Cable Can't Live on Originals Alone

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When one thinks of cable programming these days, breakout original series such as MTV: Music Television's The Osbournes,
FX's The Shield, USA Network's Dead Zone
and Turner Network Television's Witchblade
come quickly to mind.

But as appealing as those and other originals are, most cable-network programming lineups are still dominated by acquired series and movies.

While networks such as Nickelodeon, E! Entertainment Television and the Discovery Networks U.S. services offer mostly original programming fare, the majority of cable services still trot out off-network series and movies most of the time.

Most industry executives say there's nothing wrong with a healthy and balanced mix of acquired and originally produced programming. In fact, popular acquired product is desirable because it helps build audiences for new, untested original shows.

But some operators claim that some networks' heavy reliance on expensive, acquired product — and the growth of repurposed programming — could eventually decrease the perceived value of cable programming to consumers who turn to the medium as an alternative to the broadcast networks.

SURVEY RESULTS

Cable has recently garnered much-deserved accolades for the performance of its industry-exclusive shows. Just last month, USA's Dead Zone
set a ratings record for an original cable series debut with its 4.7 household mark, while The Shield, The Osbournes, TLC's Trading Spaces
and other original cable shows have helped the industry set household-share records during the first six months of 2002.

But a review of the majority of ad-supported cable network's first-quarter lineups showed that acquired programming made up for 72 percent of what was telecast, according to Nielsen Galaxy Research as interpreted by Warner Bros. Corporate Research.

(The Warner Bros. research does list programs labeled "various" — including much of Discovery Channel's programming, but mostly acquired movies — as acquired programming. Even if all the "various" offerings were defined as original, that category still wouldn't reach the 50 percent mark, according to Nielsen Galaxy.)

General-entertainment networks rely most heavily on acquired product. A whopping 95 percent of TBS Superstation's programming is non-original fare.

Sister service TNT's lineup was also more than 90 percent acquired, while USA Network fell in at 89 percent, according to the report.

When cable programmers launched in the early 1980s, most ad-based networks — in an attempt to draw both viewers and advertisers — relied heavily on off-network acquisitions that matched the network's particular niche.

Even today, new networks often rely on acquired product until they can effectively afford to create and develop originals.

"You have to have a base of viewership, so to start with you have to have acquisitions," said USA Network executive vice president and general manager Michelle Ganeless. "Ideally, both your acquired and originals are on-brand so that your attracting the same viewer.

"What you get with acquisitions is tonnage, and known quantities that people love."

NICK WEANED OFF

"I think the foundation and building blocks of a basic-cable network come from the acquisition market," said Herb Scannell, president of Nickelodeon, TNN: The National Network and TV Land. "You use popular shows to build an audience. But we're now defined by our original programming and not what we acquired."

He pointed to Nickelodeon, which launched in the 1980s with mostly acquired shows like the Warner Bros. Looney Tunes
cartoon catalog. As the network matured, Scannell said, it was imperative for Nick to establish itself by creating brand-defining programming.

In the early 1990s, the network began to develop original animated and signature series such as Rugrats
.

"We're now the most prolific producer of kid television in the world, with over 20 series in production," Scannell said. "You use popular shows to build an audience, but the question is whether or not you ever get off of that."

But Nickelodeon is the exception rather than the rule, as most networks have yet to commit the millions of dollars necessary to build up a substantial amount of original programming.

While original series can cost $500,000 or more per episode, the success rate for such shows is quite small. As a result, some network executives said established programs present a much more economically viable proposition.

As Turner Entertainment Networks president Brad Siegel put it, investments in original series are "risky."

TNT only has two original series in development — the sophomore series Witchblade
and the yet-to-debut The Residents.
TBS Superstation also has two, Ripley's Believe It Or Not!
and Worst Case Scenario.
But both networks offer or will schedule a slew of sports and original movies, Siegel said.

"Our plan has not been to develop dozens of pilots and original series with the hope to get a hit," Siegel said. "We can't afford to be in that business, given our commitment to all the other programming we're investing in."

(Tellingly, a new original series that Bravo has promoted—Breaking News, a drama centered on a cable-news network — was originally developed for TNT, which never aired an episode. Bravo plans to kick the show off with two back-to-back episodes on July 17. TNT also got burned on the Wall Street-based original drama Bull, cancelled after running for one season.)

Acquired product provides networks with an established commodity that doesn't need a major marketing push to build awareness among viewers.

"With an already established brand, you can bring in an Adam Sandler movie and Scorpion King, which doesn't require a lot of money to establish that brand," Ganeless said. "But everybody has that and eventually they go to another network, so it's a commodity. It's not more important than original, but you need them both because they serve different purposes."

