Fox, Warner Sibs Sizzle in Cable Realm -…

11/1/2010 Fox, Warner sibs sizzle in cable realm -…

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Posted: Sat., Oct. 30, 2010, 4:00am PT Fox, Warner sibs sizzle in cable realm

Lower budgets bring big innovation, opportunities

By CYNTHIA LITTLETON

The laments are often heard among TV execs: Primetime series production needs to be reinvented. Pilot season is an anachronism. The business model is broken.

But while few people were paying attention, the superpowers of primetime TV production, Warner Bros. and 20th Century Fox, forged an alternate path.

Amid a growing demand for lower-budget series programming, Fox and WB presciently established subsidiary divisions -- Fox Television Studios, Fox 21 and Warner Horizon Television -- geared to producing on the tighter budgets, year-round development cycle and shorter episode orders demanded by basic cable outlets.

"The Shield," the FX drama that put Fox TV Studios on the map after its 2002 debut, is the prototype for the kind of cost-conscious and creatively daring series that are thriving in cable. Since then, the sibling units of 20th Century Fox TV and Warner Bros. TV have come on strong with notable hits -- USA's "Burn Notice," FX's "Sons of Anarchy" and TNT's "Rizzoli and Isles" -- and are generating a volume greater than their respective studio toppers originally envisioned.

They've done it using a 21st century business model that turns tradition on its ear, primarily by relying on international licensing and homevid sales to put a show in the black, rather than a big-bucks syndication sale. The growth spurt has made the sibling divisions a strong complement to their mothership studios. They are not the only players in the cable game -- Sony Pictures TV has aggressively pursued the cable biz, and ABC Studios and Universal Cable Prods. produce for their cable siblings -- but the swift expansion of the Fox and WB sibling units have further extended the reach and influence of the dominant forces in scripted television.

"We've found that with discipline and creativity and being committed to quality -- but quality at a budget -- you could create a viable business with shows that by design were intended for smaller but extremely passionate www.variety.com/index.asp?layout=pri… 1/5 11/1/2010 Fox, Warner sibs sizzle in cable realm -… audiences," says 20th Century Fox TV chairman Gary Newman.

Fox's and WB's sibling divisions have been well positioned to ride the cable train -- and their ability to finance and produce shows has helped fuel cable's appetite for original programming. There's a limit to how much even the most well-heeled cable nets, like USA or TNT, can fund on their own. The ability for Fox TV Studios, Fox 21 and Warner Horizon to absorb some of the risk that comes with a new show has encouraged cablers to order still more programs.

With a made-for-cable series (with the exception of some HBO skeins), studios can't count on a robust market for off-net rights, because the top cablers

remain wary of buying reruns of shows closely associated with rival channels.

Syndie revenue generated by a show like Fox TV Studios' "Burn Notice," which is headed for weekend runs on broadcast stations in 2012, is a welcome windfall but not the endgame.

That makes for a very different mindset at the studio on cable shows and among creatives.

From showrunners to actors to set decorators, execs say, there has to be an understanding that everyone will earn less than the norm for a broadcast show. Casts are generally smaller, shooting skeds are tighter -- seven days per episode rather than the eight-day norm for broadcast -- and there's usually less-extensive location work and guest star involvement. Episode orders are usually 10-13 rather than broadcast's 22-24, which allows shows to function with smaller production staffs.

The potential upside for the studio isn't as big as in broadcast TV, but neither is the risk. And where there's less risk, there's usually more creative freedom.

"What you gain is an ability to tell stories in a more adventurous way. What you're losing is some of the financial largesse," says Fox TV Studios prexy David Madden. "It's similar to what happens in the feature world, where the general rule is the more money you get, the less freedom you have."

A generation of creatives schooled in the art of doing more with less has blossomed. "The Shield" creator-exec producer Shawn Ryan has moved freely among cable and broadcast projects since he became an in-demand showrunner. He's now exec producing the FX drama "Terriers" through Fox 21 as well as the upcoming Fox net cop show "Ride-Along" through 20th Century Fox TV.

In 2002, the production budget for the first season of 'The Shield' was $1.3 million per episode -- barely half the cost of a typical broadcast drama series. Budgets for hourlong cable skeins have climbed since then, but not much. The broad range is $1.6 million-$2.2 million an episode, depending on the needs of the project and, of course, the license fee. On the high end, that works out to about two-thirds of the budget for a typical broadcast TV drama.

"I was lucky that I was so inexperienced when 'The Shield' began. I didn't know how cheaply and unconventionally we were doing it," says Ryan. "We just found a way to make it work for us. For the next couple of years, we were inundated with calls from producers and studios asking how we did it. It seems that model has really taken off for Fox TV Studios."

International licensing is key to making a studio whole -- or nearly whole -- on its outlays for a cable skein. www.variety.com/index.asp?layout=pri… 2/5 11/1/2010 Fox, Warner sibs sizzle in cable realm -… That's why there's such an emphasis on dramas, which tend to travel better that comedies. The potential for homevid revenue is banked on to cover any remaining gaps, taking into account that a cable show is not going to sell DVDs at the same volume as a mainstream hit a la "Glee" or "24."

For execs, it's crucial that the potential for cable shows be evaluated on a realistic basis. Every new show is a gamble, but six-figure deficits on every episode are not an option in the scripted cable biz.

"If based on (international and homevid) revenue sources, you don't have a show you feel can be profitable, I'm not sure there's much of a reason to produce that series," Newman says. "If you're hoping for the 100-episode syndication sale, that means a seven-year series (in cable), and you're really rolling the dice. That's just not a sensible approach."

