Not so long ago, basic cable was a peaceful medium, filled with old movies, network reruns and kiddie shows. Then FX’s “The Shield,” starring Michael Chiklis, kicked in the door and changed all that.
FX, an upstart network, gambled that producing the kind of high-quality, grown-up programming previously seen only on premium channels like HBO could put it on the map. It also hoped that, at some point, it would be supported by advertisers.
“The Shield,” starting its seventh and final season this week, accomplished all that and in the process emboldened other cable networks to commission original series of their own. It also lured in advertisers who were leery of the bare-knuckle, morally ambiguous storylines that made the show a hit with viewers.
“If we had a building and there was a cornerstone, it would read ‘The Shield: March 2002,’” said FX President John Landgraf. “That’s really when FX as we know it began. And frankly, I think that’s when basic cable began as you now know it in terms of scripted original programming.”
FX’s risky bet paid off in critical acclaim that brought about the first lead actor Emmy for a show on basic cable. The winner of that award, Mr. Chiklis, likewise took a chance with his career by pursuing a role in a risky show on a network few in Hollywood had heard of.
“I think the face of basic cable was changed for ever,” Mr. Chiklis told TelevisionWeek. “It made a lot of people think, ‘Why can’t we?’ I think a lot of people made a lot of phone calls and tried to find out what we were doing and the formula behind that.”
Mr. Chiklis plays antihero Vic Mackey, a Los Angeles cop who in the first episode kills a fellow officer to cover up some of his questionable law-enforcement practices. The often-violent series has been dealing with the consequences of that event ever since, with a resolution promised at the end of this season.
With the close of the season, FX will turn to other originals, such as motorcycle-gang drama “Sons of Anarchy,” to help it retain its status as a top-10 network among adults 18-49. It’s riding a reputation for edgy, award-winning original programming that commands high advertising rates. Its newest series, “Damages,” this year became one of the first basic-cable series nominated for best drama, along with AMC’s “Mad Men.”
Since 2002, cable networks have ramped up their spending on original programming, which is earning a bigger share of viewers, awards and ad dollars.
“Networks that are more adult-skewed and willing to take more chances were emboldened,” said Tim Brooks, television historian and former top research executive at Lifetime and USA Networks. “Not only did ‘The Shield’ show the way, but it showed that you can do it and the government wouldn’t close down your network. And advertisers, while they might have initial qualms, would eventually come around to support a show like that.”
Mr. Brooks noted FX followed up “The Shield” with “Nip/Tuck” and “Rescue Me,” two shows that also were very much for adult viewers. Other networks followed suit, with shows like TNT’s “Saving Grace” and AMC’s “Breaking Bad.”
“I think the USA stuff, some of the TNT stuff, is tougher than it would have been” before “The Shield,” Mr. Brooks said.
Cable networks also were able to attract first-class talent to do these shows after Mr. Chiklis won his Emmy.
“FX couldn’t have dreamt of an Emmy before that show,” Mr. Brooks said. As awards shaped perceptions of “The Shield,” putting it on the air began to look like a shrewd business move.
“Year one, it was sex and violence, and year two, with Emmys and glowing reviews, it became romance and action,” said Fox Entertainment President Peter Liguori, who was president of FX when “The Shield” went on the air. “We were able to turn that around and really started to show a business model that said, basically, cable can in fact invest that amount of money in original programming and it’s good business for everyone.”
Indeed, the strategy of creating original hits on cable as broadcast network ratings decline has proved a “very profitable” one for FX, according to SNL Kagan analyst Derek Baine.
Despite incurring above-industry-average programming costs, FX’s “average cash flow margin was below the industry average in 2002 and jumped above it in 2003 and beyond,” Mr. Baine said.
FX nearly doubled its program spending from 2000 to 2002, when it spent $217 million, according to Kagan. Program spending has continued to rise, totaling $309 million last year.
Revenues have climbed as well, hitting $729.2 million last year, up from $396.5 million in 2002. Cash flow tripled to $354.4 million in 2007, compared to $123.8 million in 2002, according to Kagan.
FX’s example has encouraged other networks to program more original shows.
The Cabletelevision Advertising Bureau calculated that ad-supported cable networks spent $19 billion on original programming over the past five years. The CAB found that 67% of the shows on ad-supported cable were original productions in April, compared to 59% in April 2003.
Generally as series get older, they grow more expensive—even as viewership begins to erode.
But Mr. Landgraf said the decision to end “The Shield” wasn’t primarily an economic one.
“Certainly there’s nothing unsupportable financially about the cost of the show,” he said. “It’s arguably still cheaper, since we know it’s a successful show, than two birds in the bush.”
