FX Networks CEO John Landgraf predicted a “bumpy half-decade to decade” for the TV industry, as it seeks to adjust to new means of delivery and metrics, during the Hollywood Radio and Television Society’s State of the Industry annual luncheon Wednesday.
“I’m struggling … to figure out how to reinvent what we do,” Landgraf said, noting that while linear channels remain “the dominant force in television today,” there’s an inevitability to the existing framework eventually being overtaken by the greater efficiency of the Internet as a delivery system.
The challenge, which has dogged this discussion for years, is how programs will be financed as audiences continue to splinter, and new players – such as Netflix, Hulu, Amazon and Yahoo – add their original series to an already crowded marketplace.
“I don’t know if there’s enough talent around to do great stuff for everybody,” said Chris Silbermann, founding partner of ICM Partners.
Fragmentation “makes it very difficult” to pay for original content, added Gail Berman, former head of the Fox network and CEO of the Jackal Group, who noted that Yahoo has piggybacked on NBC’s investment by picking up the niche comedy “Community,” just as Netflix did by bringing new life to Fox’s “Arrested Development.”
The question, Berman said, is “What kind of content will Yahoo be able to afford in its business model?”
For her part, Yahoo head of media Kathy Savitt said she sees the company’s role as being “that connective tissue between creative and audience,” adding that she saw Yahoo’s marketing ability, vis-à-vis established networks, making it an enabler of content, as opposed to a disruptive force.
Much of the discussion focused on the inability at this point to garner an accurate read on some of the new players, particularly Netflix, which has declined to release viewership data for its programming. Berman put part of the blame on the media, saying, “The press has somehow allowed that to go on,” while Lionsgate TV Group chairman Kevin Beggs – who stated he doesn’t know usage figures on his company’s Netflix series “Orange Is the New Black” – maintained as long as the distributor is happy with the performance, then so is he.
“We do have a measurement problem,” Landgraf said, while suggesting there will come a point where the industry faces some kind of shakeout should the proliferation of channels continue: “There’s probably some optimal range where three channels is too few, but a thousand channels is too many.”
Beggs also noted that new players have resulted in more complicated deal-making, alluding to a nine-month negotiation over “Orange” – and a template that is probably already obsolete, he suggested, compared to current agreements Netflix is striking.
Asked by moderator Ben Grossman about the younger audience’s viewing habits and what that might augur, Yahoo’s Savitt pointed to company research that found less than 20% of 18- to 34-year-olds could identify where they watched their favorite shows in an unaided awareness survey.
With the power of linear networks destined to recede, Berman also cited greater opportunities to brand content around particular artists, including those who have traditionally remained behind the scenes, such as “Scandal” producer Shonda Rhimes.