Debate over Repurposing. But What the Heck is It?
The impetus for this new strategy is clear. In light of the intense competition networks are facing due to the proliferation of program services, it is critical to better amortize program costs across multiple channels and to aggregate viewers. It also gives advertisers cross-platform opportunities. ABC's deal with its affiliates allows them to repurpose 25 percent of its entertainment programming in primetime after its initial run. The network has similar deals in place for news, daytime content, specials and movies.
However, while many people view repurposing as an important new opportunity, others warn against unforeseenable consequences of going for a quick financial fix.
For now, "broadcast networks are becoming increasingly dependent on cable repurposing for revenue," admitted Sandy Grushow, chairman of the Fox Television Group. "We have to be. The network television business is more challenged than ever trying to make sense out of its cost structure. Look at the way dramas are repeating these days in the summer. It's absolutely frightening. We have to figure out a way to make sense out of our business."
Lloyd Braun, co-chairman of the ABC Entertainment Television Group, agreed. "It's really hard. You're constantly challenged by looking at inventory and trying to figure out ways to pay for all of this. It's an enormous challenge."
Even those concerned about the back-end may not have any choice but to pursue repurposing if spiraling production costs aren't somehow alievated. NBC West Coast president Scott Sassa said it's time to scale back costs, both talent and production. "What you're really trying to do is change the structure of how the shows are produced and what they cost. In most productions, the below-the-line cost is not the problem; it's the above-the-line costs that are way out of whack and there's going to have to be an adjustment in what people are getting paid. It's not the minimum wage. It's the people getting paid dramatically above [minimum wage] to be in these shows. We can only indict ourselves for writing those checks."
Sassa also noted, "TV shows that are expensive rarely don't make sense. What hurts you in television is failure, and failure right now is too expensive because we re making commitments to multiple episodes, we're making commitments to actors so we need to make an adjustment in the business."
Moreover, said Fox's Grushow, "Network license fees cannot continue to increase; indeed they are going to have to come down. There will always be high-end shows but certainly there's going to have to be an effort made to come up with lower-cost scripted programming. One of the ways to make sense of that, obviously, is to off-set some costs through repurposing."
Of greater concern is whether cable channels will continue to act as revenue stream to offset costs. "We'll know in the next year or so whether or not cable networks deem a sufficient value for the money they're paying, which is somewhere in the neighborhood of $150,000 an episode. I don't think we can go to sleep at night assuming that money is always going to be there. But let's hope it will be because if it's not, we've got some real issues."
Les Moonves, president of CBS, isn't jumping on the repurposing bandwagon just yet. "We are considering it," he admitted. "I'm always scared of it. We just sold CSI in syndication, but there's going to be a two-year lag. In other words, it will be on cable starting next year, but it will be repeating the first-year programming. With the current economic situation, you understand it but it is still a question mark."
Grushow stressed that the effect repurposing will have on the back-end value is "really the big question. None of us really knows the answer. Although I think it's pretty clear if you are relying less on rerunning dramas on your own network and essentially pushing them off onto another network, logically it suggests that you're not doing any more damage to the back-end value than was already being done when you reran them initially."
Turner's Jamie Kellner pointed out that "all these new channels that have been put on the air have fragmented the audience more and more. So fewer people are watching the most popular shows than ever before. That means there's more value left in the negative after the premiere run. If you can establish a larger core audience, then there's the potential that the reruns will actually get higher ratings in primetime either on the WB or another network," which Kellner added -- in turn could actually increase the program's value in syndication.
For proponents, the benefits of repurposing are two-fold: Producers do it to generate additional revenue (because the number of viewers for the week has increased). Networks will do it if they'll generate additional core viewers for their new programs.
|Printer friendly Cite/link Email Feedback|
|Publication:||Video Age International|
|Article Type:||Brief Article|
|Date:||Oct 1, 2001|
|Previous Article:||Merger Muscle Helps Deflect Soft Ad Market.|
|Next Article:||Venevision: A Vision Beyond Latin America.|