The networks grab all of the attention, but the big money in primetime TV stems from content licensing. And that makes Wall Street attuned to how the major TV studios perform during pilot season.

On the heels of the May 13-16 upfront derby, Morgan Stanley and Nomura Equity Research were quick to issue deep-dive reports that examined the pilot-to-pickup ratio of the five largest studios: Warner Bros, 20th Century Fox TV, CBS TV Studios, ABC Studios and Universal TV.

As studio execs always say, the big win is not so much in selling shows as it is keeping them on the air long enough to generate meaningful profits in syndication. Both reports crunch the numbers on recent renewal rates of shows, by studio and by network.

Of the 31 new scripted series that were slated to premiere this past season on the Big 4 nets, seven were renewed. That’s a return rate of about 23%, according to Nomura. (One caveat: the tally includes shows that never made it to air, like CBS’ “Partners” and NBC’s “Next Caller.”)

By Morgan Stanley’s count, Warner Bros. has the most impressive track record of converting pilots into series orders (a 60% conversion rate, with 12 of its 18 scripted pilots landing pickups this year) and a 70% renewal rate among the 23 series it produced for ABC, CBS, Fox, NBC and CW this past season.

Overall, Morgan Stanley’s Benjamin Swinburne is bullish on the expansion of the traditional syndication marketplace, driven by vigorous competition among digital players like Netflix, Amazon and Hulu, and others on the international front. Morgan Stanley pegs the value of online video distribution at about $1.5 billion-$2 billion a year.

The growing demand at home and abroad has the networks taking more “at bats” with scripted programming, according to Swinburne, as evidenced by the rise in the number of new series orders for the 2013-14 season compared with the most recent campaign. Last year the nets came out of upfront week with orders for 39 new comedy and drama series; this year the tally was 50, and CBS made it 51 last week with its pickup of Sony Pictures TV comedy “Bad Teacher.”

Nomura’s Michael Nathanson also notes the healthy demand for successful shows, but raises the question of whether there are enough hot prospects moving through the pipeline in the next few years to sustain the robust earnings from syndie profits that the majors have realized in recent quarters, particularly Time Warner, News Corp. and CBS.

Morgan Stanley’s research shows that coin from production and syndication worldwide accounts for 25% of EBITDA in the CBS business unit that houses its TV production-distribution operations, or around $1 billion this year.

For News Corp., it’s about 10%-15% of relevant segment EBITDA, or $750 million-$800 million for 2013. At ABC Studios, such coin accounts for approximately $500 million-$600 million, or about 5%. For Time Warner, it’s a little more than 10% of Warner Bros.’ EBITDA, about $900 million.

The newfound riches of digital licensing are laid out in Morgan Stanley’s estimates of what the studios will take in from recent pacts, primarily with Netflix and Amazon. Digital licensing also accelerates the timetable for studios to realize some profits on a show, rather than waiting until at least three or four season’s worth of episodes have been produced to trigger traditional syndication via cable and local TV stations.

ABC Studios’ sudsers “Revenge” and “Scandal” are poised to generate about $35 million apiece in revenue from digital syndication, based on the number of episodes that are now available (both shows are heading into their third seasons), meaning revenue will grow as more episodes are produced. That’s a big financial turnaround for the kind of heavily serialized shows that typically draw low dollars in traditional off-network deals. Warner Bros. TV is poised to generate $5 million from the first season of its Fox drama “The Following,” and $8 million from frosh NBC drama “Revolution,” according to Morgan Stanley.

Hollywood can only hope that binge viewing remains a draw for subscribers of SVOD services so that serialized shows will continue to be must-haves for those platforms.

The growth of Web streaming and the cable VOD biz have helped the networks offset the inevitable decline in ratings as viewing becomes ever-more fragmented. For years, cable was the culprit, but now the networks are often competing against their own programming, served up on different platforms.

Nomura’s Nathanson is concerned that platform fragmentation is taking a toll on the perceived hit status of new shows. For all the changes in the TV marketplace, a show’s earning power in syndication is still largely, though not exclusively, determined by how it fares in its initial broadcast window.

Warner Bros. and 20th TV are the best positioned to restock their pipelines: Those studios are fi elding the highest number of new shows next season (12 for WB; 11 for 20th TV, including the 24 revival). Universal TV has the smallest slate, with six series orders, including Fox comedy “Brooklyn Nine-Nine.”

Nathanson uses a bit of baseball jargon to illustrate the concern over the erosion of broadcast viewing by citing the “Mendoza line” — a measure used to track the minimally accepted batting average for players — for low-rated shows. This past season, there were 20 primetime broadcast series with adults 18-49 ratings of 1.5 or less, compared with 12 shows below that threshold during the 2011-12 season.

According to Nomura, ABC had lowest Mendoza line for second-season renewals, giving pickups to two shows that averaged 2.1 million 18-49 viewers (“Nashville,” “The Neighbors”).

Closing prices on day of upfront for Big 4 congloms:

Comcast: (May 13): $43.19 (+.26%)
News Corp.: (May 13): $33.40 (+.12%)
Disney: (May 14): $67.47 (+.22%)
CBS Corp.: (May 15): $50.40 (+.74%)