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Syndication Roundtable: Warming Up to New Media

Dec 16, 2007  •  Post A Comment

Syndicators have been aggressive this off-season as high-profile names such as Howie Mandel, Bonnie Hunt, Dr. Phil McGraw and Steve Harvey prepare new projects designed to pump up station numbers. Meanwhile, with the off-network pipeline drying up, other distributors are seeking pre-branded product to sell to stations as independents once again find their footing in the industry.
TelevisionWeek convened some of the movers and shakers of the syndication world for its eighth annual syndication roundtable, held earlier this month at the Four Seasons Beverly Hills. This year’s participants were John Ferriter, worldwide head of nonscripted TV for the William Morris Agency; Hilary Estey McLoughlin, president of Telepictures Productions; Dave Morgan, president and CEO of Litton Entertainment; Pat Patton, VP, station manager and program executive for KRON-TV in San Francisco; and Rob Silverstein, executive producer of “Access Hollywood.” The roundtable was moderated by Chris Pursell, deputy editor of TelevisionWeek, with Editorial Director Chuck Ross taking audience questions.
The lively discussion tackled the perils and challenges of the business, including the importance of digital outlets for syndicators, the difficulties facing the National Association of Television Program Executives, the role of independents and where, exactly, distributors go from here to grow ROI. Here is an edited transcript of that discussion.
Chris Pursell: We have a terrific panel right here and we’re going to try to look into the nuts and bolts of what is the syndication business right now, from the digital revolution to consolidation to even the relevance of NATPE.
This is our eighth syndication roundtable. I was reviewing our first one and we’re seeing a lot of the same issues that syndication is still struggling with—what constitutes a hit, how do you make money in an era of declining ratings as well as consolidation, especially among the stations, and how that’s affecting development, purchasing. I just wanted to throw out for the first question: How do you launch a show and make money in this era?
Hilary Estey McLoughlin: Obviously there are challenges in terms of launching shows right now for a variety of reasons, and one of the main reasons right out of the box is that you’re generally inheriting weak time periods that had failed shows in them. So you’re going in with a lineup that generally is around a 1 rating, maybe less in some cases if you look across your entire lineup.
So you have to be going into it knowing that you have something that you feel right about and passionate about and you feel that has the potential to break through. And I still think that things that have the qualities for success will continue to break through, even in those challenged time periods.
We’ve had, year after year, the same kinds of challenges, and there has been some success and you see growth. You have to be in it for the long haul. You have to be willing to spend the money, and spend money on marketing—more money on marketing now than ever before—to get people to even know that the show is on the air. [You have to] work with the stations. That’s a big focus for us, to work with the stations to maximize promotion and come up with innovative ways to market shows with them. …
I think just like the prime-time business, anytime you have a show that has potential, the audience will find it. This business is not going to die. It’s good shows or good personalities—people will come to those shows and they will stick with them and they will grow. And then you have a better profit potential down the line if you’re going to stick with it.
Mr. Pursell: Are stations still buying on quality of product?
John Ferriter: I hope so. It’s really tough. There are a lot of things that come up. There’s a lot of shows that are pitched. There are a lot of personalities that come into the marketplace and say they want to do a show, and I think part of that’s why development, I think, is so important. If it’s a talent-based show, you’ve got to have talent that understand how hard it is to work in this marketplace, that it can’t be an afterthought, it can’t be “I want to do this because I want to spend more time with my kids” or something like that. It’s a full-time job. And it’s a six- to seven-day-a-week full-time job to launch a show. Hilary is absolutely right: You’re not inheriting great time periods, you’re inheriting time periods where other things haven’t worked, which is why you’re getting the time period. You have to change viewing habits of people and you’ve got to create awareness for the shows.
If you’re on the buying side and something comes in, the quality of the show can be absolutely fantastic. I mean, you can look at it and say this is a great show, but if you can find an audience particularly early on, you’ve got to really make traction within those first 13 weeks. Otherwise, people will default to their viewing habits and they’ll go back.
There’s a reason why some of these shows have been on for years. Some of them are great and other shows are maybe not as good, but the people get time to do stuff. … Conan [O’Brien] is the perfect example. Conan had 13-week options for the first couple of years, and at about the 10th week … every cycle, we thought it was going to get canceled. OK, now this guy has a deal to host “The Tonight Show” in 2009 and he almost got pulled several times….
So it takes time to really get an audience comfortable with talent, if you’re doing something that’s talent-based, and then also you’re dealing with cost factors if you’re launching something which is a concept. If you look at what Telepictures has done with “TMZ,” because it ties into a lot of things I’m sure we’re going to talk about, digitizing the branding, it ties into low cost, it ties into kind of a different production model. And it really takes guts to launch something like that in the marketplace, because it is different. Whether you love it, hate it, whatever your opinion is, it’s different, and I do think that one of the things that audiences seem to respond to—and it helps a buyer when they’re making those decisions—is looking at a situation saying, “Am I doing something that’s different or am I doing another version of something else that’s out there?”
Mr. Pursell: Pat, are you finding that to be the case on the station side?
Pat Patton: Well, it’s interesting that at the station level at KRON, we’re doing something a little different. The old philosophy of “Let’s make a show and then sell it and see if anyone wants to buy it,” we don’t do that. Our whole approach to developing programming is we’ve told our salespeople, you sell it and we’ll make it. Every show that we produce has to be profitable before we produce it, which means we have to have sponsors in place before we’ll do the show. So basically, we’re selling sponsorships to programs and then we produce them. That’s how we make it profitable.
Mr. Pursell: While you’re talking about awareness, would it even be possible to launch a show like “Access Hollywood” and expect the same kind of results right now? Rob?
Rob Silverstein: Yeah, I think with the right promotion. Here’s what I think it takes, a good show, all right? The right promotion, the right TV stations with the right lead-in, with the right lead-out. If you put that combination together, as long as it’s a good show, it will work.
