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Friday, May 27, 2022

Show Schedule Ready for Fall?

The rapidly expanding bubble of scripted TV production looks to be headed for another banner year – and another.

Some 419 scripted shows were created last year, a 158 percent increase from 2011, according to FX Networks Research. That number is projected to hit 550 this year and rise again in 2017.

After that, however, some of the air is expected to come out of the balloon.

“It now seems clear that, at a minimum, the peak will be in calendar 2017,” said John Landgraf, president of FX Networks, at the Television Critics Association press tour in August.

The problem? A finite number of dollars to fuel the ads and subscribers needed to support all this programming.

Much of the surge has come with the proliferation of original content on so-called over-the-top streaming services, platforms that bypass broadcast and cable networks. While that’s been great for production crews in Los Angeles and elsewhere, it has also caused advertisers to shift dollars to the expanding digital realm, and more competition for those dollars has put downward pressure on ad rates. Traditional TV ad rates fell 3 percent last year after a 4.4 percent drop in 2014, according to research firm Media Dynamics Inc.

What’s more, the strategy of adding more original shows also isn’t adding subscribers to Netflix Inc.’s customer base as quickly as it used to. Despite its ambitious lineup of original productions, Netflix added just 1.7 million subscribers in the quarter ended on June 30, much less than the 3.3 million subscribers it added in the same period a year earlier.

If the fragmentation of viewers becomes even more problematic, it could seriously dent demand for new television programming, said Neil Landau, a screenwriter and associate director of UCLA’s Department of Film, Television, and Digital Media.

“Why would you pay hundreds of thousands of dollars for a 30- or 60-second spot when you are getting a fraction of the viewers?” he said, noting the possible impact on ad-supported programs.

Producers have been able to cater to smaller audiences – called narrowcasting, as opposed to traditional broadcasting – in recent years by taking advantage of ratings numbers, social media information, and other internal data sources to market programming to certain demographics, said Rich Hull, executive chairman of Santa Monica’s Pongalo, a Spanish-language streaming video platform.

“The economics of niche TV suddenly works in a way it didn’t 10 years ago,” he said.

Breaking point

Despite more sophisticated marketing, the industry might be reaching a breaking point, where good shows get lost in the noise and aren’t able to connect with enough viewers to remain financially viable. The top 20 percent of scripted shows average 10.5 million viewers, the bottom 20 percent average only 380,000, according to FX Networks Research.

“While there is more great television than at any time in history, audiences are having more trouble than ever distinguishing the great from the merely competent,” said Landgraf at the Television Critics Association press tour. “I do this for a living, I have a pretty good memory, and I certainly can’t come close to keeping track of it all.”

The concern is that content production will in the next few years outpace demand, which could have a chilling effect on the industry.

“Some (shows) won’t make it,” said Landau. “I think we’ll see at least 100 less scripted shows by 2018.”

The production explosion over the last two decades, which some refer to as the medium’s Golden Age, arguably started with HBO’s “Sex and the City” in 1998 and “The Sopranos” in 1999, noted Hull.

Since then, basic cable channels such as AMC have gone full steam ahead with niche series such as “Mad Men” and “Breaking Bad.”

Netflix changed the game further with its slate of original shows, including “House of Cards” and “Orange Is the New Black,” which both debuted in 2013. And the Los Gatos company has only ramped things up since then, investing $6 billion in content production this year with 71 shows either released or in production.

Netflix is betting that its ability to attract a wide variety of viewers will justify its robust production slate, said Peter Csathy, chairman of Burbank’s Creatv Media.

“The data piece can help (Netflix) find their audience and target them more effectively, so they have a better chance to have their stories watched,” he said.

While subscription streaming services don’t have to worry about advertisers because they generate revenue from monthly fees, they have needed to beef up their libraries to attract new users.

That’s been a boon to shows produced for major networks and basic cable, which have been able to recoup production costs and generate additional revenue by selling streaming rights.

New markets

But after-markets for TV content might not be enough going forward. Fearing tightening U.S. markets for advertising and subscriber dollars, some producers have started targeting foreign audiences. In February, Warner Bros. Entertainment Inc. acquired a stake in DramaFever, a streaming-video subscription service specializing in South Korean TV shows and film dramas. And, of the 1.7 million subscribers Netflix added in the quarter ended on June 30, 1.5 million customers came from foreign markets.

“The major media companies are starting to recognize there are major opportunities in international audiences,” said Hull.

Yet, despite appearing as a natural outlet for a glut in U.S. productions, international markets might be slow to yield profits, especially when it comes to recouping investments on original programming. In May, Netflix launched French-language show “Marseille” in France; it is now available to U.S. viewers. Unfortunately, the program was widely panned in France despite its slick production and big-name cast that includes actor Gérard Depardieu.

“There is going to be a learning curve with international production,” said Hull. “‘Marseilles’ was just that. Once they figure out what works, they’ll say, Oh, my God, this is making us a lot of money, let’s make more of that.”

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