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Peak TV Brings New Models, Windows, Problems and Opportunities for TV’s Busiest Producers

MIAMI — In this Peak TV moment, the dearth of new first-run product for sale at NATPE speaks volumes about the fragmented state of the content marketplace.

Yes, it’s the best of times for producers who have no shortage of outlets hunting for distinctive original content. But it’s not the best of times for finding a way to make real money from new shows at a time when the cost of every aspect of production is soaring simply because there are so many players chasing talent and deals.

The first-run syndication business that was the traditional underpinning of the annual National Association of Television Program Executives conference has been in a long slump, beset by declining ratings and softness in local advertising. The two new strips that did hit the market reflected the needs of stations for plug-and-play shows that are highly cost efficient (read: no big license fees) and don’t need a lot of marketing to introduce to the audience.

Lionsgate’s Debmar-Mercury is launching court show “Caught in Providence,” a court show building on the social media prominence of colorful Rhode Island jurist Frank Caprio, and Discovery’s “True Crime Files,” a collection of episodes of docu-series that have previously aired on the Investigation Discovery channel.

“True Crime Files” was welcomed by two of the largest TV station groups, Sinclair Broadcast Group and Tribune Media, who are in the process of merging, as an inexpensive option in a big year of transition. But the show was also seen by some industry veterans as a sign of surrender on the part of station groups who have so little faith in the possibility of a new show breaking out that old cable programming in a new package is viable.

NBC this fall launched a similar repackaging effort with older “Dateline” episodes (dressed up with new wrap-arounds and news updates when warranted) that have performed well enough to likely continue for another year.

“If that’s what this business becomes, then first-run syndication is over,” said one industry veteran.

The overriding theme of the three-day NATPE gathering that wrapped Thursday was managing through change and the explosion of content options beyond traditional TV. While the industry is agog at the free spending ways of Netflix, Amazon and now Apple, the rest of the TV universe is feeling the pinch.

“We’re always having the debates these days of where does a show belong,” said Kevin Beggs, chairman of Lionsgate TV Group. “We generally have a minimum of three to four bidders on (a project) that we think is really hot.”

The most important decision is where to plant a show where it will flourish creatively enough to last for multiple seasons. That requires more calculations these days as streaming outlets offer producers a different path to profitability than cable or broadcast. But the play’s the thing, first and foremost or there will be no profits.

“Without multiple seasons, the model’s irrelevant,” Beggs said. “The worst thing is one-and-out. On any model, that’s bad for us.”

Brent Montgomery, CEO of ITV America, said the supply and demand equation is still out of whack for independent unscripted producers. Everybody wants new shows but basic cable networks in particular have pulled back on what they will pay for content to the point that producers are struggling to maintain what are already razor-thin profit margins. Over time, that will sap the vibrancy of the supply chain.

“The margins aren’t there right now for people to keep running these production companies,” Montgomery said. “The independent production community needs to have the opportunity to launch new business and find new revenue streams. If they can’t share in the success (of a series), they’ll be out of business.”

Awesomeness TV CEO Jordan Levin traveled to the NATPE confab this year in an effort to take the pulse of the opportunities for more traditional TV series as part of the effort to build out the studio side of the digital content brand known for its pull with teens and young adults. Awesomeness has more than a dozen shows in production at present, most of them lower-budget offerings for streaming platforms such as YouTube and Verizon’s Go90.

“The big question for us is do we want to be in the bigger-budget series business,” Levin said. “If so, we are going to find ourselves in more traditional producer-network relationships and we’re going to be giving up more rights.”

Mark Greenberg, former president of Epix, sees the tightening of spending on programming as a trickle-down aspect of the bigger-picture problem in the pay TV eco-system. Consumers are embracing streaming services and moving away from the MVPDs that deliver so much of Hollywood’s traditional earnings. The old-guard has been too slow to respond to monumental shifts in consumer behavior. Viewers are voting with their feet.

“The relationships between cable programmers and the operators has become so contentious over the past 10 years,” Greenberg said. “We really have to find a better way to collaborate and improve the (viewing) experience. Negotiations can’t just be about cost management, because if it’s just about cost management, it’s the death knell for the growth of the business.”

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