Mixed signals

Facing increasing competition from cable, the Internet and the new-media sector, a nervous syndication industry faces an uncertain future.

Roaming the exhibition floor and suites of NATPE's annual Conference & Exhibition in recent years, attendees were all too likely to find themselves having a face-to-face encounter with such high-profile names as Tyra Banks, Tony Danza, Megan Mullally, Jane Pauley and Rachael Ray, all of whom were touting their upcoming talk shows.

But this year's confab looks to be a bit different. Sure, the cast of such shows as NBC's "My Name Is Earl" and "Heroes," CBS' "How I Met Your Mother" and Fox's "Bones" will be there to represent their series in the upcoming off-network arena, but as far as big-name talent talking up new first-run programming, that's something that the syndicators have shied away from in the recent development season.

"If this were 10 years ago, (the syndicators) would all be willing to take a roll of the dice -- 'We'll go out there and get the show on and ultimately make money,'" one industry veteran says. "Now, almost all of the (syndicators) are part of huge conglomerates who focus on, 'When are we going to make money, what's the rate of return?' If there's no immediate rate of return, they're not going to do it because that's what they're going to be judged by. There's much less risk-taking."

Indeed, after striking out with pricier talk shows featuring high-profile names that didn't connect with viewers, the syndicators this year have turned their development focus toward less-expensive product. Add in the fact that viewers have more and more ways of getting content, and syndication is as tricky a business as ever.

"The normal change in economics and the dilution in the marketplace is creating an impact on syndication," says Bob Cook, president and chief operating officer of Twentieth Television. "We now have more cable outlets and more people going to gaming, the Internet and mobile for entertainment, whereas it always used to be just broadcast television. Now, all of those platforms little by little are taking a toll on traditional broadcast, particularly during the day."

Adds another industry expert: "Everyone wants growth, and they're wondering where the future of television is going, but no one is certain. The business is under enormous pressure to show growth, to cut as much expense as they can and drive revenue, but it's difficult because of all the (emerging platforms) coming along."

Those are some of the issues that will surely be addressed on the floor and in the suites at NATPE's 2007 conference, taking place in Las Vegas Tuesday-Thursday at the Mandalay Bay Resort & Casino. (The Mobile ++ digital media confab will take place today.)

"What everybody talks to us about is how best to present their material: What are the best ways to monetize content and protect rights; what is the business going to look like in three, four, five years down the road," says Rick Feldman, president and CEO of NATPE, pointing to this year's theme, "Evolve & Prosper."

The industry's new focus on more cost-effective programming has led to the resurgence of a few tried-and-true genres, as well as a reliance on lower-profile talent.

The most notable beneficiary of the shift is the game show genre, which hasn't seen a new show launch since 2002. King World Prods. and Sony Pictures Television ignited the trend with their announcement in April that they were developing two new game shows with Harry Friedman, executive producer of the companies' "Wheel of Fortune" and "Jeopardy!" Among those in the works come fall, NBC Universal Domestic Television Distribution is developing a stripped version of NBC's hit "Deal or No Deal," and Twentieth is working on an updated version of "Catch Phrase" and is planning to sell FremantleMedia North America's "Temptation" at NATPE as well.

John Nogawski, president and chief operating officer of CBS Television Distribution, which combined CBS Paramount Domestic Television and King World under one management in September, says the resurgence of game shows on the broadcast networks' primetime schedules -- like "Deal" -- spurred syndication's renewed interest in the genre.

"Also, there's the least amount of clutter in that genre," he says. "Those two rationales, I think, have aligned themselves and raised the interest level."

Another genre that's getting a boost is court. In fact, the first show to get a station-clearance announcement for 2007-08 was SPT's gaveler "Judge David Young," which came only last month. "When we looked at what to develop for next season, (the court genre) was giving stations the most success in first-run," says John Weiser, president of distribution at SPT, which also handles two of the nine court strips currently on the air. "It's time-period flexible, and advertisers like buying and viewers like watching. Right now, there is an appetite for court, and it's still growing."

Weiser also points out that court shows have "more manageable" budgets than talkers -- a sentiment seconded by Twentieth's Cook, whose company distributes three gavelers. "Creating a balance between the ratings that you can generate in daytime versus the costs to produce the shows is a central issue for all studios," he says. "We're able to generate an audience with court and are able to produce them on a budget that allows us to make a profit."

And it seems that the distributors weren't willing to gamble on name talent in developing projects for the 2007-08 season. While talk shows themselves were not absent from the development cycle, none involved high-profile names. "People are learning that big-name talent for talk shows doesn't necessarily work," another industry executive says. "You don't see that at all for next year. A great actor doesn't necessarily know how to host a show. The reality is that a name might get tune-in curiosity, but it doesn't necessarily get (viewers) to stay."

