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At NAB: The Brave New Business Models for Television Content

Television has come up with interesting new business models that in many ways mirror those that have been driving international film financing for years

Don’t ask me what the annual convention for the National Association of Broadcasters is about. Pretty much all I can tell you is it’s miles upon miles of walking through Las Vegas hallways in a frigid, fluorescent-lit convention center (watch out for the smokers).

But I can tell you that television has come up with interesting new business models that in many ways mirror those that have been driving international film financing for years.

I moderated a panel discussion on Monday with four leading television producers and distributors: John Morayniss, the CEO of Entertainment One Television; Caroline Kusser, North American director of SevenOne International, which is owned by the European broadcasting giant ProSiebenSat; Jim Packer, President Worldwide Television & Digital for Lionsgate; and John Pollak, the president of Electus International.

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All of these producers are building new businesses in the cracks where the towers of traditional television studios and networks have buckled. These are companies that are making shows without pilots.

Gone are the days when Warner Bros. Television and Fox Studios had a near-monopoly on television production. They are pre-financing with international companies and then filling in the gap with U.S. broadcasters – instead of the other way around.

Each of these executives brought examples of shows they are producing and distributing in new ways. Kusser is co-producing “Lilyhammer,” the Netflix show starring Steve Van Zandt as a mobster in the witness protection program in Norway. That show began as a pitch from a Norwegian producer, and only required partial financing from Netflix, which debuted all eight episodes at once earlier this year. (No real sense on how well the show has worked.)

Kusser’s SevenOne also created “Off Their Rocker” with Betty White, which actually began as a Belgian show made in Belgium for Belgians, and has now been licensed as a format in 30 different countries. Only ours has Betty White, which airs on NBC.

The fees from the lucrative international distribution market allows these companies to charge U.S. broadcasters lower licensing fees. And that in turn allows them to demand 13-episode commitments, in some cases without producing the pilot.

That’s what Morayniss, who runs the Canadian-based E1 television business, did with “The Firm.” NBC made a 22-episode commitment. That’s a huge boon for a TV producer.

But it could have a down side too. If the show doesn’t perform – and “The Firm” is not doing so well in the ratings – the network may feel skeptical of making that multi-show commitment again.

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Now Ben Silverman’s Electus pioneers “Fashion Star,” which ingeniously marries entertainment with commerce by allowing viewers to buy the fashion designs that are chosen by judges and department store buyers – the next day.

In its next season, Pollack said, the show will take into account international retailers, since right now the only global retailer is H&M, which is undoubtedly cleaning up. Saks, another retailer on the show with no global presence, is reaping a huge online windfall, he said.  

Packer, who is riding high on the success of “Hunger Games,” said he did not know of plans for a “Hunger Games” television show (well, why not?). But he said Lionsgate is actively exploring the synergies that might emerge from the phenomenal success of the movie franchise.

“Anger Management,” a television show that is planned for June broadcast on FX, is one example of this new kind of model. The intellectual property belonged to Joe Roth’s Revolution Studios, which made the film with Adam Sandler. Lionsgate, the producer, owns a piece, as does Charlie Sheen.

Packer said this model was winning. (Just kidding.) He did really say, though, that Charlie Sheen seemed to have no stigma to international buyers.  

All this is good for the creative industry. And a sign that the traditional behemoths of television production need to keep an eye over their shoulder.