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Repurposing Loses Luster

Nov 17, 2003  •  Post A Comment

Repurposing broadcast network series on cable networks hasn’t turned out to be the economic game changer many predicted it would be when those deals were at the height of popularity a few years ago.
Only two years ago, there was a flurry of wheeling and dealing between studios and networks for repurposed cable runs. The topic still comes up in negotiations, but it’s now just another deal point rather than a demand.
This season ABC’s “Karen Sisco” is the only new broadcast show to have a repurposed cable run. The Universal Network Television-owned show airs on the USA cable network nine days after its original ABC broadcast.
“For a business looking for the new formula, it was kind of being embraced as this panacea, like that was going to be the answer-repurposing,” said Kevin Reilly, president of prime-time development for NBC Entertainment. “Everybody talked about repurposing. Ultimately, you’ve got to remember repurposing is just a way of dressing up a repeat.”
Repurposing seemed to be a win-win win for broadcast networks, cable networks and studios. Broadcasters liked having a way to give a new show additional exposure and in the future bring more viewers to the original broadcast run; cable networks thought they could drive up the costs-per-thousand they charged advertisers because they now would have a broadcast-quality show on their air; and studios saw it as a way to generate additional revenue to offset production deficits.
Turns out everyone’s expectations were too high.
Studio and network executives agree that repurposing has emerged as a better marketing tool than a moneymaker. Instead of repurposing on cable, this year networks have been re-running the shows on their own networks and using marathons of the shows’ past episodes on their sister cable networks to try to increase awareness of the shows.
Fox built an audience for Warner Bros.-produced “The O.C” by airing it three times a week after it premiered to disappointing ratings. And it was Fox that approached Warner Bros. with the idea of running an “O.C.” marathon on FX right before the show was slated to return to Fox in a new Wednesday time slot. Warner Bros. liked the idea and gave FX a free run of the seven “O.C.” episodes that had already aired.
Still, Fox found repurposing isn’t a foolproof fix for struggling shows. The network wasn’t as successful repurposing its new Warner Bros. drama “Skin,” which also was aired more than once a week before it was canceled after three episodes.
The WB tries to get rights to repurpose its shows on Sunday nights from 5 p.m. to 7 p.m. in its Easy View time slot, which was begun two years ago with the goal of exposing first- and second-year shows to another audience.
“Our research shows that people aren’t watching the same episode twice in a week,” said Jed Petrick, chief operating officer of The WB. “With 102 channels in the average household today, the days of a network dictating when someone is going to come and watch their shows is over. We have to become more accommodating to the consumer, and if that means putting our shows on more than once a week in other time periods that’s what we’ll do.”
A bonus of repeating a show within the same week is, “You have less marketing messages to sell, so your marketing money can go farther,” Mr. Petrick said.
While studios see the benefit of added exposure to get new shows off the ground, they are still protective of the back-end potential of their shows.
“What we were concerned about two years ago was you didn’t want the program to become too identified with one particular cable network,” said Bruce Rosenblum, executive VP, Warner Bros. Television Group.
Cable networks are the buyers for syndicated runs of network dramas, so studios feared that a drama could become too branded to one cable network, scaring off other networks from bidding on the stripping rights.
“We’re over that hurdle now, because we’re only talking about doing this for a year or two,” Mr. Rosenblum said. “We’re looking at repurposing through a different prism. Now it’s much more of a marketing tool than an opportunity to generate incremental revenue. If we all look at it as a marketing tool, we’ll be more sanguine about it.”
The biggest reason repurposing lost its luster is because most repurposed broadcast shows didn’t do very well in the ratings on the cable outlet, and as a result most cable networks had a hard time making money from the repeat airings. “The basic cable networks were unable to raise their CPMs to a level commensurate with the broadcast networks, and were thus unable to get a better return for the license fees they were paying the producers,” Mr. Rosenblum said. “From the cable network standpoint it simply wasn’t the windfall that they had hoped, where they would increase their CPMs.”
