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Cable: A Temporary Key Player In The Syndication Game

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By Valerie Milano

Los Angeles, CA (The Hollywood Times) January 2006 – The “new” or resurgent NATPE has now evolved into an international market, which not only offers original (first-run) and off-net programming to domestic U.S. TV networks affiliates, but also to cable/satellite channels, and to international buyers who come for traditional TV rights, home video and new technologies. NATPE co-chair Stephen Davis observed that, “The cross-pollination of programming between the U.S. and Europe has never been healthier.”

Stephen J Davis
Stephen J. Davis with NATPE’s Rick Feldman and Sony Pictures Television’s John Weiser

Since the conference has embraced new technologies and distribution platforms, it has also become a showcase for what can now be termed “television digital media.”

But the relationship between the U.S. TV networks and their affiliate stations are changing so drastically that a new emerging market could develop to provide content to station groups to replace networks’ feeds.

Indeed, another reason for NATPE’s resurgence is its increased cable presence. The major cable players — such as TNT, A&E and USA — pay top dollar for scripted hours — Law & Order, CSI, Without a Trace –which have proven to be workhorses that complement these nets’ original dramas. Cable has also become the top buyer for theatricals, prompting Fox Network Group CEO Tony Vinciquerra to observe, “Much of the syndication business is with cable, not broadcast, TV.”

According to the National Cable & Telecommunications Association (NCTA), there are some 400 cable networks on air in the United States. Many of these networks have taken advantage of distribution deals, which allow cable channels to pick up secondary broadcast rights to a network program after the program has been syndicated to station groups. The distributor benefits from the additional revenue and the cable channels benefit by being able to afford programming which otherwise, as an exclusive first-run, may have been too expensive to buy.

Of course, the station groups have grumbled about this practice out of fear that they will lose even more viewers to cable than they already have. But with production costs on the rise, it has become a fact of syndication life.

Lisa Gersh Hall, COO of Oxygen Media, admitted the growth of cable has meant more competition between individual cable networks to secure hit shows on syndication and to create their own original programming: “We’ve always looked at independence as an advantage. It’s allowed us enormous flexibility in different types of strategies, and it also gives us a great amount of creative freedom.”

At NATPE, in addition to expanding their presence as buyers, cable networks are also becoming sellers by selling their original programming for syndication here and abroad.

“As cable programmers continue to invest in original programming (and the growing number of personal video recorders make original programming more of a necessity), the kinds of revenues from licensee fees will rise,” Hall said. “Programmers will create content that can thrive across multiple platforms,” including VoD and broadband.

Thanks to digital cable, even niche cable channels are becoming more readily available to more households. In turn, these channels are able to better attract audiences and earn higher advertising revenue, which can be spent on acquiring programming — something that has proven to be good news for NATPE.

“We are a $60 billion-a-year industry between network, cable and syndication,” noted NATPE president and CEO Rick Feldman. “More programming is being produced for more outlets now. It’s not just about domestic [U.S.] syndication, but also about all programming in all forms. Our mission statement goes to the creation, development and distribution of television programming across all platforms.”

It’s also a sign of the times that, lately, Internet companies such as Yahoo! and Google are making their presence felt and in an evolving way. In a recent interview, Rick Feldman said, “They are right now in the acquisition phase and not the exhibition-and-distribution phase. We believe that, over time that is going to change.”

To help buyers, content providers and transport operators (and everyone in between) navigate this brave new global digital world, NATPE will be offering its largest number of panel sessions in the conference’s history, including a day long symposium on mobile, a platform that many industry experts agree is the next big revenue stream for content providers of all kind.

Bruce Gersh, svp, Business Development at ABC Entertainment Group said, “We take [new technologies] very seriously and are trying to figure out a strategy as to how mobile video fits into our business model. It’s a two-step business. First, it’s a great promotional vehicle. Over the past year we see it as a phase one products – sneak peaks, interviews, recaps. At the same time, we’re trying to develop new business models where we can generate enough revenue to start producing original content for mobile. But as we look at the video product, we have to keep our eye on the audience. We need to get consumers and providers excited about the product and as time goes on, it will grow and start making an impact the way cable grew.”

Lucy Hood, president of Fox Mobile Entertainment, concurred. “We’re all trying to build an industry here and the Hollywood studios are paying a lot of attention and applying a lot of creative and business intelligence to it,” she said. “There are two billion cell phone subscribers around the world and 200 million in this country. It’s the most instantly global business we’ve ever seen.”