Ms. Estey McLoughlin: None of that is possible. (laughter)
Mr. Silverstein: Getting the good TV station. Right. So knowing that that’s tough to get, the landscape is filled with casualties and getting more and more casualties.
Mr. Ferriter: It’s also interesting, tying on that, is oftentimes we’ll call buyers or we’ll call station groups or whatever and we’ll ask them, will you adjust time periods, and they say no. And then you call them later and you know, for lack of a better example, you say Billy Crystal wants to do a show at 7 o’clock every night, they go, “Fine. We’ll find the time.” It depends on what it is. It depends on who is attached to the project and what their brand is. I mean, branding is everything. If you did “TMZ” and called it something else, who knows what would happen? But because everybody goes to the Web site, that’s a brand. That is a really big brand and it’s a young brand. And it’s the same sort of thing. If you tried to create “Access Hollywood” right now, you know, it’s pretty competitive waters there, but if you’re going to launch “Access Hollywood With Katie Couric” or something, at this stage it’s different because you’re going to get an audience that’s going to show up to see the personality, and then if it’s well produced and everything, they may stick around.
Mr. Pursell: Maybe not with Katie Couric. What I’m wondering about is how you guys feel about the incubation method that CBS has used so well with, obviously, “Dr. Phil.” They’re doing it with “The Doctors.” Do you need to find something that’s really compatible? It made some organic sense for Dr. Phil to show up once a week on “Oprah.” Would it make sense just to draw some personality and put them on “Ellen,” for example, and see how they did and say, “Oh, that’s a show,” or does it really have to work organically? Iis that why it’s not done that often?
Dave Morgan: I was going to say Pat has “Dr. Phil” in San Francisco and he doesn’t have “The Doctors.” The question is cross-pollenization of talent, as the world gets smaller, and if you go back to Dr. Phil on “Oprah,” as Chris talked about, you need those launchpads to make it work. So the question becomes what we talked about—promotion and incubation or big brands. The question becomes how fast as a viewer—and we’re all viewers in here—how fast will you adopt something and why would you adopt something.
The failures that we’ve had didn’t ask that question. Somehow shows that we all said were going to be dead on arrival the last 10 years were dead on arrival. It’s pretty easy odds to bet that something is not going to work today.
So if you look at other industries, that’s usually when an industry is in its maturity stage and it’s about to be changed by something—in our case, technology. And so we thought we had the skill sets down to deal with cable, and now as broadcasters we are dealing with much, much more than that, whether it’s phones, Internet, Web sites, God knows what Apple has up their sleeve for next Christmas, but those things are going to continue to fragment. Our skill sets are going to have to increase. We need to get ahead of that curve.
And some of the standard things that have worked are certainly talent-driven brands. You know at our company we’re bringing out “Pimp My Ride” and “Cribs,” “Storm Stories,” those are projects that built an audience, they proved themselves and they’re coming out [in fall 2008].
With Dr. Phil coming from Oprah, if Phil comes onto the set, you know, the question is, if you have Dr. Phil and you’re paying those amounts of money, is that going to make you happy? I can see the argument both ways, because it’s so hard to get an audience. We’re going to have to not only change our skill sets, but change the way we think.
Mr. Pursell: Now as an independent and you’re finding consolidation, are there cracks right there? Is that why you’re going after off-cable shows that are pre-branded?
Mr. Morgan: Absolutely. Not only is it comforting for our business model and our economic models, but it’s very comforting for the station when you walk in. I mean, it’s no different than selling an off-network sitcom in the fact that you can lie down in the deck a predisposed demographic skew to advertisers, there’s all of that that’s great about selling a show and Pat and his associates sit down and look at a television show and a lot of the questions are answered. And there’s nothing new there. The question is why “The Megan Mullally Show” and “The Jane Pauley Show” and a lot of shows that have come out recently with famous people just didn’t execute, and I think that goes back to the question of talent. We are, I thin, going to see a lot more projects that are going to be mostly about taking those big objections as questions that we can’t roll the dice anymore. People like Steve Kunin with TBS and TNT, they are taking our product on cable and making literally billions of dollars through to their bottom line and repeating “Law & Order” 40 times a week. We need to learn from that and do the same.
So at Litton that model is in the form of some stories where you can localize the show, which has another element, and “Pimp My Ride” and “Cribs,” that’s our world, that ‘s what we know about. Creating shows and creating strips, I hope we continue to do it. I know Debmar is developing another strip potential [with] Tom Green. So we as independents think innovative, we think ideas that are branded, ideas that have very strong mechanisms whether it’s reality or what have you, are going to continue to drive the business. The studios will continue to have deeper pockets than we do as independents. But I think there’s never a bad time for a good idea, and that’s what we as independents stand for.
Mr. Pursell: That brings up a good point about the Internet, from Tom Green and TMZ, both of which are launching shows, to “Access Hollywood,” which is kind of doing the reverse—and you’re creating record traffic on your own site, aren’t you?
Mr. Silverstein: Yeah, in the last year and a half we really got into the Internet business full-time. We put the resources behind it. I believe if you added up all the other shows you have—the “ET’s,” the “Insiders,” the “Extras” and the “Inside Editions”—they still don’t equal the traffic of “Access Hollywood.” And obviously since the deal with omg! [in which] we partnered with the Yahoo! Brand, that has really helped. I think as we relaunch the Web site in January when you see a new kind of hybrid type site that you don’t see other places, that will continue to increase. I think we’ve also learned as a TV show on how to promote to the Web better than just “For more of that, go to… .” I think you need to tease it almost as if you’re teasing within the body of your show. So that was a learning curve over the last year and a half. Truly, I can now tell if we’re going to have a big day on the Web based on how we tease from the show, which was never the case a year ago or two years ago. Now I can. And I can also tell you beforehand based on content what they’re going to go to. That’s another thing. … If something is really big in the Web and pops, I know that, hey, we might want to be doing more of that on the TV show.