BRAND BOOSTERS

And such programming routinely draw audiences. TNT, USA and TBS continue to remain among the top-rated networks both in terms of households and key audience categories, despite a preponderance of purchased programming.

But not just any programming will build an audience. Siegel said it's important that acquired shows reflect the network's brand.

TNT's acquisitions of such highly rated off-network series as NYPD Blue, The X-Files, ER
and Judging Amy
have helped build the network's "drama" programming niche, Siegel said.

The recent acquisitions of Home Improvement, Seinfeld, Everybody Loves Raymond, Friends
and The Drew Carey Show
are also helping to establish an identity for TBS Superstation.

"The key to both of these networks is its not just offering acquired programming to fill the schedule out. It's the best that you can buy," Siegel said. "Our investments are in the best series that we can buy and ones that we know that are going to deliver to our audiences, not because we have to fill some shelf space."

But the rising cost of such programming has some operators concerned. While most are content with the amount of acquired programming on cable networks, there is concern about the prices networks have paid for those shows.

"Acquired programming is fine to the extent that the cost of that programming doesn't force networks to turn around and ask for substantially higher rates, which we're beginning to see, particularly with sports acquisitions," said an official at one top-10 operator who declined to be identified. "If the trend continues, then we will have to re-evaluate whether such acquisitions are brining enough additional value to the network to justify the costs."

REPURPOSING CONCERNS

Another operator also expressed concerns about an increase in repurposed programming being carried by the cable networks from the broadcast networks. In recent months, TNT, E!, USA Network, FX and Comedy Central have slated episodes of shows just days after they appeared on a broadcast network.

"I don't see the value of cable being a repository for repeats of network aired shows," said the operator. "It devalues cable."

But USA's Ganeless defended repurposing's role in providing additional chances for viewers to see popular programs.

"Cable has always been a place where you have a number of opportunities to see the same show as on the networks, and there's a lot of great shows out there that viewers want to see if they don't catch it in their original run," Ganeless said.

"I think cable provides a service in giving them a quality show like that, and I think it's additional value in a different time period" than the premiere episode on broadcast TV.

Other network executives argue that ultimately, original programming will best define a network's brand.

While Discovery launched nearly two decades ago by offering acquired documentary programming, it realized early on that it would have to develop it's own original shows to differentiate itself from PBS, which offered similar programming.

"In order to establish yourself in the marketplace we felt that original programming speaks more toward your aspirations," Discovery Networks executive vice president and general manager Clark Bunting said. "It defines who you are, what you are and how you want to go."

TNN, which since its 2000 relaunch has relied on well-established, acquired franchises — like World Wrestling Entertainment Inc. and Star Trek: The Next Generation— also believes originals will help establish its new brand.

The network has plans to launch several primetime animated series next season as part of its plan to significantly add original fare.

"TNN is taking a page from the MTV Networks book by betting on the originals, and from Nickelodeon by launching animated series to break through the clutter," Scannell said. "We're not going down the route of one-shots, but much more in the heritage of like an MTV Networks, where they've bet more heavily on series."

Despite its heavy acquired programming load, USA is also planning to launch several new series in an effort to better hone its identity. Dead Zone
and Monk
are just two of several home-grown series the network hopes to launch over the next few years.

While not significantly curtailing its acquired product, Ganeless said the network is hoping to establish several hit series.

If you look at HBO, they have one or two big original series airing at a time that helps build their image," Ganeless said. ' 'Similarly, we'd love to have a number of great quality, highly rated original programs on our network."

NO SET FORMULA

So what's the best mix of original and acquired series? Most executives agree it depends on each individual network's goals.

"I don't think there's a science to it, or an exact ratio of acquired to original shows for every network," said Ganeless.

"You can look at somebody like Nick at Nite or TV Land which has built their brand on acquisitions, or on the opposite end a Court TV, which originally built their brand on acquired programming but is gaining recognition for its original shows.

"I think you have to look at everything on a case-by-case basis," she said.

Turner's Siegel adds: "It is a ratings formula and an economics formula. It's whatever you need to do to generated the highest ratings and the highest return on your investment.

"The key is to deliver the program schedule that defines your network and is true to your position. If you're the Food Network or HGTV or Discovery, you're promise is mainly original programming — that's what people expect for you."

Warner Bros. Domestic Cable Distribution president Eric Frankel said a robust combination of good acquired programs and originals are what seems to work best in today's crowded television environment.

"There are a lot of successful cable networks that are all original, there's a lot of cable networks that are all news or sports, Frankel said.

"Even when we talk about a cable network being 95 percent acquired, that means it's still 5 percent original. There's no right or wrong."

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