Wednesday, January 23, 2008

The Major Housecleaning at the Conglomerates

If you haven't been closely following the news related to the writers strike, you probably aren't aware of the networks cleaning house - scrubbing commitments to scripted programming.

Beginning with ABC Studios on January 11, the five major TV studios terminated about 70 deals under the force majeure provisions in its producers' contracts. These cases include "producer" contracts, some of which were opportunistic in that there were already disputes between the producer and the studio. See the Hollywood Reporter's "ABC Studios terminates nearly overall deals" and "Black Monday at TV studios" .

In the past few days, the studios started terminating scripted projects beginning last Friday with CBS releasing 20 projects. Tuesday it was reported that Fox dropped over 20 scripts and the CW about a dozen, with ABC said to be close to making a similar move.

All these announcements come with statements indicating that the strike caused these terminations, except Fox gave what I consider to be a more honest statement: "In the current environment, we've been forced to take a hard look at our needs for the upcoming season, and as a result we're going to target a more focused range of projects."

As I have noted before, in my opinion the AMPTP never had any intention of settling with the writers and was not bargaining in good faith because of the changes in the distribution environment surrounding scripted programming. I expected broadcast tv to degenerate into mostly news, sports, and reality/game show programming, but I frankly didn't expect it to happen so rapidly. It appears the conglomerates were more prepared to adapt to change than I anticipated and they are using the strike as an excuse to rid themselves of commitments inconsistent with the current economic reality.

Instead of the slow, painful transition from radio to TV that occurred between 1948 and 1958, it appears the conglomerates are cutting out the vestigial organs of scripted TV body in a headlong attempt to adapt. If you like scripted programming, you should start preparing to access, the Fox/NBCU joint venture to stream programming on the web.

To repeat what I noted in November in Why Broadcast TV Can’t Use Scripted Programming, Jeff Zucker, CEO of NBC-Universal, said: "We don't want to replace the dollars we were making in the analog world with pennies on the digital side."

Zucker noted that had 50 million video streams in October, 50% higher than the previous record, in May. "It's become a small cable channel in our universe," he said. Of the Hulu venture he said it was a "superstore" while was a "specialty shop." He indicated that the digital issue is the biggest nightmare in his job. "Nobody has figured out the economic model yet. And if we don't figure it out soon, those dollars will turn to pennies."

Regarding the writers strike he said: "It will be a real watershed event, [and we'll see] whether [viewers will] come back to scripted programming," he said. "An event like this will happen at everyone's peril."

NBC has been mum so far on its plans to weed out its commitments.

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