Mr. Ferriter: It’s funny when you talk about it, because you can’t ignore the Web. You just can’t. And once again, I use “TMZ” as the perfect example. Here’s a brand that’s an Internet brand, it goes on [television], there’s instant awareness. There’s instant water-cooler talk about it, it’s something that people where I work, every day, everyone is on TMZ.com. I don’t know about where everybody else works, but where I work everybody, every assistant, everybody checks in every day. We used to have clients there, so that’s why we have to know what’s going on. But that being said, everybody does it.
I don’t know if any of you know what’s going on with the Tom Green situation, but Tom Green came to us. This is a guy who created a brand of comedy. There was no “Punk’d” before Tom, there was no “Jackass,” there was no Jamie Kennedy, there was no Borat, those are all things that he did, he created it up in Canada. He brought it down, he did it on MTV, it was very successful, he got cancer, he had to come off the air. When he went back on the air later and to make good with MTV, they didn’t want to do a daily strip, which was all he wanted to do. He wanted to do a late-night show.
So when we went and made the rounds into great meetings with everybody in bigger studios and got some offers, Tom came back in and he said, “I don’t want to be in a situation where people are telling me what my content should be. I want to flip a switch at my house and basically go out to people directly.” And we all laughed and then we figured a way to do it. And he did it for a little over a year, doing a talk show from his house, and then latterly the guys from Debmar came to us and said, “We want to put it on TV. You do whatever you want to do, we just want to distribute it. We’ll put up money, we’ll find stations.” So it goes on Jan. 7, it’s less than 10 stations, there’s a foreign deal which I’ll let those guys announce, which they’ll announce probably sometime next week, and he’s doing exactly what he wants. Whether it works or not will be up to the audiences that watch and people on the Web.
But by doing the things that he’s doing, he has direct contact. He, as the guy, has direct contact with the audience. So he knows exactly what they want, when they want, who they want to see, because he gets all the e-mails. Everything comes directly in to him and then, when he finishes the show, he can stay on the Internet and talk to anybody he wants. So even though the show is to be formatted a little bit differently to cover what the TV portion of it is, he still can flip that switch and go on 24 hours a day on the Internet, with a very small staff. And he’s got a staff of like three people and he’s doing something which is essentially what all the other late-night shows do. But it just goes to show you that there are different ways to do things. And it’s all driven by the Internet.
Ms. Estey McLoughlin: I think that’s definitely what the success of TMZ is. Obviously went into TMZ hoping that it would be a television show at some point and went the reverse direction. The idea of incubating ideas on the Web and building brands that way and then bringing them back to television is definitely part of our strategy now. I think you need to do anything you can to kind of get the leg up and build that kind of awareness. And then when you do that, you actually have to deliver on the brand. So I think staying true to the brand when you make the transition is critical for success. Now we’ve become the only major media company to cross-platform a show on the Web and on television, and I think it’s because we actually delivered the TMZ brand to television in a way that was true to its original form on the Web, and they complement each other. And we differentiated it from an entertainment magazine show that had a sense of humor, had a point of view, and I think point of view is really important, [as well as] topicality so people come back. You know that’s another very important feature. …
I think the whole idea that the consumer sort of drives the brands now, that you’re kind of creating brands together with the consumer, it’s powerful. And if you allow that to happen and you kind of embrace it and engage them into it, I think that’s the key to the future, because we’re going from now a mass medium to a personal medium. User-generated content people are deciding what they want to watch, when they want to watch it. It’s platform-agnostic. They don’t care where they see it, when they see it, as long as they can have access to it, particularly with younger viewers. So it’s a big part of our strategy.
We just launched another destination site called Mom Logic, which is a site that we say is for thinking moms who don’t have time to think. And we think it’s a really viable idea. We know that there is a huge exodus of women from television, particularly in daytime, to the Web. [Women] are going onto the Web in huge numbers, and they’re leaving daytime television. We’re trying to build that brand and see how that goes. And if it’s successful, hopefully we’ll bring it back to television. So it’s a big part of our strategy.
Mr. Pursell: How do advertisers work into that equation?
Ms. Estey McLoughlin: The digital model now is mimicking or duplicating the syndication model. It’s maximizing distribution, putting together ad networks with targeted demographics that advertisers can buy. … There’s going to be contextual integration into the site, and then ultimately we’ll do the same thing we did with TMZ and cross-sell the advertisers from syndication back to the Web, and back and forth.
Mr. Pursell: Let’s shift gears a little bit. Going through the transcript of our very first roundtable, the illustrious Dick Robertson was discussing how the sellers pay for NATPE and the buyers run it. Is that still the case?
Ms. Estey McLoughlin: We think there’s value in the convention. We think the buyers are there. You know pretty much now you’ll end up clearing your line up before you get there, if you have any chance of getting on the air. So it has value in terms of building customer relationships, some of the smaller markets, you can clear the rest of those markets. We think as a studio and a distribution company, we’re there because our clients are there, and we’re going to continue to be there.
Mr. Ferriter: It’s really easy to bash NATPE. A lot of people say all sorts of stuff, [but] you know what, any time you have an opportunity and you have a gathering where you can take buyers, producers, creative people, foreign producers, foreign format holders, everybody that’s here, and you can go in one place, that’s a really good thing for the business. That’s first and foremost.
Yes, you do need the support of the major studios. You need support of people who are buying booths and doing all those things, because it helps. It’s a nonprofit organization, so you need to do that. But look, we tell all of our clients first off, it’s no different than Mip or Mipcom. NATPE is not just about first-run syndication. That’s part of it, but it’s about TV and broadcast and branding and digital and everything else these days. And being in Las Vegas, it’s an hour flight from here, it’s a four-hour drive, there’s no reason not to go.
Let’s put it in perspective. You pick up the trades and you read that Reveille is going to sell “The Shine” for $200 million or something like that. OK, six years ago Reveille didn’t exist. They were a bunch of guys I worked with at William Morris, all very nice guys, and they essentially formed a production/distribution company and have done a phenomenal job—primarily as a distribution company, with the rights that they control. Six years ago it didn’t exist. All of those guys spent all their time going up to NATPE and to Mipcom getting relationships.
