’re usually for cable or targeted for broadcasters in other parts of the world. And some of them are actually quite good. They’re in focus, there’s dramatic tension, and the actors are good.”
But as the networks start demanding a new license structure, those kinds of cuts are complicated by vertical integration. After all, in many cases networks will be looking to slice fees from their own sister production companies.
“The challenge is really going to be how they make their budgets and we make our budgets,” Hart said. “I personally think it will be just as bloody as it is every year, and the shows that are destined to get made will get made, and we’ll figure it out.”
Touchstone Television prexy Stephen McPherson, Columbia TriStar TV Distribution prexy Steve Mosko, Studios USA programming prexy Sarah Timberman and Carsey-Werner-Mandabach partner Tom Werner also participated on the panel.