TV Programming Final Exam
Cable Networks Revenue Sources
Advertising Carriage/affiliate fees
Netflix: Verticals
"Verticals" are super-specific genres of film and television, such as young-adult comedies, period romances, or sci-fi adventures. Verticals allow Netflix to see in which areas it has many programs and in which areas it may want to add program
SVOD Stats
2020: Americans subscribe to an average of 3 streaming services, and has only gone up since 2017, especially with the pandemic
Niche/Theme Networks
Appeal to specific audience segments Usually have a single program type Target a defined demographic with a mix of program types Can provide better targeted advertising May appeal to group willing to pay for programming
Reading: R.I.P. Cable: Why Hollywood Is Slowly Killing Its Biggest Moneymaker
Basic cable networks prospered for years with their dual revenue stream: - Carriage/affiliate fees and advertising revenue Until recently, it was cable that drove much of the entertainment industry's bottom line. Cable networks made big money for media conglomerates This led them to expand their portfolios of channels Cable networks started out airing cheap programming in the 1980s, so as cable networks grew and stole more viewers away from broadcast, they were able to pay top dollar for movie packages and off-network broadcast shows. With the further success this popular programming provided them, cable networks were able to invest in pricey sports rights and original series, in turn increasing their carriage/affiliate fees and advertising revenues even more Netflix began providing cable networks an additional revenue stream by licensing cable networks' original programming, gave shows the Netflix bump, turning their shows into bigger hits. - Viewers began thinking of those shows as Netflix shows. - Netflix began investing billions to crank out its own original programming. Meanwhile, cord-cutting began to increase - The number of pay-TV households peaked in 2010 at 105 million, now it's down to approximately 82.9 million, and it's expected to continue to drop Most general entertainment cable networks have suffered double-digit drops in ratings in recent years. Young viewers, and kids in particular, don't think in terms of channels anymore - Viewers still watch those networks' shows, but on streaming platforms Conglomerates now are investing less in their cable networks and are instead focusing on their still-healthy intellectual properties and the brands behind them - Companies want to maintain their successful brands in the streaming world, and be seen as content creators rather than just network Cable networks are changing their programming strategies. - Frequently air marathons of programs that successfully continue to attract audiences - Many networks have been reducing scripted originals. - A lot of basic cable networks are going back to the strategies networks started with in the 1980s - Seeking to define their niche, it's important for cable networks to have a distinct brand There's a sizable portion of the audience that will hold on to cable because they still see it as a utility. - Will bottom out at around 30 million households - Conglomerates with sports rights will either have to include a streaming component
Cable Scheduling Strategies
Blocking Marathons Repeat showings: can allow cume to be sold to advertiser
Broadcast Program Model
Broadcast network series seasons have traditionally been 22-26 episodes Broadcast network program constraints: - Must leave time for commercials/promos - Particular number of acts and act breaks - Standards and practices - Typically aimed at a broad audience
Original Series on Cable
Cable (and streaming services) can provide more freedom for program producers Don't face the same structural and content restraints Can be expensive and more risky than off-network programming Reward: having promotable content that can't be seen anywhere else bringing attention/buzz to a network and contributing to brand identity
Off-Network Programs on Cable
Cable networks compete for popular off-network programs More easily attract large audience Off-network hits can be price
HBO Max IP and Original Programming
DC Comics: Doom Patrol, Green Lantern, DC Superhero High, Justice League Dark, Titans Sesame Street: The Not-Too-Late Show with Elmo Others: Gossip Girl, Pretty Little Liars: Original Sin Based on movies: The Griswold
Streaming/Online Programming