So if you look at a company like Reveille, and if indeed the numbers are accurate, which is pretty impressive by anyone’s standards, you know, what are their shows? “The Office”: foreign format that Ben [Silverman] was able to get. “Ugly Betty”: foreign format that came from Colombia. “Biggest Loser”: created by someone else who brought it in to them in the mail, developed it and took it out. You can go through the list of things that they do. So much of it is format-based. And what they’ve done in a very smart way is they’ve gone to every creative producer out there and they’ve said, give us your formats and we’ll sell them around the world, because we’re going all over the place. And they make sales at NATPE—as does everyone else. …
You may not be clearing things in the manner that they were cleared 10 years ago, and Hilary is absolutely right that you can make three calls and basically clear a show if you get the right station groups. But while you’re there you continue to forge relationships. Anybody here can end up running a station group at some point. So a relationship that happens at 1 o’clock sitting at a craps stable—basically how I met Rob originally, years ago … I think we were playing cards or something at 2 o’clock in the morning. Those are relationships that can be forged for years, and this business is entirely based on personal relationships, and anyone who thinks it isn’t is mistaken. That’s part of the importance, I believe, of NATPE, and of keeping it going and of supporting it.
Mr. Pursell: From your perspective, Dave?
Mr. Morgan: It’s a great convention, it’s just different. It’s not what it used to be. … People make it a whipping boy, and Rick [Feldman, NATPE president] has a tough job. We’re in a changing world. Any time a business, nonprofit or profit-oriented, has the kind of downturn from its customers, it’s going to have a lot to recover from. And I think they’ve done a very good job recovering. I think they’ve turned the corner. I think it’s finding its footing, but for us as an independent company, our [return on investment] has always been tremendous—hundreds of percentage points on what we put into NATPE and what we walk away with. So I don’t see it as irrelevant. … Again, you have to adapt your skills to the convention. You can’t launch shows, you should have your groups done by the time you get there, everybody should know your product. And that makes it different, not irrelevant.
Mr. Pursell: Pat, will you be attending this year?
Pat Patton: I have to say, as someone who served on the NATPE board for 10 years and as a former chairman and CEO of NATPE, I really don’t know if I’m going to go this year. And I’ll tell you why: Because there’s no programming that I need to buy and the 10 stations that I oversee for programming will all have their programming in place by the time of the convention. So can I really justify the expense of going to see my friends, like Dave and the other people that I only see once a year?
Mr. Ferriter: Pat, I’ll pay for you to go.
Mr. Patton: Pardon?
Mr. Ferriter: I’ll pay for you to go. Here’s the point. I understand …
Mr. Patton: Let me finish. I think it’s a matter of what you use the convention for. If you go to try and get caught up on the latest developments in the industry and you go to all of the sessions—which most people, frankly, don’t; they go there, they have breakfast meetings, they meet with distributors all day long, and they’re there for a day and a half or two days and then they go home. And one of the disappointments that I always had when I was on the board is that we would spend a lot of time putting these sessions together and not many people would show up unless you had a big-name personality that was involved. So, John, I think it’s a matter of what you use the convention for. If you use it to go to the sessions, then it may be worth the expense. If all you’re going to do is go to meetings, that’s great if you have programming that you need to buy, but it’s really a difficult decision for me to have to spend the company’s money to go and have dinner with my friends.
Mr. Ferriter: It’s interesting because if you go back to 1999—I think it was April of ’99, ABC launched a prime-time game show. … It was a Japanese format, it was called “The Big Moment,” the deal was set up earlier in the year at NATPE and Vin DiBona had the rights and he was producing it. The deal was essentially done at NATPE that year because they saw the format, the Japanese would come over, Vin got it, meetings took place.
There was another thing that was done right after that … which also kind of germinated from conversations that were taking place at NATPE—a show called “Who Wants to Be a Millionaire.” The next year a deal that was done at NATPE was a little show called “Big Brother,” which is still on the air. And then “Weakest Link” and then, you know, I can go through the list of all these different things. And the interesting thing is most of those deals came about because people were there at NATPE.
The way that I look at it—and you’re absolutely right, if you’re just going to see a couple of friends maybe it’s not worth justifying the company’s moneybut that being said, if you actually look at it in terms of there’s programming that I’m going to buy and programming that’s been presented to me to this point, but I also want to know what else is out there in the world which is coming down the pike, there are opportunities.
Once again, I go back to the personal relationships. This is where Ben was phenomenal when he worked for us, and continues to be. He has personal relationships with all these people. So they can pick up the phone and call Hilary and go make a deal with Telepictures, or they can pick up the phone and call Dave, or whatever. But because all of these foreign people know Ben, because they just hung out with him or they had a drink with him, they literally called him first. And that’s where all of these relationships came from. In some cases, even clients we represented bypassed us and just said, “I want to be in business with Ben because I like Ben.”
And those were all, trust me, company expenses. Those were late-night things of him sitting down having a drink and talking to these people, and it’s forged what’s going to be a $200 million sale. …
You take a lot of good, talented, creative people—and we’re having all of the producers and production companies we represent come this year to, hopefully, meet the buyers and people that run stations and syndicators and financiers. There are banks that show up now that come out to these that didn’t before. There are independent financiers. I just think it’s a good thing. I think you have to make the investment. I wouldn’t want to not go and realize we missed a great opportunity for business.
Ms. Estey McLoughlin: Will you pay for me to go?
Mr. Ferriter: Absolutely. I think I owe you anyway.
Mr. Pursell: Chuck, I don’t know if you want to open it up to some questions from the floor.
Chuck Ross: Does anybody have a question they would like to ask any of the panelists? Raise your hand and I’ll bring the microphone over to you. Talking about NATPE, I think it also depends on, as you mentioned, John, what your purpose is. … The bigger studios have their shows sold a lot of times by the time they get there. So is it a question of just renewing relationships?
