Sony Sticking to Flight Plan

Apr 10, 2006  •  Post A Comment

Four and a half years ago Sony Corp. blew up its television business. Today the company is trying to reclaim some of its past glory by re-establishing itself as a provider of successful broadcast series, a goal that was last reached with the 1998 debut of “King of Queens.”

In 2001, rising costs, industry consolidation and network-dictated production deals forced Sony to rethink its broadcast business.

“This is the year all of the pieces of the puzzle are in place,” said Steve Mosko, president of Sony Pictures Television, noting that after years of rebuilding Sony has a slate of pilots that makes it as competitive with rival studios as it had been before 2001.

Adding in DVD revenues and international sales, Sony has made the beginnings of a profitable new business with off-cable series, provided it keeps deficits under control and sells series strategically.

“The huge gamble with getting involved with cable was whether or not there was a post-network run,” Mr. Mosko said. The gamble paid off, with the rising consumer interest in TV shows on DVDs

and the ability to sell the critically acclaimed and ratings-performing “Shield” to another cabler, Spike TV, as part of an off-cable syndication package that includes a barter-only broadcast weekend run that’s been sold in 100 percent of the U.S. starting this fall. Sony is bringing in an estimated $300,000 to $350,000 per episode on Spike TV, with revenues north of $30 million expected to come from the weekend syndication run next season.

But the money garnered from cable series such as “The Shield” still pale in comparison with the hundreds of millions of dollars generated from a successful broadcast hit, something that has continued to elude the company.

On the syndication side, the company generates more than $300 million annually from veterans such as “Jeopardy!,” “Wheel of Fortune” and the $3 billion-dollar franchise “Seinfeld.” After no new first-run syndie launches last season, Sony has a new court strip for the fall, plus the talk strip “The Greg Behrendt Show,” which came out of a new partnership with the Tribune-owned stations.

“That was a big change for us,” Mr. Mosko said of “Behrendt” and the way the company does its syndication business. “Since we don’t have a station group behind us, we wanted to be smart about how we approach the big-ticket shows.”

Partnership With Comast

Last year’s purchase of Metro-Goldwin-Mayer also grew Sony’s library of TV product to 45,400 episodes, among the largest in the world. While that extended library will be a plus in syndication, the company is also using it to expand its cable operations.

This week Sony is expected to announce it is partnering with cable operator Comcast to develop a multiplatform horror cable network, its first U.S.-based cable operation aside from its gaming network, GSN (See story, Page 8). The company’s daytime dramas “Days of Our Lives” and “The Young and the Restless” on CBS are also important franchises, with “Young” following “Days'” same-day repurposing on SoapNet starting later this month.

Even with success and growth in other areas, getting back into the highly profitable prime-time broadcast television business has remained a priority. The company had no network pilots in 2003. For the 2004 and 2005 network development seasons, Sony stepped back into the pool with a half-dozen pilots each year. But for 2006 the company has almost doubled its output with 10 pilots in production and two early series pickups, fielded a roster of new development deals and appointed new leadership with Zack Van Amburg and Jamie Erlicht as co-presidents of programming and production.

The downside of sharing co-productions and being untethered to a network is a current plus, Mr. Erlicht said.

“We have no agenda other than making the best television show and putting it at the best place,” he said, noting that co-productions are a good way to lessen expenses. “We don’t have to serve any network needs.”

Network Hit Needed

Sony has pilots in production for all five of the networks, a fall series pickup for the drama “Kidnapped” on NBC and nine network long-form projects on deck. For the past two seasons, however, some high-profile network series launches have been disappointments, including “The Book of Daniel” on NBC, “Emily’s Reasons Why Not” on ABC and the modest debut of early pickup “Heist” on NBC three weeks ago.

A high failure rate is a reality of the TV business, Mr. Mosko said, something Howard Stringer, chairman and CEO of Sony Corp., knows well as the former president of CBS.

“He gets it,” Mr. Mosko said of Mr. Stringer. “Everything I’m dealing with, he’s already been through However, how long Mr. Stringer, who was not available for comment, is willing to wait for a network return on the Sony investment is an open question.

If none of the network projects in development work next season, that’s a financial loss reminiscent of the deficits that drove Mr. Stringer to rethink the business in 2001, when he was chairman and CEO of Sony Corp. of America. For now, Mr. Van Amburg said, Mr. Stringer has given his creative team a strong mandate to “find projects not currently on the air.” While a hit in 2006-07 would be welcome, Mr. Stringer is not going to pull the plug like he did 4%BD; years ago, he said.

“Do we want a hit on network television? Yes,” Mr. Van Amburg said. “Is it critical to our success? No, but we want it.”

Jay Sherman contributed to this report.