Differences v. broadcast/cable: - Viewer receives a single transmission - Absence of a prestructured schedule of programs - Viewed on TVs, computers, phones, or tablets - Requires good connection speeds, sufficient bandwith to transmit huge amounts of data - Lacks geographic restrictions and fixed channel capacity - No license or franchise needed, very little regulation - Sometimes called Over-the-Top/OTT programming
House of Cards
First Netflix original series Data-driven decision. Netflix knew: - A lot of users watched the David Fincher directed movie The Social Network from beginning to end. - The British version of House of Cards on its platform was a hit on the service. In 2011 Netflix outbid HBO and AMC for the rights for a U.S. version of House of Cards. Straight to Series: Netflix commissioned two seasons of the show of 13 episodes each without first shooting a pilot for a total cost of over $100 million According to Netflix, House of Cards was the most streamed piece of content in the United States and 40 additional countries at the height of its success
Niche Streaming Services
Focus on a specific type of content for a specific audience and try to serve neglected/underserved audience ESPN+: Sports BritBox (British programming), BroadwayHD, PureFlix (Christian programming) Limited customer base which limits potential revenues and ability to pay for content • May find themselves absorbed by larger general services: - Ex: DC Universe, Crunchyroll (anime and manga) and HBO Max
Reading: "Your Favorite Sitcoms and Dramas Are Leaving TV For Good"
For the first time in at least a decade, the number of new scripted shows released in the U.S. will decline. Peak TV Era - Cable networks increased their output of scripted shows from 30 in 2002 to more than 180 by 2017. - This strategy made sense when pay-TV subscriptions were growing - Networks could re-invest carriage/affiliate fees and advertising revenues into shows that boosted their prestige. This original programming helped networks secure carriage by cable operators. - But cable networks are now losing customers - And TV advertising is slipping - Cable networks are cutting back on scripted shows, and many networks have stopped making original scripted programming. Conglomerates are more focused on investing in programming for their streaming services Falling ratings mean the broadcast networks have to be more strategic about spending The cost of sports is soaring, and that remains the top priority. To fill the rest of the prime-time hours, unscripted is cheaper and easier to produce (especially during a pandemic). - Singing, dating, reality shows - Imported series - Theatrical movies The overall volume of new TV will still grow because of investment in new streaming services.
AMC-Universal Deal
For years, Universal and other studios have pushed to shrink the window between a film's theatrical release and its debut on home entertainment. - Traditionally, that frame of exclusivity has lasted for 90 days - Studios have argued that movies make most of their box office revenues in the first few weeks of release and waiting to debut films on-demand requires them to spend more money to advertise again Universal Pictures and AMC Theatres have signed a 3-year agreement that will allow the studio's films to premiere on premium video on-demand within three weeks of their theatrical debuts. - Now, Universal will have the option to put its movies on digital rental services after they have played in theaters for 17 days, only premium on-demand ($20 a pop), no lower than the $3 to $6 range, until three months after they debut in cinemas. - AMC will share in these new revenue streams so they get a cut of the rentals The studio is most likely to capitalize on its new freedom with mid-budget fare, comedies, and horror movies that might not have as robust runs in cinemas Netflix has tried and failed to force theaters to show its films on their screens - AMC has refused to show Netflix releases, arguing that the films debut on the streaming platform too early. Other theater chains are likely to feel pressure to sign similar pacts and other studios are likely to insist that AMC and other theaters allow them to release their films in the home earlier. In the long run, this could be disastrous for theaters. - If moviegoers decide it's a better deal to skip theaters and wait a few weeks to pay a steep rental fee, that could take a big bite out of box office revenue Hollywood has made a point of backing comic book adaptations and franchise fare because it claims that the economics of the theatrical business are so brutal, they don't reward creative risk-taking. - It's hard to make a profit on anything that doesn't have a huge opening weekend.