Mr. Ferriter: Why can’t we, while we’re there, do a deal for 2009 or for 2010? The business isn’t going away. Whatever box we watch, whatever the screen is that we watch, whether it’s Internet, whether it’s digital, whether it’s HD, whether it’s regular broadcast, whatever it is, we’re going to watch something. We’re going to watch shows. If we can watch and interact with them, so much the better.
A 12-year-old kid today will watch TV and have the Internet there and go online and do all sorts of stuff, and it starts at a much earlier age. I wish I had the knowledge that they have, but I just think if you’re going to be in the business long-term, I think you have a responsibility to go and try to make these deals which are long-term. Hilary, you guys are buying for 2009, right? I think everybody is. So whether the deals have been made for fall 2008 or not, OK, but who says you can’t launch something midseason? Who says you can’t launch something in May?
One of the questions that we were being prompted on earlier was do you keep low-rated shows on the air to maintain the real estate? No. You don’t keep low-rated shows on the air for any reason if you don’t have to. The fact is every one of these companies has development staffs, multiple people; many of them are here today. Their job is to go out and find creative ideas, have creative solutions, find talent and develop shows. So there are plenty of people out there who want to work in this area who can come up with very interesting programming. …
If you look at what Dave has done, some of the shows Dave picked up that they’re taking out, those are successful brands to a 12 to 24 audience, which is going to be spending more time watching in these other dayparts. If you look at what Debmar did with “South Park”—absolute genius. They went to Paramount, who controlled it, and they asked them if they could get it. Paramount said you can’t syndicate the show, you can’t take it out. They basically got every episode, they looked at every episode, they realized there was about 30 seconds of objectionable material on each episode. They went back to the creators and said, “Will you change this so we can syndicate it?” They said yep. They took about a day and a half and changed it, and they made a massive deal for it. And that would have been a video or DVD sitting on some shelf somewhere.
If you look at what Tyler Perry did—Tyler Perry was in a deal with Fox for a show called “Kings of Comedy.” They shot a pilot, Fox decided to go out with “Cedric’s Variety Show” that year because they thought he was a bigger name. Fox released Tyler from the deal. Tyler went and did a deal over at CBS for a prime-time show. He didn’t think they understood his voice, so he went back and took his own money and wrote and shot his own shows, and they’ve made a massive deal for that [with] Turner and it goes into syndication next year.
The big idea, I believe, will always work. And if somebody actually has the resources and the will to go and do it, then they’ve got a shot. The business is always changing. If someone had come to us 10 years ago and said there are going to be all these shows that start coming off of Web sites and things like that, we all would have said no way.
Mr. Morgan: I need to speak for the independent distributor here, which will be Debmar, Program Partners, Litton, we’re all doing well. You know studios and everybody were carving our gravestones in ’98 and ’99. … John, you’ve laid out a lot of product that is not from the studios. I think that’s healthy for the studios. Healthy for the business. I think it’s important to be at NATPE, and as an independent distributor, and all the independent distributors, keep their business vital and competitive. Competition is good. Options are good for people like Pat. …
We talked about incubation at the studios. A different mind-set coming from an independent company, and it’s on display at NATPE and at NATPE we’re all on equal footing. Sure, all the buyers that we’d love to see there and spend special time with there [may not be there]. But I’m thinking of shows that I’ve picked up on that floor and sold the following fall, or a year and a half later—Tom Joyner being one of them that was very successful for us. So it’s an interesting question about NATPE, but it’s not that interesting about why distributors should continue to be there. I think it’s pretty obvious why distributors still should be there regardless of what stations are and are not there. There are so many ways that you can enhance your business as a distributor being at NATPE.
Floor question: I don’t mean to put any of you on the spot, but if you were here for Dr. Phil and Jay McGraw’s presentation, I was wondering if you could just tell me what your impressions were of “The Doctors”in terms of programming. And secondly, what do you think the audience appetite is for medical shows, medical news, medical coverage? Your appetite.
Mr. Pursell: They were actually in the back being briefed, so none of them were able to see it.
Mr. Ferriter: But what I can say as far as the appetite for medical shows and medical information, there is nothing more important than your health. If you can do it in entertaining ways, with great takeaway information, I’ll watch.
Mr. Morgan: Yeah, as a distributor developing, we have a lot of medical from different perspectives. We have Business Week. We have a lot of people working in New York and news at Litton and Good Housekeeping, Consumer Reports. We have some of the best medical people in the country and stations air our product every day. So I know the importance of it. The question for Dr. Phil and Jay is, can they cross over that line and make it entertaining, and it looks like they may be able to. The whole, audience base is changing. The access to this information is instant. So maybe that’s where it becomes successful, but a very high-ranking station individual and I had a short conversation, and I think the question we have to have in all of this product is, does it stay pure to its mission from the beginning to its end? Is there going to be a point that they’re going to be throwing chairs to get ratings? Well, that wouldn’t be great for the medical industry or that subject. So it’ll be interesting to see. If it doesn’t come out of the box strong, right off the bat, what is its own prescription to better itself? In the past it’s been get down in the mud in daytime and become sensational. And that’s going to be difficult to do with that cast and keep credibility.
Ms. Estey McLoughlin: I think it’s going to come down to the personalities they have on, and my opinion is always to go wider and broader and have a larger umbrella to do lots of things. So medical could be part of what you’re doing, but focusing just on medical, I think it may be too narrow personally and I think it’s going to skew old.
Mr. Patton: I saw the presentation and I really liked it. The only question I had after I stopped to think about it for a minute or so is serious medical information, which is basically what they were saying, do people really want to see that five days a week for an hour every day. And as Dave just said, if it looks like that serious medical information is not getting the job done, what will they do to make the show successful? Will they change the format? Obviously those are all questions that remain to be answered, but it’s an interesting concept and, as Hilary said, if they have the right people on that can make it interesting, then hopefully it’ll work.
