Two years ago, TBS outbid FX and USA Network for CBS hit The Big Bang Theory to the tune of $1.5 million per episode, shattering Seinfeld’s cable-syndication record for a sitcom series — and few were surprised.
After all, the show — a traditional multi-camera sitcom with a laugh track — was in its third season, with an established track record of superb ratings across key male and female demographics.
A month later, USA spent nearly as much on Modern Family, even though it was a single-camera, no-laugh-track rookie — with soft repeat ratings at that. But the off -ABC series was a hit, and cable networks were starting to realize that breakout hits were getting fewer and further between.
Last year, TBS broke its own record, reportedly spending more than $1.7 million per episode for 2 Broke Girls. Like Modern Family, 2 Broke Girls was in its freshman season (on CBS). While more traditional in style than Modern Family, it lacks the male leads that have populated the vast majority of off -net successes — but there is no time anymore to wait around for a show to prove itself.
With fewer clear-cut hits, earlier sale dates, soaring price tags and multiple ways to view these shows, the pressure is on cable networks’ every decision.
‘FEWER BREAKOUT SHOWS’
“There is not a plethora of riches,” USA executive vice president, programming, acquisitions and scheduling Jane Blaney said.
But Big Bang Theory has demonstrated what awaits a network that does reap what it paid for: The show has been a smash year in and year out, catapulting TBS near the top of the pack. You could practically change the network’s name to BBTS: For the week ending Jan. 20, for example, a BigBang Theory episode was ranked seventh in basic cable for adults 18 to 49, just behind the Miami Heat-Los Angeles Lakers National Basketball Association contest. Overall, Big Bang had five episodes in the top 20 and eight in the top 30.
Despite that resounding success, the ground is continually shifting beneath everyone’s feet in the syndication marketplace, something on the minds of many TV executives as they make their annual pilgrimage this week to the NATPE Conference in Miami, intent on deal-making.
Networks are paying more for big hits, which are growing increasingly scarce, while sellers are scrounging to find deals for lesser shows.
And everyone is worrying about what the effect of new viewing platforms — from subscription VOD to DVR to digital — will have on the popularity of reruns.
“There are fewer breakout shows on broadcast television,” Bill Carroll, director of programming for Katz Media, said. “But you still need shows to fill out your schedule.”
Cable networks are still all hoping to catch the magic that TBS found with Big Bang Theory, which “is on about 500 times in an hour, but is just bulletproof and seems to keep getting more viewers,” Horizon Media senior vice president of research Brad Adgate said.
And these shows have shelf life. “There are hits that can really transform your business, and a syndicated show like that lasts a really long time,” said Ken Werner, president of Warner Bros. Domestic Television Distribution, the studio behind Big Bang Theory.
”In addition to Big Bang Theory, many industry observers point to to NCIS at USA as another show that had a deep impact on a network. USA, which has shown the off -CBS Navy cop procedural since 2008, will debut NCIS: Los Angeles this fall, along with Modern Family. The network reportedly shelled out more than $2 million per episode for the latest installment of the NCIS franchise.
However, there aren’t as many likely candidates as there once were, in a programming universe that seems to endlessly fragment with pay cable originals followed by basic cable originals followed by originals of varying lengths and costs on Netflix and YouTube.
Ironically, the success of cable’s original programs isn’t helping. Both Adgate and USA senior vice president of research Ted Linhart said broadcast networks are imitating cable with more quirky one-camera sitcoms, serialized dramas and supernatural shows, all of which fare worse in off -net repeats than traditional sitcoms and dramas.
And with viewers able to save new episodes to DVR or watch whole past seasons of shows on-demand or on Netflix, Hulu and network websites, shows have “more miles on them than they used to,” Michael Wright, president of programming for Turner, said.
Wright, Carroll and Adgate all said shows that skew younger may be particularly affected in reruns. “Younger viewers are more tech-savvy and have that expectation for immediate gratifi cation now,” Carroll said. “They want to see it when they want to see it.”
The catch is that no one is really sure what the impact of new options will be on off-net viewing. Modern Family had only run in repeats three times before USA pounced, Blaney noted, so there was no way to really judge its staying power.
Chuck Saftler, executive vice president at FX Networks, said the DVR has changed the metrics: Viewers may set their DVR just for new episodes, skipping all repeats automatically. “Buyers are working in a dark closet in terms of its effect right now.”