Netflix Originals
Has produced more than 1500 original titles since 2013 Expected to spend $17 billion in 2020 - Spent $12 billion on original content in 2018, up to $14.6 billion in 2019, more than the other big ones combined Netflix has high levels of debt, which it hopes to make up for in new subscriptions. Originals strategy is to have some content monthly for everyone, not all content needs to be a big hit Original program spending is motivated by economics of owning shows rather than licensing them from studios. - May be difficult to license content from Big 4 Netflix has been signing big-money production deals with top TV producers - $300 million deal with Ryan Murphy (Glee, American Horror Story, American Crime Story, Pose, 9-1-1) - $150 million deal with Shonda Rhimes (Grey's Anatomy, Scandal) - $100 million deal with black-ish creator Kenya Barris - Multi-year pact with Nickelodeon for animated originals - Multi-year film and TV deal with "Game of Thrones" duo David Benioff and Dan Weiss - Greater creative freedom attractive to content creators Efforts to ramp up production of original films - Bought interest in small theater chain to enable films to qualify for Oscar noms Netflix doesn't make pilots - Almost every project it buys is purchased with the intention of going straight to series Management says there's no such thing as a "Netflix show" - Shows do not need to fit a particular brand, as with many networks - Says its brand is personalization
Importance of Off-Network Programming
Historical importance to new program services: - Independent TV stations and PTAR - Early cable networks - Streaming service
Major Streaming Services-Affiliated
Hulu (Walt Disney Company) Disney+ (Walt Disney Company) HBO Max (AT&T/WarnerMedia) Peacock (Comcast/NBCUniversal) CBS All Access (ViacomCBS)
Traditional Backend
In a traditional TV series licensing deal, the network airing the first run of the show pays a fee of only 60 to 70 percent of the show's production cost. Profit participants can see paydays of tens of millions of dollars if the show is a big hit, from off-network, streaming and international sales, starting 4-5 years into the show's run. - Recent examples: Young Sheldon, The Good Doctor, Black-ish, This Is Us and potentially 9-1-1 The syndication success of one or two shows could bankroll 35 other production
Netflix Series Longevity
Not many Netflix series have gone past 3 seasons The shorter runs may be spreading to other platforms, where shows also are ending relatively quickly
Netflix Cost-Plus Model
It involves the streaming platform effectively "buying out" a series backend at the outset, in exchange for paying a full license fee plus a premium (+30% range). It allows studios to start making profit from Day 1 vs. incurring deficits for years under the traditional broadcast/cable model. Producers get more bonuses and pay bumps the longer a series carries on - Increase modestly from season 1 to season 2 and season 2 to season 3. - Increase much more significantly after season 3 Financially, it makes more sense for Netflix to commission a new show than to renew an underperforming show which is only going to get more expensive the longer the series goes Netflix's deal structure, which comes during contract talks with production companies, make it very hard for TV networks to compete. - In exchange for the upfront payments, outside studios give up the potential upside of owning a long-running series For a lot of creators, the Netflix deal is great because they get much closer to full budget to make their shows, as well as Netflix has a reputation for being hands-off Netflix didn't create the cost-plus model but they popularized it
Netflix: Binging
Largely credited with "binge-watching" phenomenon Netflix invented the idea of binge-releasing: dropping full seasons at once rather than an episode a week as had been done since the beginning of television
Cable Networks Overview
License existing shows Commission original programming Package programming and advertising Deliver to MVPDs Support with advertising and promotion
History of Streaming Television
Mid-2000s: TV programs become available via the Internet. - 2005: iTunes begins offering TV programs for download for a fee - 2005: Video-sharing site YouTube launches, allowing users to share illegally posted television programs, among other videos, a few years later, TV networks create websites where programs could be streamed online 2007: Netflix begins providing streaming content 2008: Hulu, owned by NBC and Fox, launches 2008: Apps for mobile devices become available that allow viewing of content on mobile device
Major Streaming Services- Unaffiliated
Netflix Amazon Prime Apple TV+
Netflix Use of Data
Netflix collects data from their 150 million-plus subscribers and creates detailed profiles of them, based on things such as: - The time and date a user watched a show - The device used - If the show was paused - Does the viewer resume watching after pausing? - Do people finish an entire TV show or not? - How long does it take for a user to finish a show - Screenshots of scenes people might have viewed repeatedly - The rating content is given - The number of searches and what is searched for - Time of the day and week in which content was watched and how it influences the kind of content watched Netflix uses its recommendation algorithm to suggest TV shows and movies based on user's preferences. - According to Netflix, over 75% of viewer activity is based off personalized recommendations. As they spend more time watching, the company can collect more data on their viewing habits, allowing it to refine its decisions about future programming. Netflix uses its big data and analytics tools to decide if they want to greenlight original content. House of Cards trailers example Netflix doesn't typically share its data with its program creators Netflix looks at which shows new subscribers watch first, it lets them know if a show is driving people to sign up for Netflix
Netflix: Taste Communities
Netflix doesn't group members by traditional demographic categories Subscribers are divided into "taste communities" (or clusters) based solely on past viewing behavior - Some 2,000 taste communities - Users can belong to multiple communities
Netflix: Season Length
Netflix has reportedly switched from the initial (and traditional) 13-episode seasons to seasons of 10 episodes or less. - Reportedly, the shorter seasons are considered optimal for consumption As an asset, having 30 episodes of a series (three seasons) is considered enough to satisfy viewers discovering the show.