Mr. Ferriter: You know what’s interesting about the question, but it goes to syndication or daytime in general, I remember when “John & Leeza [From Hollywood]” launched and John [Tesh] didn’t work. So they got rid of him and it became Leeza [Gibbons] and they changed the format of the show and it was on for about eight years. One of the things, when a studio or broadcaster gets behind a show, they’ll put the resources into it and they can really make it work. A show that I always thought was really interesting when it was launched was when Telepictures launched Tyra [Banks]. The argument is always if you take a really attractive woman and try to put her on daytime, people will say the audience at home finds her too attractive and they’re not going to watch.
And it was almost like a perfect storm with Tyra. You had someone who was much different than I think anyone realized she was on a day-to-day basis in terms of her level of interest and how smart she was. You had “[America’s Next] Top Model,” which suddenly became the No. 1 show on our broadcast network and, by the way, there are 200 producers in this town who pitched “America’s Next Top Model.” None of them were Tyra. When Tyra walked in the room and said, “I’ll be on the show,” that’s what sold that show. There were bigger producers who had the exact same idea, but Tyra literally said, “I’m the person. I’ll be on camera every day.”
And when you started to watch what happened when the show went on the air and her level of interest and the things she would do and who she was as a person, and then you had the prime-time kind of explosion of what was going on on the network at the time, it was one of those things almost similar to what helped bring Regis and Kelly back, bring the Regis numbers up was when Regis went on “Millionaire.” You had the daytime helping the nighttime and the nighttime reminding people to watch the daytime, and it still works.
I think “Top Model” is still the top show on the CW, and if you go to a young woman and ask someone between 18 and 34 what their favorite nonscripted show is on broadcast television, something like 30% to 40% say “America’s Next Top Model.” It always comes up in the top three, always. So it’s one of those things that you just kind of watch that’s working and you go, look, the daytime show absolutely has legs because she’s found a way to really become a legitimate personality in daytime. She answered the question “Are you too pretty to be on the air?” and she continues to promote in different ways and works her ass off. I don’t represent her, so I’ve got nothing at stake here. But I’ve watched that situation and I went, OK that’s a brilliant way to get a show on the air and to keep a show on the air and watch it grow. I believe whatever happens with “Top Model,” if some day she decides to leave the show and just concentrate on daytime, I think she’s probably established herself where she can be on the air for a long, long time in daytime and maybe—look, one day Oprah is not going to be on the air. I hate to tell everyone, but one day she’s going to stop doing her show, you have to start looking now at who are the people who can kind of take over that slot. And she’s absolutely poised to do that.
Ms. Estey McLoughlin: Thank you, John.
Mr. Ferriter: You’re welcome.
Mr. Ross: This sort of talks about what you said about Oprah. Oprah started on local TV, as you know. We had “PM Magazine” years ago in Los Angeles, which is a local television phenomenon from Group W. I’m just wondering if you think we’ve reached a period where we’re going to get more local shows. Are more local stations going to be doing more of their shows, because ratings are so low for much of the nationally syndicated product, and then those might develop into national shows.
Mr. Patton: Unfortunately, there is not a lot of local programming that’s being done. In San Francisco, KGO, the ABC owned-and-operated station, has started an afternoon talk show with Spencer Christian, who many of you know from “Good Morning America.” And the numbers there have been growing, and although I work at a competing station, I’m very happy to see that because we need more local programming and more development of local programming. I think the challenge there, and Dave and I were talking before about we’re going to be trying to get together and develop something, but it’s very hard to take a local show today and launch it. We’ve talked about available time periods and Rob said it, you’ve got to get the right time period on the right station to make a show successful. And I would think it would be very difficult to do. I’d like to see more of it, but you have so many syndicated programs now with long-term contractual deals that those key time periods just don’t exist. And they’re not going to exist. I own shows out to 2012. So that makes it very difficult to do what you’re suggesting. … It’s very expensive to do a show locally that has the look that will be acceptable as a nationally syndicated program.
Mr. Morgan: At the expense of looking like a syndicator, let me just pitch you something here for a second. We acquired off-network “Storm Stories.” The interesting thing about “Storm Stories” is it’s not a Hollywood project. It doesn’t look on the face as something is bigger than life, because what it taps into is something that is local. So local meteorologists, when you see it this fall on WGN, the No. 1 weather presence is WGN’s Tom Skilling. So we had four offers in the market, but we sold it to WGN. Same thing with Don Corsini out here, who runs two television stations. Here’s one project that in almost every market has a different reason for the general manager putting it on their air. The idea is very simple. You talked about promotion earlier. You’re going to put your local meteorologist as the star of this television show. What are your production costs? There aren’t any. I mean union markets. You can gang-shoot them, we have 150 of them. We didn’t even expect the response that we got on this, because news still is the bread and butter of a television station. News is the image. It’s the brand. This is a brand extension of that.
I think it’s important to say that we need to bring those kinds of innovations to the marketplace that plays into exactly where the local stations are. You know, bringing some obscure talent to the air, we’ve proven, is very, very difficult to do. Very difficult to introduce somebody new to the air. But in this case, we’re not introducing anybody new to the air. You can’t be No. 1 in news if you’re not No. 1 in weather. So you know those kinds of ideas probably are going to come from independent companies, but more importantly are going to play into what Pat and many, many other broadcasters are doing. KGO in Tampa, Media General, runs “[Live With] Regis & Kelly” every day. Everybody would love to have that show on their air, and if they can’t, they try to locally create that show through the news department. And I’ll bet there’s not a TV station general manager who hasn’t asked that question, how do we do that? And that’s less Hollywood. It’s more broadcast-oriented, more to the roots of what they have done. I think that as we go forward and we look at the vision going out to these 12 contracts, I believe we’re going to see a lot more time periods being taken back by stations, which again is going to create even more need for skill sets that we don’t think about every day at the studios. We don’t think it every day, even as syndicators.
Mr. Pursell: One final question before we go. What role are advertisers playing in the development process right now as well as the production process, Rob?
