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Cable, Digital Execs Talk Rising Costs of Television Production, Marketing

Netflix has shifted the balance of power in the television universe, pouring money into original programming and handing out generous straight-to-series orders. But Kevin Reilly, president of TNT and TBS, believes that there is an upside to Netflix’s tactics for linear and digital competitors.

“I’m finding for the first time in a while, people are kind of going, wait a minute — it’s great if you’re ‘Orange Is the New Black’ and you won the trophy, but [not] when you’re one of the many, many other pieces of content where it dropped one day and you called and said, ‘How are we doing?’ and they, say, ‘You’re doing well,'” Reilly said Thursday. “But nobody was talking about it. There was no premiere party. There was no marketing around it. People say, ‘My mother didn’t even know it was on.’ There’s a variety of things that come into play [when competing for talent], including what talent and artists want their experiences to be.”

Reilly was speaking Thursday at Variety’s Entertainment and Technology Summit in Beverly Hills, Calif., where he was joined onstage by several top cable and digital television executive as well as moderators Debra Birnbaum, executive editor of Variety, and Courtney Williams, regional director for Parrot Analytics.

Susanne Daniels, global head of content for YouTube, charged her streaming competitors with driving up the cost of programming.

“The deal-making side is frustrating because Netflix and Amazon are spending gobs of money,” she said. “I look at a show like ’13 Reasons Why.’ On Netflix it’s $5 million an episode. I made shows like that for years at the WB for $2 million an episode. It’s ‘interior high school,’ it’s ‘interior home.'” She added, “There’s no rhyme or reason to what they’re paying.”

Daniels also said that marketing costs have skyrocketed in recent years, noting that when she was at Lifetime, she spent $10 million on marketing ahead of the launch of “Army Wives,” and spent the same amount to launch “Pretty Little Liars.”

“Now if you want to make a dent like that, if you want to feel it, you have to spend $25 million, minimum,” she said.

Craig Erwich, SVP of content for Hulu, said that his company’s marketing around original series differs from the way that a linear network traditionally launches a show.

“We try not to have an opening-weekend mentality,” Erwich said. “We’re an on-demand platform.” As such, “It’s a long, long run, and quite frankly sometimes you really want to put your foot on the gas in Season 2.”

Jeff Wachtel, chief content officer for NBCUniversal Cable Entertainment, spoke to the difficulty of gaining traction for new series in the Peak TV era.

“When we look at our research now, the top boxes used to be ‘excellent’ and ‘very good,'” Wachtel said. “‘Very good’ is not top box anymore. The only thing that matters is ‘Excellent.'”

The executives also spoke to the importance, or lack thereof, of winning Emmys. “We love them,” Reilly said. “They’re great. And it’s been long held that really in terms of perception,” they are a positive, “but from a bottom-line business point of view, no.”

Wachtel argued that the awards do have more substantial value.

“People who might not have looked at the show will” if it is up for Emmy consideration, Wachtel said. “These days, any advantage you can get is great.”

Jason Kassin, co-founder and CEO of FilmTrack discussed how hits are measured in the current climate. “I think that’s how you measure a hit sometimes, engagement.”

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