Adgate said the fact that Modern Family is a “very heavily time-shifted show” translates to a “high level of viewer engagement.” Whether that translates into off-net ratings will be a test of the new playing field, he added.
The “holy grail,” Linhart said, would be high ratings, high DVR usage and repeatability. Modern Family had the first two from the word go. Its rerun numbers, he noted, have improved over time, leading USA to feel even more confident in its purchase.
Beyond the DVR are over-the-top SVOD services such as Netflix and Hulu and all the other digital options. Werner sees a “virtuous cycle” — one free of cannibalizing. “Each venue can be monetized if appropriately windowed,” he said.
Modern Family at least has a balanced cast, while 2 Broke Girls has raised some eyebrows for its price because, while primetime tends to skew female in viewership, most shows that have soared in syndication have more balanced appeal.
The show has drawn male viewers, but does not have a male lead, unlike long-running off-net hits from M*A*S*H through Cheers, Seinfeld and Everybody Loves Raymond up to current shows like Big Bang Theory and Two and a Half Men.
Still, the price tags for Modern Family and 2 Broke Girls prompt questions in part because of the shift toward buying hits after just one season. “I’m a little surprised the cable networks are willing to spend so much on rookie shows that haven’t proven themselves yet,” Carroll said.
But competition is making it harder to say no to the best of the bunch, with the networks operating like baseball owners seeing just one or two elite free agents and knowing they’ll have to empty their wallets to beat the competition.
“There’s an upper strata now in price because it’s a land of haves and have-nots now that hit sitcoms are such a rare breed,” said Saftler, who added that FX’s acquisitions balance has tilted more toward movies in recent years as prices for top dramas and sitcoms have soared. “Most shows either sell for below $500,000 or above $1.5 million [per episode] now.”
Saftler did find one of the few “middle-class” shows in Mike and Molly, which reportedly sold for around $700,000 per episode. “We probably gambled right on that one,” he said. (The most recent new episode on CBS drew 10.8 million viewers, which is within shouting distance of the 11.4 million who watched the “upper strata” 2 Broke Girls.)
That opportunism is becoming more common for both sellers and buyers. Fringe has always been a critical hit, but it was never a ratings success and does not fit the profile of a strong off-net program. So once it was renewed for its fifth season, propelling it to the 100-episode mark, Warner Bros. sold it to Science Channel — but in a non-exclusive deal that will enable the studio to also syndicate it to a video-streaming service.
FX has taken several different tacks. When Lifetime decided to share its exclusive cable rights for How I Met Your Mother, Saftler grabbed it, seeing that FX could draw men to a show who might not find it at Lifetime.
FX also turned to what Saftler called a “hybrid,” signing onto Anger Management with the 10/90 production formula pioneered at TBS with two Tyler Perry series: If the first 10 episodes meet agreed-on ratings criteria, the network orders another 90 episodes, he said.
HYBRID MODELS
At TBS, Wright said he is also looking at any avenues, from non-exclusive deals to 10/90 arrangements to “rescuing” broadcast network shows. TNT revived Warner Bros.-produced Southland after it was canceled by NBC; TBS has done likewise with ex-ABC show Cougar Town. “We don’t care where the hit comes from if it’s on-brand and makes sense for our audience.”
Some optimists remain. Steve MacDonald, executive vice president of cable sales for Twentieth Television, said that while there are fewer scripted series (and thus fewer potential hits), the game hasn’t changed as much as people say.
“CBS couldn’t give away NCIS,” MacDonald said, and back in the day, “people said The Simpsons would never sell in syndication.”
Even in the lower tiers, there are plenty of shows that “no one wanted that provided great value” — like Scrubs (for Comedy Central), George Lopez (for Nick at Nite), Reba (for Lifetime) — where his company only made money on the second cycle.
Perhaps NBC comedies Parks and Recreation, Community or some other show could become that next surprise hit. In the end, you just have to take a chance.
“Our business kind of defies qualitative research,” Wright said. “You can dig into the numbers, look at the daypart, look at what you need and what a show might be compatible with but to a certain degree you are guessing.
“At the end of the day,” he added, “someone always says, ‘I don’t know, what do you think?’
TAKEAWAY
With soaring prices and fewer obvious hit shows to choose from, the stakes in the cable syndication game are higher than ever for networks.
