Fox Chief on the TV Industry: 'We Have Our Head Up Our Ass'

Kevin Reilly Headshot - P 2012

Kevin Reilly Headshot - P 2012

At the HRTS newsmaker luncheon, Kevin Reilly says network executives have not fully realized the impact of the DVR and that he is considering a year-round development process. Fox "will do other things when we get to the upfront this year," he said.

The behavior of television viewers is changing, but the industry is not changing with them fast enough or in the right ways. That was the consensus of panelists at the HRTS newsmaker luncheon Wednesday in Century City.

“A lot of us -- the way we conduct ourselves -- we have our head up our ass,” said Kevin Reilly, chairman of entertainment at Fox Broadcasting Co., during the panel, which was titled "The State of Broadcast."

STORY: Fox Chief Compares Angus T. Jones' Comments to Nicki Minaj's Latest 'Idol' Feud

Reilly said the industry has not gotten its arms around the impact of the DVR or the need to consider how viewers embrace and engage with a show, as well as how it rates. He added that a lot of people who make TV don’t actually watch it the way real people watch it. Habits are changing in the age of the DVR, Netflix and Hulu, he said.

“As an industry, when you’re in the talent business, we are way too obsessed on the competition with each other and not enough with the consumer,” said Reilly. “The consumer has spoken loudly and clearly, and the genie is not going back in the bottle.”

He argued that TV needs to adapt to these changes -- from the way shows are created to when they air. For instance, launching most shows all at once in the fall means many shows fail because they don’t get sampled. Reilly said he is convinced that if Glee had launched in the fall, it would have been canceled quickly.

“The one-size-fits-all nature of the business for the most part worked well for 50 years, but now there is an evolution,” said Reilly. “This is what I mean when I say our heads are up our ass. … I see us in the industry buying cut-rate fare because [we think] people want to watch cut-rate fare in summer. That’s not true.“

Reilly said he has been talking for a long time about doing development and launching shows throughout the year. He said Fox will “do other things when we get to the upfront this year. … It’s not blowing up the business, but I think we have to do some things better.”

Peter Benedek, co-founder of the UTA talent agency, agreed and said the creative people he works with feel “there is nothing worse than making pilots.” Comparing it to the way the British create shows, he said writers and producers should be able to develop multiple hours of a show and in some cases make “10 hours off a read.” That would better represent the talent and the project, he contended.

PHOTOS: Broadcast TV's Returning Shows for 2012-13 Season

Reilly disagreed, arguing that pilots do have a purpose. “What you discover is problems coming out in episode four that should have been fixed in the pilot,” added Reilly.

Katherine Pope, president of television at Chernin Entertainment, said: “We are addicted to the ratings. ... We say it means nothing but it still does. ... It's not just the DVR, it’s all the other platforms and how people are consuming content. … We haven’t shifted our definition of success from the overnight ratings, and I think that’s a huge problem across the board."

Ken Ziffren, partner in the law firm Ziffren Brittenham, said the DVR is “transitional” and the real question becomes: How “are we going to monetize [programming] five to seven years from now when advertising isn’t gong to be counted by eyeballs? It’s going to be counted by engagement.”

Ziffren predicted that, in each home, “a little camera will know what you watch … [and] will then feed you commercials that fit you, so each person watching the same show gets different commercials.” He also predicted that the business will not only stay afloat but “will actually be helped by the technology.”

Reilly said that the networks make poor choices at times because they get caught up in the heat of a bidding war for talent, a script or a concept.

“Once you get into the mayhem of a bidding war and the insanity of a market, I think that compromises product,” he said.

Pope complained about the “falseness of the upfront and the fall launch that bites you in the ass every time” because it forces the producers to rush to finish in time to make an airdate.

PHOTOS: The 100 Fresh Faces of Fall TV

Reilly said that “there is power in any industry” when it has a marketplace but doesn’t believe you need to have the entire schedule locked before that presentation in May.

Ziffren agreed that the upfront process might be outdated but said advertisers still have the right to see a show before they agree to put their ads on it.

Pope said as much as she doesn’t like the upfront, the reality is that unless a network agrees to air a show right away, there is always fear it might never get on. “Unless you are standing up on that stage and seeing it, you wonder if you are going to toil away for a year and then it is not going to be on the air," she said. "So you say, 'Put it on the air tomorrow.' ”

Asked by panel moderator Lacey Rose, senior TV writer at The Hollywood Reporter, about all the singing and competition shows on the air, Reilly said it has impacted the ratings for American Idol -- and that he isn’t happy about it. He said he personally doesn’t like The Voice, which airs on NBC.

Nor does Reilly think judges ultimately are worth the millions they are paid in terms of ratings. “Judges are not at the core of why shows work,” he said, “but it does create conversations and some expectations. You have to do it. Now it’s competitive, and we’re not the only game in town. So we're paying more for the talent at a time the ratings are going down."