Mr. Silverstein: In the last couple of years, it’s exploding with sponsor segments that organically fit into the show. If we’re going to do “Hollywood Sightings,” for lack of a better one, that should be sponsored. If we’re going to do box office every day, that should be sponsored. If we’re going to do DVDs, that should be sponsored, and they all are now. One of the problems is actually spreading them out so the show doesn’t start looking like NASCAR or sporting events, where every stack that’s up now is sponsored. But as long as it organically fits.
We get pitched every day. In fact, there’s somebody [whose] … basic job is to come up with these types of revenue generators, and they come to us and we have conversations about them, and if it’s something that fits what we’re doing we do it, but I’d say three-quarters of them get rejected, for a couple of reasons. First of all, “Access Hollywood” … operates on NBC News guidelines. So the same guidelines “The Today Show” has, “Dateline” has or “The Nightly News With Brian Williams,” we have to follow those guidelines. So I’m assuming it’s much more strict than other shows. We just can’t prostitute out everything for money.
And also as a producer, I don’t want to do that. We only have 22 minutes, I have enough every day for an hour, and it’s problematic getting it all in. So every time we add a sponsor, that adds more time that I have to give up to it and I think the local stations after a while, I mean if they really look at it, and I’m not sure how much local stations are actually looking at these shows for content, might say there’s a little too much of that going on. So I police it diligently. And we have people above me, too, who police it diligently. We talk about it all the time.
But it’s become a major part of our business. No question about it. There’s revenue streams coming from the Internet now There’s a huge challenge here. As the business is changing, I watch my 14-year-old, who watches TV in between her soccer practices and tennis practices and school all day. She’s not going downstairs to the big TV. She’s watching all her ABC shows, because that’s what she likes, or “Project Runway” or “Tyra.” She’s watching it on her computer. I watch that and I’m “wow.” And the only reason that she would watch “Access Hollywood” is because I say, “Let’s go, we’re watching it as family time. It’s a good one.” And then we’ll watch it.
But they’re a whole different world and I just like learning from them. I like watching them watch our show. I like watching them be teased, and I’ll quiz them after a tease and then after the piece. I say, “Do you feel cheated? Do you feel anticipointment?” Because I think these types of shows certainly wear that crown of anticipointment, and we try to keep that to a minimum, but then I wonder if young people are getting tired of being sold, because they’re being sold way more than we were sold growing up. They’re being sold all day long on everything. So, as “Access” tries to get younger, I take that into consideration as I produce the show every day. I’m 12 years doing the show. Getting back to NATPE, one of the reasons I still like going is because any time I can get in front of a group of people, any group of people, and talk about the virtues of “Access Hollywood,” I love it because I’m the best salesman the show will have.
Mr. Pursell: Are you finding the same thing to be true from your end, Hilary?
Ms. Estey McLoughlin: We are definitely focused on integrating advertisers into the show, but like Rob, we’re careful about monitoring it and making sure that it’s organic. A lot of what we’re trying to do is create sort of extraordinary events for the show. So in “Ellen” we’ll do sponsorships, you know, travel the show to New York for a week [and] have American Express sponsor that, or Celebrity Cruises. And we go for a big-time sponsorship so that it creates value for the stations and then it creates value for the show. And that’s more of what we’re thinking in terms of partnerships that aren’t just one-offs. But on the other hand, we did integrate into “Ellen” this year. We just did the first one a couple of weeks ago, a live commercial. It was actually Ellen’s idea. It’s sort of a throwback to the golden age of TV, the Texaco Star Theater. Ellen did a live commercial for Toyota’s Highlander SUV. We take the time out of our national [inventory], so it’s not like we’re actually taking the spot and just jamming the stations. … We don’t exceed 30 seconds, and Ellen does obviously a great job making it fun. … I think that it’s gotten noticed and we’ve gotten a lot of interest in that from other advertisers. So we’re looking for innovative ways to partner with advertisers, but we are wary and careful not to overdo it so that it raises the concern of stations and/or the viewers feel like it’s just too much selling. But it is an important part of the business and something we’re monetizing now and it’s an important revenue stream for us.
Mr. Pursell: Who approaches whom in those kinds of circumstances?
Mr. Silverstein: When we took our show to Cannes in May, we took the entire show. It’s the first time a show like ours has taken the entire show there for two weeks. The only way to truly do that in the way we wanted to do it, which was truly host a show from there, not half host a show, not a quarter, but really bring the production there, you need a sponsor. And we found a sponsor and we went out and solicited. We did it for our bus tour. We took a bus tour from the Super Bowl to the Grammys or the Golden Globes a couple of years ago. OK, that took a sponsor to really get that done, to wrap that bus in a Verizon thing and go city to city where every big event, whether it would be the Super Bowl, whether it be the Cannes Film Festival, whether it’s the MBA All Star game, whatever it is, we want to go to and bring the show. Not just as a reporter, but truly take over the event. Sponsors are involved. And we’re going actively pitching the sponsor as opposed to the other way around.
Mr. Ferriter: We do the same thing. I think we got smarter a couple of years ago. We hired kind of a brand integration person and kept them out of the corporate area at William Morris. Kept them out of the consulting area and put them in the TV department. So with a lot of the things we have, we’ll go and we’ll talk to media buyers, directly to advertisers, we’ll have the conversations with them first before we take things out. Because if we’ve talked to some of the people as we’ve created these relationships and they’re like, “We’re not going to put our money into that,” we’re not going to waste time with the buyers if we know there’s no money out there. In some cases, and we’ve got a couple of things that will be announced shortly, they’re going to go into the market completely fully financed because we’ve just put the money together. We believe in it enough that we don’t want to be at the mercy of someone else’s sales department who says I don’t know if I can sell it, if we know it can be sold. In a case like that, we’re in a better position to pick up the phone and call Pat and literally say we have a show, it’s star talent, here’s what’s coming into it, is this something that interests you? You can actually make those calls and then find your partners afterwards to do that. What we’ve discovered is a lot of the people we’re talking to, because we’re going straight to the source, they want to feel like they’re part of the creative process. They don’t want to feel like they’re an afterthought. And we’re doing that more in the network world, but it will definitely hit the first-run world and it’s definitely hitting cable.