Since the syndicators run the risk of losing as much as $10 million with daytime talkers in their first year, a gamble on name talent becomes far less attractive. That, combined with the effects of vertical integration, means distributors will probably continue to develop programming for the station group under the same corporate umbrella.

"Why would you want to deficit-finance a show that will run on your competition?" one expert asks. But that remains a challenge for such major distributors as SPT and Warner Bros. Domestic Television Distribution, which are not aligned with a major station group.

However, executives at those companies say that opens up unique opportunities as well.

"I like our position quite a bit," SPT's Weiser says. "Being independent helps us attract the best talent because we do get to take our talent out to every single station group. It's maximizing the value in giving us the opportunity to choose the environment in which the show will run. We see the glass as completely full."

WBDTD president Ken Werner adds that his company's goal is to be "the program supplier to everyone." "We want to partner with as many television groups and stations as possible to supply them with an expansive palate of programming," he says. "We are experiencing a challenging time in which the TV stations and program suppliers need to work together to create a business model that delivers to stations compelling content and superior marketing so these shows are promoted and marketed correctly and in return does not put the program supplier unreasonably at risk."

Many experts say the station groups, several of which declined comment or were unavailable for comment, would be wise to buy programming from a variety of distributors, and not just those under the corporate umbrella.

One syndication veteran who agrees is Byron Allen, chairman and CEO of independent distributor Entertainment Studios, which distributes 15 shows, including the rookie "Comics Unleashed."

"The great thing about being independent is traditionally that's where the breakthrough hits come from," Allen says, pointing out as an example that King World launched such top-rated, long-running shows as "The Oprah Winfrey Show" and "Wheel of Fortune" when it was an independent. "We consistently have to do something different than everybody else to stand out, and when you do something different, that's when you break out.""

And in today's challenging marketplace, the stations must weigh their options in terms of trying something new or sticking with a show that's already on the air, even though it might not be drawing the ratings they want, says Bill Carroll, vp and director of programming at station-rep firm Katz Television Group. "It's difficult to introduce a new show -- there are exceptions to the rule, but, for the most part, shows take a while to find an audience," he says.

Moreover, Carroll adds that the chances of a new show succeeding in a time period where several others already have failed are slim.

Faced with their own set of challenges, the boutique distributors are looking to fill time slots with cost-effective and alternative programming by taking advantage of unique opportunities.

"From our point of view, the industry is in tremendous transition and will continue to be for the foreseeable future," says Josh Raphaelson of Program Partners, which distributes such Canadian procedurals as "Da Vinci's Inquest" in the U.S. "For us, that creates opportunity; we just have to be creative in what we offer and how we offer it." Raphaelson, who founded the company with Ritch Colbert, notes the declining number of off-net half-hours available as well as the "natural, eventual deterioration of long-term franchises."

Both factors will play a role in helping his company successfully launch "Degrassi: The Next Generation" (off cable network the N) in the fall, he says. Program Partners is selling the show as a strip but has struck some deals with stations for "vertically stacked" weekend runs to help launch the show.

Another company that has taken advantage of the lack of new off-net sitcoms is Debmar-Mercury, run by co-presidents Mort Marcus and Ira Bernstein. The company, which was purchased by Lionsgate over the summer and operates as a wholly owned subsidiary, is readying 100 episodes of Tyler Perry's first-run comedy "House of Payne," launching on TBS in June and in broadcast syndication in fall 2008.

"Tyler is truly one of a kind," Bernstein says. "He had the ability to create the show, the courage to fund it and the ability to fund it -- it's an awesome hat trick."

Adds Marcus: "Most guys don't operate on all of those levels. They might be talented creatively, but they're not writing their own checks."

The duo reports that Debmar-Mercury is looking to do more first-run sitcoms and is already working on a spinoff of "Payne."

Trifecta Entertainment & Media, which was formed in 2005, also is looking to bring something unique to the marketplace in its first time selling at NATPE. Among its offerings will be such product as "UFC Wired," a weekly series of mixed martial-arts programming from the Ultimate Fighting Championship organization.

"While there are certain projects that don't make a great deal of economic sense for major studios, these same shows can definitely find their place in the market and do make a lot of sense for a smaller company like Trifecta," says Hank Cohen, the former MGM Television executive who serves as Trifecta's partner and CEO.

But no matter the size of the company, Cohen points out that all distributors face the same challenges in today's marketplace. "The challenges are obviously the same as for everybody -- the availability of time periods and ability to reach as wide of an audience as you can," he says. "But content is king, and eventually, the best shows will find an audience, no matter how tough it is when you first start."