Original Series Killing Reruns: WGN-TV Takes a $ Bath

News from the world of Television

Original Series Killing Reruns: WGN-TV Takes a $ Bath

Postby jon » Sat Oct 22, 2016 11:38 am

The New Golden Age of TV Is Hurting the Lucrative Reruns Business
Cable networks are turning to original TV series to stand out in the crowd.
Gerry Smith
Bloomberg Businessweek
October 19, 2016 — 10:10 PM MDT

For decades, there was a simple blueprint for getting rich in television: Make a show, hope it gets renewed for 100 episodes, then sell the reruns to cable or local broadcast stations. But in today’s new “Golden Age of Television,” the lucrative syndication deals that made the likes of Jerry Seinfeld and Law & Order creator Dick Wolf incredibly wealthy are increasingly rare. While there are more TV shows than ever—a record 500 scripted series will air next year—their value in the afterlife is in doubt.

“There’s still money to be made, but you’re not going to be Charlie Sheen lighting cigars with hundred-dollar bills,” says Bill Carroll, director for content strategy at consulting firm Katz Television Group, referring to the former star of Two and a Half Men, one of the few sitcoms in the past decade to see a massive payday in the syndication market.

Reruns are under pressure because cable networks, which have been the deep-pocketed buyers of old shows, are making more original series to stand out in the crowd. The number of rerun shows carried on cable dropped from 159 in 2013 to 128 last year, according to researcher Nielsen. The number of original series on basic cable jumped from 70 in 2010 to 181 last year. Time Warner’s Turner unit, owner of the TBS and TNT cable channels—comfortable retirement homes for recycled network series including Friends, Seinfeld, and Law & Order—will boost its original programming by 80 percent by 2018 as ratings for its reruns weaken.

Showing repeats won’t cut it anymore as audiences flock to more original shows. The cable network WGN America paid more than $1 million per episode for reruns of Elementary and Person of Interest. Both dramas drew an average of 10 million to 12 million viewers in their debut seasons on CBS, but last season neither got more than 260,000 viewers on WGN. Earlier this year, WGN’s parent, Tribune Media, took a $74 million charge after those shows failed to win audiences. In recent years, Time Warner and Viacom have also taken large writedowns after acquiring troubled reruns such as Community and Hawaii Five-0. Another reason cable networks are moving away from reruns: They want to own the rights to shows, so they can profit from selling past seasons in the international market, which is still strong. “Reruns are losing steam,” says Geetha Ranganathan, an analyst at Bloomberg Intelligence. “That’s the genesis for why there’s so many original shows these days.”

The market for past seasons is also being threatened, because TV series are cutting back on the number of seasons and episodes. To improve their quality, more networks are creating “limited series” that are meant to last just one season, such as FX’s Emmy winner The People vs. O.J. Simpson. Instead of more than 20 episodes, a growing number of series have seasons with as few as 10. Shorter-run shows can attract bigger-name stars such as John Travolta (in the O.J. Simpson series) or Matthew McConaughey (in True Detective) who wouldn’t commit to multiple seasons. But they also limit how much money can be made in reruns, which are sold on a per-episode basis. Typically, 100 episodes, roughly five seasons, are needed to syndicate a show that can be aired five days a week.

The cable syndication market will be worth $22 billion next year, according to RBC Capital Markets. Selling such series to streaming services will bring in $11 billion. While cable networks are relying less on old shows, streaming services such as Netflix, Amazon.com, and Hulu are still aggressively snapping them up. And some streaming services don’t even require a successful TV run before they commit. Netflix in 2014 bought the exclusive rights to the CBS sci-fi drama Zoo before the first episode even aired on television, assuring the show would be profitable from Day One, says Scott Koondel, CBS’s chief corporate content licensing officer. “For many shows we put on the air, we can be in the black before we see the first script,” he says.

Netflix, Amazon, and Hulu generally want reruns of only certain shows, such as serialized dramas, because their subscribers enjoy binge-watching them in one sitting. Hulu, for instance, recently acquired the rights to previous seasons of Showtime’s Homeland. Cable networks are less interested in reruns of serialized dramas, because those require viewers to have seen earlier episodes to grasp the plot. Instead, they prefer easy-to-understand procedure-driven shows that appeal to broad audiences, such as Law & Order, or simpler sitcoms with laugh tracks like Two and a Half Men.

Cable networks say they aren’t completely abandoning reruns. They still need to fill 24 hours a day of programming and can’t do it all by making expensive original series. Earlier this month, TBS acquired the rights to broadcast past seasons of the NBCUniversal-produced cop comedy series Brooklyn Nine-Nine starting next year. “If you can find another show like Big Bang Theory, that has been a runaway success on TBS, we would still be incredibly interested in having shows like that reside on our networks,” Turner Chief Executive Officer John Martin said at a recent media conference.

There hasn’t been another comedy that popular in several years. That’s because streaming services are hurting the TV ratings that the industry uses to determine which shows are successful and how much should be paid for their reruns in syndication. TV executives argue, however, that selling reruns to Netflix allows streaming service subscribers to discover a show, driving them to watch the next season live on TV when the original airs—and making it more valuable. “It’s an opportunity to get a new viewer that we might not have gotten,” CBS’s Koondel says.

Katz Television Group’s Carroll says the market for reruns is evolving, with a growing number of buyers overseas. Whoever can find the next Big Bang Theory, which has reportedly made more than $1 billion in syndication revenue since its reruns began in 2011, will be richly rewarded. “If you have a breakout hit, you won’t have just one vacation home, you’ll have five,” Carroll says. “But it’s not as easy as it used to be.”
User avatar
Advanced Member
Posts: 9200
Joined: Mon May 08, 2006 10:15 am
Location: Edmonton

Return to On the small screen

Who is online

Users browsing this forum: No registered users and 8 guests