Mr. Ross: If I can interrupt just for a moment, we only have a few more minutes. I want to ask first of all if anybody has any more questions in the audience. OK. And maybe actually ask the same question I asked Dr. Phil to each of our panelists up here. What really keeps you up at night?
Mr. Ferriter: There’s so much to do. There’s so much opportunity trying to prioritize on behalf of two things, on behalf of the agency where everyone spends their time, that’s one of the main things along the lines. How do you prioritize with your clients, which projects they should really focus on and try to monetize. Because every client has a passion project which may or may not be something that makes money, but it makes them happy. So you’ve got to make sure they’ve got the opportunity to do that. But you’re also running a business as well, so wherever you’re spending your time, you’ve got to make sure that the clients are going to make money, but also that we get paid for what we do. Those are the things that you’re trying to think about, and then also just building partnerships. MSN is a player. Google is a player. MySpace is a player. Telepictures is a player. NBC Universal is a player. CBS Paramount, they’re a player. Twentieth, you know, Sony. I mean, you go through everything. People used to say, in the first run, pitch to the people who have stations because they can put it right on the air. All right, and then I look at Telepictures and they get one or two things launched every year that are on the air and they keep shows on the air and I remember when we did “Latifah” there, he kept it on for two years, gave it every shot to grow into something. I look at other independents, you know, I know Sony is going through some changes right now, depending on who goes in there, they could be a real player again in this area. So you can’t just look at the here and now. You can’t just, I believe, look at the next couple of months and see what’s going on. You really have to look three, five years out in terms of what’s going on. And those are usually the things, when I wake up in the middle of the night, it’s things that lead to those, like how do you do it, how do you keep your head about you as you do it, how do you make everybody feel like they’re a priority as you do it and how do you, in some cases, shift with the times because none of us can go back and say here’s how we did it 20 years ago. So that’s what we’re doing. Because the business is completely different and the personalities are different. And also, how do you learn? I’m in my 17th year [at William Morris] and I’ve had great people that I’ve worked under that I’ve learned a lot from. Now I’m learning from all the new people that are there and the information, things that they have, access that they have, see what they respond to. You’ve got to stay on top of it.
Mr. Ross: Hilary?
Ms. Estey McLoughlin: I would say probably the margins that we’re making in the business now are getting smaller and smaller. So that obviously is troubling, and we continue to try to figure out ways to be more cost-efficient across our infrastructure and figuring out ways to maximize our staff and any kind of efficiencies we can build into what we’re doing so we can do things leaner and meaner. So that’s a continuing issue and one that we focus on and definitely keeps me concerned as we look at watching shows and looking at profit and how long it takes to make a profit on these shows, where it used to be obviously much easier and you make a profit much sooner.
Then the other thing I would say probably is the attrition of the audience. That’s concerning also to see the kind of attrition that we’re having now. We just looked at the November rating books and across 18 to 34 and 18 to 49, most shows had declined 30% to 40% in the demos, including “Oprah” and “Dr. Phil.” Which shows you what the impact of the People Meters are and as we get into February of ’09 when we’re pretty much everybody’s in the same boat. It’s been pretty devastating for local stations in terms of that impact.
So those two things I would say keep me up at night, but on the other hand, I think it’s a really exciting time. The digital side of things is really exciting for us. I have a fantastic team at Telepictures and we’re always coming up with new ways to do things and new ideas and we’re just going to keep doing that. So we kind of counterbalance it with finding new opportunities and finding new ways to do things, but it’s definitely tougher to make money.
Mr. Ross: Dave?
Mr. Morgan: Other than, she’s about to be 19, my oldest of many kids who is a freshman at college, nothing keeps me up at night. Our company is growing. We are hiring people and very good people. We have a great base of people at our company; five of our top eight managers have been with the company over 10 years. They’re very good. And our culture is very entrepreneurial. It’s an exciting time to be an independent—we’re in vogue. It’s an exciting time to be at Litton. We’re acquiring better than we ever have, great products, we’re getting great reaction from quality television stations, our ratings are going up, our bottom line is growing. It’s a fabulous time. I’m 48 years old and I feel like I’m coming into my own, in my prime, and it’s just like the cards have just played out for Litton and so I sleep really, really well at night.
Mr. Ross: Pat?
Mr. Patton: I’d say just looking for opportunities to bring revenue into the station, new opportunities and how to make the station successful. Very simple, but difficult to achieve.
Mr. Ross: Rob?
Mr. Silverstein: What keeps me up at night is way beyond any of these people. I have to figure out what Britney Spears is going to do night to night. That’s truly a dilemma. …
No, what I go crazy about every night and every day for the last 12 years is how does “Access Hollywood” get on an equal playing field with a competitor—without mentioning the competitor’s name. I truly believe that if we were on an equal playing field that the landscape of this industry would change a lot. So everything I do every day is to try to change that, whether it’s talking to stations, talking to advertisers or just selling this show, because it’s not like the “Today” show or “GMA,” where you can actually compare it because they’re on at the same time … [or] the nightly news, where there is an easy way to compare the two. There’s not and it doesn’t get reported correctly in any magazine. Ratings get reported, but there is not anything about clearances, so that drives me crazy.
I’m a very competitive guy and every single day I try to figure out ways to take down all the shows, but specifically one show. It’s a very competitive, very crazy world. Everyone is chasing these crazy people, and it’s how you present it on the air. So you don’t take it that seriously, but make it important to the people. I actually watch these shows. They’re pretty into these shows. If you’re going to watch “Access Hollywood” or any of these shows every night, you actually care about this stuff. So you’d best do it with a little tongue-in-cheek, but don’t make fun of it.
Mr. Ross: By the way, exciting news for you. We heard this morning that Britney Spears is actually in this hotel.
Mr. Silverstein: Well she’s always in this hotel. She is. She’s in the parking lot. The paparazzi are going crazy.

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