58 October 2013 Economy of U.S. Studios (Continued on Page 59) U.S. networks and their local affiliates to collect retrans fees from U.S. cable, satellite and telco operators and to get an additional percentage from the affiliates’ own retrans fees. The same content also generates cash from digital U.S. outlets like Amazon and Netflix. Explained Disney’s Pyne,“We have shows, like Grey’s Anatomy, that are available on iTunes as well as our ‘Hot from the US’ service 24 hours after the U.S. broadcast. Some other studios do the same depending on how the show is sold to advertisers. For example, with live plus four, AC Nielsen adds the audience on the broadcast plus video on demand for four days, after which the shows go on transactional digital platforms.” Contrary to popular belief, U.S. broadcast television not only isn’t dying, but it’s thriving. At the end of the 2012-13 primetime TV season CBS averaged 11.9 million viewers a day, ABC 7.8 million, FOX 7.1 million and NBC seven million. Moving on to the so-called “uncertain advertising market,” at the conclusion of the Upfront sales that began in mid-May, the aforementioned four U.S. broadcast networks, plus CW, received commitments from advertisers to pre-buy anywhere from around $8.7 billion to $9.15 billion worth of commercial time during the 2013-14 primetime season. The Upfronts showed that U.S. broadcast television is still a good way for advertisers to get reach and frequency and that large brands can’t do without broadcast television. AsFOXBroadcasting’s chairmanof Entertainment, Kevin Reilly explained, the recent Nielsen crossplatform report stated that television consumption is up by nearly two hours on average, to 157 hours and 32 minutes per individual per month. Onthecable, satelliteandtelcodistributionfront, according to some estimates, by 2015 retrans fees to broadcasters will increase to $4.3 billion from $2.4 billion in 2012. Perhaps the business model will change toward streaming if cable and satellite operators drop the networks in favor of original programming a la carte. After all it is expected that viewing via digital sources will increase and potentially surpass traditional distribution. As CBS Corp.’s Les Moonves pointed out, network comes from the Sony Pictures library, featuring more than 3,500 films. It is the third wholly owned Sony-branded channel in the U.S., after Sony Movie Channel and Cine Sony Television. All three channels are managed by Superna Kalle, SVP, U.S. Networks, SPT. getTV is carried on the digital subchannels of Univision Television Group-owned television stations in 24 markets that account for 44 percent of all U.S. television households, representing more than 50 million homes. Even in the highly competitive U.S. syndication business, the studios face a bright future. Indeed, for some studios, the biggest challenge is the need for more product, especially theatrical movies and TV shows. According to SPT’s John Weiser, in terms of avails, he sees a myriad of openings, since five out of six shows currently on air could have better ratings. As for time periods, Weiser sees opportunities in the 9 a.m.-2 p.m. time frame; also little product is working in access time and late night. And, as for Disney, “We have a robust first-run syndication in all day-parts,” said Pyne. Armando Nuñez, president and CEO of CBS Global Distribution Group, commented, “We are launching The Arsenio Hall Show so we clearly see an opportunity in late-night for original programming. Stations have told us they are looking for alternatives to off-network sitcoms, so that is somethingwe are taking a look at. Daytime also continues to provide opportunities for talk, court and game shows, so we focus development on that daypart as well.” At the international level, “The power of U.S. TV drama is increasingly becoming dominant worldwide,” explained Keith LeGoy, president of International Distribution at Sony Pictures Television. LeGoy sees growth in all aspects of the business: broadcast, pay-TV, subscription and digital, for several reasons, including the improved advertising market, more competition in the pay-TV and digital areas and the fact that U.S. TV series are now primetime material in major international markets. Even though around the world there are TV groups equally as powerful as the U.S. studios, none are currently in a position to match the financial and economic strength of the U.S. studios’ production. But, “in the near future,” predicted LeGoy, “major TV players like TF1 and Canal Plus will be able to commission Englishlanguage original series from U.S. studios, using the same model as the U.S. TV networks.” Conversely, Disney’s Pyne doesn’t “envision that in the near future large TV organizations outside the U.S. will commission pilots to pick series. After all, they have all new U.S. product available. However, if that opportunity arises, we’re ready,” he said. In terms of windowless international release, LeGoy said that the biggest buyers want their American content to debut as close as possible to the U.S. release date. Therefore, he foresees a closer alignment of dates worldwide. For CBS’s Nuñez, “As a result of global demand for quality content (as evidenced by borderless social media outlets and piracy), we are offering our licensees the opportunity to program our television is not dying, “it’s just changing…We don’t care where you watch the shows.” However, even in the realm of streaming, the balls are nowmoving toward the networks’ court. Recently,theU.S.broadcastTVnetworkshavewon the first legal round in court against companies that stream local stations on the Internet without their permission or compensation. As for the fact that Sony Pictures does not own a U.S. broadcast network, in the view of John Weiser, president of U.S. TV Distribution, “it provides a competitive advantage, since we sell product to all buyers and maximize revenues for our producers.” Similarly, Steve Mosko, president of Sony Pictures Television, updated an earlier report: “We do programming for 16 networks. Being Switzerland in some ways is a good thing because we can be in business with everybody. What’s attractive to producers, writers and actors is that they can come to us and know we’re going to go out and sell it to the best possible network.” However, recently Sony Pictures Television (SPT)Networks launched getTV, a newU.S. digital broadcast television network airing movies from Hollywood’s golden era. Programming primarily Ben Pyne, president of Global Distribution at Disney Media Networks, with Sophie Lowe of Once Upon a Time in Wonderland Armando Nuñez (center), president and CEO of CBS Global Distribution Group, with stars of several CBS series (Continued from Page 56)
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