Two or three years ago, studios were selling a repurposed show to cable networks for an average $150,000 an episode. Often, cable networks weren’t able to generate enough ad revenue to even cover the cost of the show. For example, FX paid a high-end $250,000 an episode for same-week runs of Fox drama “24.” Two years ago “24” averaged 920,000 total viewers on FX, and last year it averaged 666,000 viewers, according to Nielsen Media Research.
FX didn’t come close to recouping its cost for the show with ad revenue.
“It is really the rare show that can be repurposed once or twice a week on a cable channel that’s going to generate enough viewership to make it financially significant to anybody,” said Gary Newman, co-president of 20th Century Fox Television, which produces “24.”
Mr. Newman called the two-year repurposing deal “an insignificant piece of business from a direct economic standpoint” for FX and for the studio. However, he said, the experiment did have some benefits. Because the show is serialized, it gave viewers who missed the episode on Fox an opportunity to catch it. FX also ran “24” marathons, in which 20th was able to promote the new season and the DVD release.
The repurposing deal wasn’t renewed for a third year.
Cable operators also weren’t big fans of paying to carry cable networks that relied heavily on repeats of programming that could be found elsewhere.
“Prior to Comcast becoming the thousand-pound gorilla and prior to competition getting even tougher in the cable space, there was a feeling that you could dump stuff on cable, and the MSOs would be thrilled to keep paying more money for them,” said Mr. Reilly, who was entertainment president at FX cable network before joining NBC this fall. “They aren’t going to keep upping your subscriber fees to take leftovers from the broadcast network. That’s crystal clear.”
The huge extra revenue stream studios envisioned also never materialized. David Kissinger, president of Universal Television Productions-which still repurposes many of its shows-said, “It’s a small additional source of revenue.”
Universal currently airs same-week repeats of NBC’s “Law & Order: Criminal Intent” and “Law & Order: SVU” and ABC’s “L.A. Dragnet” and “Karen Sisco” outside of prime time.
“For us, it’s been a great success story,” Mr. Kissinger said. “Having the repurposes of the `Law & Order’ shows has only helped to raise the awareness and the appetite for that franchise.”
The three “Law & Order” series repeat well no matter where they are, so many executives point to the franchise as the exception rather than the rule. Repurposing on USA isn’t part of Universal’s boilerplate contract, but the studio does ask for it when they think the added exposure could be a help to the show.
“It’s become much easier to get networks to agree to it,” Mr. Kissinger said. “I think they’ve recognized whatever the impact on their exclusivity, it’s worth the sacrifice for the extra eyeballs that come to the show.”
In today’s environment, cable networks typically pay under $100,000 an episode to repurpose a show, sources said.
Corporate synergy hasn’t made a big difference either. Even if a studio made money on a repurposing sale to it
s sister cable network, if the cable network couldn’t make money on the show, it still hurt the company overall.
While repurposing isn’t as much a hot-button issue as it used to be, studio heads said they are still being approached by cable networks interested in repurposed runs of their shows, and that the issue still surfaces during negotiation of license fee deals for new series.
ABC, which made news two years ago when it unveiled a template that spelled out terms for repurposing its shows on cable, routinely asks for those rights in all its new deals. The Walt Disney Co., ABC’s parent, owns the cable network ABC Family, which had expected to re-air a large amount of ABC programming. ABC has a deal with its affiliates to be able to repurpose up to 25 percent of its prime-time schedule. Despite those provisions, “The Bachelor” is the only ABC show that currently has a repurposed cable run on ABC Family.
Fox and NBC don’t demand repurposing rights for themselves but will often approve deals to repurpose their shows on cable networks when they think it has benefits for them. Last season, Fox let Warner Bros. sell a repurposed run of the drama “Fastlane” to MTV, and NBC approved selling a run of “Boomtown” to TNT to air over the summer. In both cases, the networks wanted the added exposure for new shows that were struggling in the ratings.
CBS is more protective of its exclusivity, sources said, and usually won’t let a studio repurpose its shows. However, there are exceptions. Last year, CBS agreed to let Universal air its drama “Robbery Homicide Division” on USA.