As if on cue, the recent report showing a 23 percent decline in TV pilot production for 2006 elicited collective hand wringing from local officials and studio types. They pointed to a familiar villain regulatory and tax breaks from other locations.

“Aggressive incentives from other jurisdictions have now succeeded in attracting almost a third of the season’s pilot productions,” said Steve MacDonald, president of FilmL.A. Inc., the nonprofit organization that handles production permits and promotes local filming. “Without a significant response, we’re not likely to retain a majority share for much longer.”

But in the competitive TV programming business, market forces not government incentives wield supreme power, and right now the pilot market has turned away from Los Angeles. The FilmL.A. report bears out the marginal influence of governments, showing that while L.A. lost pilots, more were filmed in New York a city hardly known for regulatory laxity.

From a “program manufacturing” perspective, what resources does Los Angeles possess that give it an advantage over other venues? It has a large pool of skilled writers and performers, sophisticated technical infrastructure and access to large-scale distribution channels. Those factors are critical for scripted dramas and situation comedies.

But the industry hasn’t produced a breakout sitcom hit since the turn of the millennium. “That ’70s Show” began in 1998, and “Malcolm in the Middle” debuted in 1999. Both shows aired their final episode last month. Soon the sitcom may go the way of the western, the dramatic anthology and the musical variety show.

All those genres require a combination of resources that Hollywood can supply, but the new reality and documentary formats have democratized TV production, making it economical to produce a show almost anywhere. Cheap video technology and lack of a strong union tradition in those genres further free these shows from a specific location. Many of them positively boast of their non-Hollywood origins, i.e., “Survivor: Exotic Location.”

Additionally, the focus on L.A.’s declining share of the pilot marketplace ignores the growing size of the TV pie. According to the FilmL.A. report, production companies spent $370 million on pilots this year, of which Los Angeles garnered $216 million. In the old days of three major broadcast networks, it’s doubtful they ever spent that much on pilots, even in inflation-adjusted dollars.

By FilmL.A.’s own calculations, the total number of TV production days (not just pilots) in Los Angeles has nearly tripled since 1994. That kind of growth comes from the strength of the market, not incremental bureaucratic shifts. Los Angeles still hosts more than half of new shows a notable achievement and if the industry can retrofit or invent a popular TV genre that plays to L.A.’s strengths, that percentage will only grow.

Niche Flicks


Netflix Inc. has quietly moved from the “Internet Retailer” chair to the “Retailer-Distributor” seat. The change may not seem significant now, but that could change if Netflix keeps growing.

Bookselling chain Barnes & Noble Inc. employed a similar strategy a few years ago when it launched its own imprint of niche books. Traditional book publishers who suddenly found their distribution channel had morphed into a competitor were alarmed.

No such outcry has accompanied the Netflix move. The company’s new Red Envelope Entertainment group has become a regular on the film festival circuit, buying rights to independent features. Last week Netflix purchased the U.S. rights to “Sherrybaby,” a film screened at this year’s Sundance Film Festival. The deal includes theatrical, DVD, television and download rights. Netflix has agreed to let IFC Films handle theatrical distribution, currently scheduled for August 25. By November, the movie will join the other 60,000 titles in Netflix’s online library where customers can select their movie online and later receive the DVD in the mail.

Currently Netflix has 4.9 million subscribers, a 61 percent increase from the previous year, according to its first-quarter statement. “We can reach our goal of 20 million subscribers within the 2010 to 2012 time frame while delivering $50 million to $60 million in pretax income this year and 50 percent year-over-year earnings growth for the next three to four years after that,” said chief executive Reed Hastings, in the company’s fiscal year 2005 filing in January.

With growth like that, Netflix will soon control a significant chunk of the video rental market, much like Barnes & Noble has in the book space. The ownership of download rights gives the firm a foothold in what looks to be an emerging distribution arena, too.

But the Hollywood distribution machines needn’t fear. In the same way that B & N;’s books have veered toward compilations of previously published material, rather than celeb-author best sellers, so Netflix has picked its niche carefully. The company has acquired art films with narrow audience appeal, a disparate market that its distribution channel can uniquely serve.

According to the company, the strategy is to give “subscribers entree to little known films while giving filmmakers a platform to expose less commercial projects to a broad audience. With its acquisition of original content, Netflix can offer consumers a wide variety of films they might not otherwise see.”

Just for Kicks


With the World Cup throwing the spotlight on soccer, Wasserman Media Group has announced its acquisition of SportsNet, a professional soccer athlete management agency. With the addition of SportsNet to its portfolio, the Los Angeles-based WMG Management now has a large and high-profile roster of athletes across basketball, baseball, soccer and action sports.

The deal marks WMG Management’s entry into soccer and comes at a moment of convergence for the sport and its clients. Earlier this year, 13 of SportsNet’s clients were named to the 2006 U.S. World Cup Team. They include Landon Donovan, Chris Albright, Pablo Mastroeni, Ben Olsen, Eddie Pope and Josh Wolff. In addition, SportsNet represents U.S. Head Coach Bruce Arenas.

SportsNet has negotiated contracts on behalf of its clients with Major League Soccer and foreign soccer clubs. “The practice complements our existing business on the marketing side of football in Europe, as well as provides a global pipeline of relationships within the world’s most popular sport,” said WMG President Am Tellem.

SportsNet principals Richard Motzkin and Dan Segal will co-manage WMG’s soccer practice. Segal will work in Bethesda, Md., while Motzkin will move to WMG’s corporate headquarters in Los Angeles. “Dan and I are extremely enthusiastic to be joining WMG, an organization that shares our vision and strong belief in the long-term prospects for professional soccer in the United States,” said Motzkin.

Staff reporter Joel Russell can be reached at (323) 549-5225, ext. 237, or by e-mail at

[email protected]

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