House of Cards Marketing
Netflix made 10 different cuts of the trailer for House of Cards, each geared toward different audiences, the trailer you saw was based on your previous viewing behavior. If you watched a lot of Kevin Spacey films, you saw a trailer featuring him. Those who watched a lot of movies starring females saw a trailer featuring the women in the show. And David Fincher fans saw a trailer emphasizing his role.
Netflix Renewal/Cancelation Decisions
Netflix will consider how big its audience is and whether the show is cost-effective. In making this determination, Netflix looks at two viewership data points within (1) the first seven days and (2) the first 28 days of a show being available on the service. Within these time frames, Netflix looks at: - Starters: households who watch just one episode of a series, and - Completers/Completion: subscribers who finish an entire season within 28 days Netflix is known for giving writers and producers creative freedom Netflix has been relatively patient, picking up a significant portion of its freshman series for a second season, giving them time to find their legs. - But as the shows' prices start going up, the network tightens its renewal criteria. - Netflix usually gives a show 2 or 3 seasons at least Other factors: - Strong reviews from critics - Awards recognition Netflix seeks to ensure that its series will remain Netflix exclusives even after their cancellation. - Netflix's deals with producers typically prevent them from taking a cancelled series to another programming service for 2-3 years
Deficit Financing for Network Programming
Network pays for limited rights to air show Studio owns the show Network licensing fee covers only a portion of production costs Studio can incur a deficit of millions of dollars per season Studio hopes to recoup deficit (and more) in off-network syndication Off-net programs often stripped Need about 100 episodes (4-5 seasons) to be successful Also home entertainment, international, streaming service deals
Transactional VOD
Pay based on how much content you watch, typically renting/buying individual titles - Two subcategories: DTR and EST - DTR, or download to rent: viewers can watch content for a specific period of time for a fee - EST, or electronic sell-through: a customer pays a higher fee to have permanent access to the content Renting v. buying content - Examples: Apple's iTunes, Google Play, some Amazon content Tends to offer more recent releases
Ad-Supported VOD (AVOD)
Provides consumers free-to-access content in exchange for viewing ads Tends to be shorter in length and less often premium, with some exceptions YouTube, Peacock free versions
Supernatural
Premiered on The WB in 2005, moved to The CW in 2006 Was supposed to conclude in May Monster of the week formula With longer story arcs, often drawing on Christian mythology, with angels and demons as characters Episodes have a mixture of tones/style Linear ratings for original episodes often low, although solid by CW standards CW strategy is to make its shows available on digital platforms The CW made an exclusive deal with Netflix for all its series to appear there - Full seasons initially available when the next season premiere aired, lately they're available 8 days after the season finale aired Netflix bump for Riverdale: 60% increase in live viewership from season 1 to season 2 The CW could still make cable/broadcast syndication deals Deal signed in 2011, renewed in 2016 Netflix agreed to pay for each season of each CW show, with the value increasing the more seasons there are of a show Initial 4-year deal valued at $1 billion which provided The CW some financial stability and revenue for its shows from day 1, allowing some shows to go straight to series The CW declined to renew the deal in 2019 but new seasons of shows on the air as of 2019 will continue to appear on Netflix
Off-Network Syndication
Procedurals and sitcoms have done best Serialized shows typically don't do well in syndication But do well on streaming service
