Cable’s acquisitiion equation

Finding the right mix between pick-ups and original is vital

And yet, the money spent on developing, creating and promoting original exclusives such as these is only part of the business equation.

The upshot is that if you’re a pay cabler like HBO, Showtime or Starz, you may have a handful channels to program. If you’re FX, you’re slotting 19 hours a day. Acquired programming — be it theatrical movies or ad-supported syndies — remains essential.

“Nobody makes money off original programming on an ad-sales basis in basic cable,” says John Landgraf, president and general manager at FX. Next year FX could have as much as 105 hours of original programming — reflecting an exponential increase in spending on originals since “The Shield” launched in 2002 — but with nearly 7,000 hours in the schedule, says Landgraf, “That’s far more acquired programming than original.”

At premium player HBO, the balance between originals and acquired remains acutely recognized. Originals spark buzz, engender loyalty and burnish the brand, while movies appeal to customers’ desire for familiarity and variety of content. But originals also, if they hit big, give HBO a chance to feed the revenue pipeline.

“From an investment perspective, we go to great lengths to own our original programming,” says senior VP Jeff Cusson. “(It allows us) to exploit the content in the back-end opportunities such as international sales, syndication, DVD.”

For a relative newcomer at originals such as AMC, which has seen its visibility as a hub of original programming grow in only four short years with the series “Mad Men” and “Breaking Bad” and the mini “Broken Trail,” the amount of money spent on originals has escalated fast, but it’s also boosted the investment in movies.

“The trick is to look at the entire model,” says Charlie Collier, AMC’s president-g.m. “When you have success with a ‘Breaking Bad,’ it allows us to go and buy films that weren’t in the library before because we’ve had ad support for that.”

And in AMC’s case, those acquisitions can tie in thematically: programming antihero pics to bolster its similarly designed “Breaking Bad,” great western movies around “Broken Trail,” and in the case of the upcoming series “The Walking Dead,” premiering a show about zombies during its two-week marathon of horror films called Fearfest.

“The goal is to live up to the quality of the movies we’re showcasing,” says Collier. “If you look at the genesis of premium television, it really was an intelligent mix of great movies, and originals that could stand seamlessly side by side with those movies.”

At FX, meanwhile, a push to get more original comedies off the ground (“Archer,” “The League,” this summer’s “Louie”) coincides with its purchase of basic cable rights to broadcast television’s most popular laffer, “Two and a Half Men.”

“We haven’t had the sustained success with acquired programming that, say, USA, TBS and TNT have had with procedurals and off-net sitcoms,” Landgraf says. “Our intent is to improve our business in every area.”

Ultimately, the equation of originals vs. acquired can change every year, depending on whether a network is maintaining a level of established success (FX, HBO) or still in a building phase (AMC, Starz). Starz exec VP of programming Stephan Shelanski says the net got into originals at the right time, considering the changing landscape of TV viewing. High-profile movie acquisitions may come with a built-in aud, but for a cabler, having an original such as “Spartacus” is invaluable.

“Movie usage has been spread through so many different platforms that the TV numbers behind movie viewing is continually declining,” says Shelanski. “That’s why originals became so much more prominent.”

A cabler once may have been an upstart, stealing from the ratings juggernauts that the broadcast nets once were, but expectations change with success, and spending can get trickier.

“You’re not only worried about growing,” says Landgraf, “but now you’re in the same situation the broadcast networks are: How do you not go backwards?”

An HBO without ratings smash “True Blood,” AMC without its zeitgeisty award-winner “Mad Men,” or FX without broadcast-competitive hit “Sons of Anarchy” would, for these networks, be unthinkable.

Related: Upcoming original TV programming

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