Fox TV Studios pulled the plug last year on "Saving Grace," the Holly Hunter starrer it produced for TNT, after three seasons, even though the cabler wanted more, because the international and homevid revenue just wasn't adding up.

Fox TV Studios (FTVS) was established, at the behest of then-News Corp. prexy Peter Chernin, in the late 1990s primarily to serve as an umbrella administrative unit to house production pods that had been set up on the Fox lot to operate autonomously of 20th Century Fox TV. Those initial pods included Greenblatt Janollari Studio and Arnon Milchan's Regency TV.

But after the success of "The Shield," the shingle's focus shifted to developing projects directly through the FTVS banner. FTVS operated independently of 20th Century Fox TV until last year, when the reorg of the studio, following Chernin's departure, put oversight of FTVS under 20th TV chairman Newman and Dana Walden. But by all accounts, FTVS still operates autonomously.

Fox 21 was established in 2004 as a development pod within the 20th Century Fox TV structure for lower-cost projects. Among its first productions was the CW reality series "Beauty and the Geek." With the boom in cable, the focus has been much more on the scripted side, where Fox 21's biggest score to date has been FX's "Sons of Anarchy." This year it launched the offbeat gumshoe drama "Terriers" for FX and has a high-profile conspiracy thriller drama in the works at Showtime with "24" alum Howard Gordon.

Warner Horizon bowed as a unit of Warner Bros. TV in 2006. It was born out of WBTV's success with its occasional forays into cable production with FX's "Nip/Tuck" and TNT's "The Closer." Both of those shows hailed from exec producers Greer Shephard and Michael Robin, who set an innovative template, through unusual lensing techniques and creative discipline, for producing high-end fare with modest means.

"Closer's" out-of-the-box success crystallized for WB management the opportunities to be mined from a unit set up to work within cable's parameters and year-round development timetable. Warner Horizon, which is overseen by WBTV prexy Peter Roth and Warner Horizon exec veep Craig Erwich, also fields unscripted series, including the long-running "Bachelor" and "Bachelorette" franchises, ABC's "True Beauty" and NBC's fall newbie "School Pride."

Warner Horizon had a big summer this year, delivering hits for TNT and ABC Family with "Rizzoli and Isles" and "Pretty Little Liars," respectively, and a solid start for TNT's Jason Lee starrer "Memphis Beat."

Kate Juergens, exec veep of original programming and development for ABC Family, praises Warner Horizon as being adept at bringing the channel projects tailor-made for its femme-skewing younger aud. www.variety.com/index.asp?layout=pri… 3/5 11/1/2010 Fox, Warner sibs sizzle in cable realm -…

"We always have our millennial viewers in mind, and Warner Horizon understands that," Juergens says. "They are an extremely collaborative group, and with 'Pretty Little Liars,' they have been tremendous production partners in helping us build a brand-defining show for the network."

In selling to cable, the importance of targeting the right project to the right outlet cannot be overstated, FTVS' Madden says.

"The fun part is you're working with cable networks that all have such specific identities. A USA show is nothing like an FX show and nothing like an A&E show," Madden says. "We like having our writers think about a lot of different ideas because there are so many places you can go."

The rise of the sibling players has helped make the primetime cable programming marketplace more like that of the broadcast nets, where they enjoy the flexibility to draw material from multiple suppliers. And the sibling units often have the benefit of drawing on the resources of the larger studio.

For example, when Fox TV Studios was looking to cast the lead in its A&E crime procedural "The Glades," 20th suggested Aussie thesp Matt Passmore, who already had a holding deal with the studio. "Glades" wrapped its first season in October with strong ratings for A&E and a lot of pop culture buzz about its hunky star. Twentieth also loaned writer-producer Warren Leight to its sibling studio when Fox TV Studios was hunting for a showrunner to take the reins of the upcoming FX boxing drama "Lights Out."

Having multiple units in the series selling game worked to the Fox studio's benefit earlier this year when "Breakout Kings," a 20th Century Fox TV pilot that was passed on by the Fox network in May, was quickly rerouted to Fox 21 and sold to A&E. The action-drama from the team behind Fox's "Prison Break" will bow on the cabler next year. The shift to Fox 21 necessitated a downsizing of the budget, but after going through the long march of pilot season -- on a project that had been tipped as a sure thing to land on Fox's sked -- the "Kings" creative team was more than primed to make it happen.

"?'Breakout Kings' was a good example of how 20th Century Fox TV and Fox 21 operate differently but in a collaborative way," says Bert Salke, the showrunner who was recruited to head Fox 21 as prexy in July. "We have the good luck at times of being able to play with network material."

The cross traffic among scribes working in both realms has increased markedly in the past few years.

"One of the interesting things we see at this time of year is that writers will make two script deals. One is a broadcast deal, but then they'll do a second-position deal for a cable project that is the thing they feel they can stretch out on," says FTVS' Madden. "They may take 70% of their regular (fee) but they're getting to do something that they wouldn't be able to sell to a broadcast network."

Speaking from his own experience in the development trenches, Salke echoes Madden's point. Fox's unfortunate experience with "Lone Star," a cable-ish dark drama that was KO'd after two little-watched episodes, has only reinforced the view in the creative community that cable is where the creative action is.

"In the world I come from, the stuff that all of my showrunner, writer and producer friends want to do in their hearts is the kind of shows that people are doing on cable," Salke says, citing "Breaking Bad," "Dexter," "Sons of Anarchy" and "Mad Men" as examples. "I think the modern studio has to pay heed to that and give its producers the broadest possibility of outlets for their work." www.variety.com/index.asp?layout=pri… 4/5 11/1/2010 Fox, Warner sibs sizzle in cable realm -…

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