Off-Network Syndication
Program originally aired on a broadcast network (Or cable network = off-cable) Right to air reruns May air simultaneously with new episodes on broadcast network Reduced risk for stations
Pay/Premium Cable
Provide commercial-free premium programming for an additional fee HBO, Showtime, Starz, Cinemax Subscription fee Splinter networks/multiplex channels Try to attract largest cumulative audience over a month Churn Minipay services: provide older content for lower fee Recent theatrical releases Output deals Increasing original programming
Categories of Programming
Repurposed content: traditional TV programs: - Library/licensed content was important for new services to attract/retain subscribers - Select titles becoming important to help differentiate services Original content: produced specifically for online distribution - Helps establish/differentiate services
Premium Cable Scheduling Strategies
Rotation: premium cable networks reusing content Repeat showings: premium cable networks airing movies multiple times so people can watch it later Premieres: new content on the service being premiered on that service for the first time Carryovers: movies from the previous month being repeated Encores: movies returning to the service from the previous month
Direct-to-Consumer (DTC) SVOD Services
Services have a direct connection to subscribers, providing them with data on viewing habits not available with linear television - Model refined by Netflix Other entertainment companies have started their own DTC services - To compete, these companies need to invest billions of dollars in high-end content, while at the same time forgoing much of the traditional licensing revenue Likely to hasten the pace of cord cutting and put pressure on carriage fees for channels that may no longer be first in line for the hottest properties coming from their parent studios
General Entertainment Cable Networks
Similarities to Big Four broadcast networks Mix of rerun and original programming Live sports Theatrical and original films Advertising Main difference: new
Disney+ IP and Original Programming
Star Wars series: The Mandalorian, Obi-Wan Kenobi series and others in the works Marvel: The Falcon and the Winter Soldier, WandaVision, Loki, Hawkeye, others in the works High School Musical: High School Musical: The Musical: The Series Series based on films: The Mighty Ducks, Turner & Hooch, National Treasure, Percy Jackson & the Olympians
Original Programming
Streaming services have relied on existing IP for some of their original programming - Netflix: Disney's Marvel series (Daredevil, Jessica Jones, Luke Cage, etc.) Revivals: Gilmore Girls (Warner Bros.), Fuller House (Warner Bros.), Arrested Development (FOX) But, studios now focusing on developing their own IP as series for their affiliated streaming services
Subscription VOD (SVOD)
Subscribers can watch as much content as they want in exchange for a recurring fee, typically monthly and/or annually, model that has come to dominate v. transactional Netflix, Disney+, HBO Max Can have hybrid AVOD/SVOD services: Hulu Churn a major issue for subscription services
CBS All Access IP and Original Programming
To be rebranded Paramount Plus in early 2021 Star Trek series: Star Trek: Discovery, Star Trek: Picard, Star Trek: Lower Decks, Star Trek: Strange New Worlds Based on movies: Grease: Rise of the Pink Ladies The Good Wife: The Good Fight
ScoobyNatural
Warner Bros. owns the rights to both Supernatural and Scooby-Doo and saw the value in bringing the two together - Otherwise would have been copyright infringement, so the next best option would be to use enough of Scooby-Doo to "conjure up the original"
Theatrical Films on Cable
Windows: PVOD/VOD, premium cable, ad-supported cable/broadcast networks Cable networks have replaced broadcast networks as primary buyers Can more easily draw large audiences Can be shown multiple times Premium networks usually get rights first, then advertiser-supported cable networks