“The Shield” cost a little over $2 million an episode, slightly more expensive than most new cable series, according to Mr. Landgraf. While salaries for Mr. Chiklis and others have gone up, “The cost of physically producing it has mushroomed hardly at all,” said Mr. Landgraf.
The show’s documentary-style production keeps it less expensive than, say, “Nip/Tuck,” which has a glossier look supported by expensive sets and wardrobe, he said.
Still, most networks don’t set an end date for a series that is still going strong.
“Networks are so cognizant of the fact that it’s very, very difficult to find, develop and launch a great hit show that, generally speaking, they make the decision that they’re going to keep those shows on the air indefinitely and they just live in denial. Eventually the show is going to lose its steam and its quality and they’re gong to have to cancel it,” Mr. Landgraf said.
Instead, FX decided that “The Shield” had a fixed lifespan, Mr. Landgraf said.
“It also has an interior narrative structure that’s best served by a limited number of seasons,” he said, “and therefore, let’s plan for it. Let’s do it intentionally.”
Planning for the end of shows also encourages ongoing development.
“There is a dynamic tension between business guys saying you have three hit shows, rest on your laurels,” Mr. Landgraf said. “My attitude has always been the minute you start resting on your laurels is the minute you’re forced to keep these shows on the air past their creative shelf life. You end up diminishing the quality of the shows, and then you end up scrambling to replace your hits after they’re gone.”
FX’s ad revenues also have jumped, rising from $142 million in 2002, when “The Shield” launched, to $322 million last year.
It was an uphill struggle to convince advertisers to spend money on “The Shield” and some of FX’s other programming.
Mr. Liguori recalls that when the network decided to produce “The Shield,” it anticipated problems with some advertisers. He set up a screening at the News Corp. building in New York for some of the biggest ad buyers. Before the projector rolled, he asked the group rhetorically whether, if they could, they would place an ad in “The Sopranos.”
“I said, ‘I think the question will make sense to you after you’ve seen the show,’” he said.
After the screening, he asked how many of the buyers loved “The Shield.”
“Everyone’s hand went up,” he said.
Then Mr. Liguori asked how many would buy spots in the show for their clients. No one raised a hand.
“And I said, ‘Obviously we think we’re going to be able to deliver eyeballs with this show. Obviously for us to continue doing original programming, we’re going to need our advertiser partners.”
Mr. Liguori told the clients he knew the show wasn’t a match for all of them, but that it would work for some.
“I do believe the advertisers saw the benefit in figuring out how to support high-quality original programming in basic cable,” he added.
In its first season, “The Shield” managed to sell only about 60% of its ad inventory for cash, albeit at higher prices than the network had ever seen before. Now that show, and FX’s other originals—comedy “It’s Always Sunny in Philadelphia” and the new drama “Sons of Anarchy”—are sold out through September, according to Michael Brochstein, senior VP for national ad sales at FX.
Mr. Brochstein said FX’s original programming is the revenue driver for the channel, generating premium prices and raising the value of its other inventory. Thirty-second spots on “The Shield” cost $80,000 to $100,000 and the final season is being sponsored in a big way by beer giant Anheuser-Busch.
“Our originals are what drive this network. Our movies are great and everyone loves them, but give me the originals,” Mr. Brochstein said.
From the beginning, those originals have been the target of decency-advocacy groups such as the Parents Television Council and the American Family Association, which wanted FX to take the shows off the air and urged boycotts by advertisers.
“I think that those so-called problems were always overblown by a special-interest group that had an agenda to trumpet its successes and is frankly dishonest in the way it portrays its point of view and its successes,” Mr. Landgraf said.
He said FX set up a policy of providing “Shield” advertisers with advance copies of individual episodes.
From time to time, an advertiser has opted out of a specific episode.
“Of course, as that occurred it was often erroneously—and I think intentionally erroneously—reported as advertisers pulling out of the shows,” Mr. Landgraf said.
“The Shield” and the brand of original programming it initiated have changed the face of cable and its advertising business.
“What you really have is there’s been a steady build. Every single season that FX has been in the marketplace with its shows, every season there’s been more advertisers, there’s been a wider breadth of advertisers,” Mr. Landgraf said. “You’ve gone from alcohol advertisers and movies to a point where virtually every national consumer brand of any importance is now on the channel.”
Seasonal Breakdown of “The Shield” Tuesday Original Episodes
|Persons 18-49 (in %)||P 18-49 (000s)||Persons 2+ (in %)||P2+ (000s)|