Thursday, February 7, 2008

Strike Demonstrates the Short-Sighted Approach of TV Networks

[NOTE: The following article will also appear as my regular television column for WILDsound.]

I once worked for a publishing company that specialized in annual updates to books. Soon after I started there, I noticed that nearly half of the releases came out in the fourth quarter of the year. I later learned why the schedule was so unbalanced, when my boss told my team to scramble to get several of our first quarter publications out early, in time to qualify for the fourth quarter, so that the earnings reports for the year would reflect the greater revenue. Thus, every year, more and more of the companies products came out in the fourth quarter.

Curious, I asked some of the company’s bean counters if flooding one quarter with releases affected sales numbers, and I was told that the strategy absolutely led to more cancellations. Buyers who subscribed to multiple publications could not handle the sudden onslaught of bills, unlike when they were spread more evenly throughout the year. The finance folks confirmed what was now obvious to me: When making a decision, the company was vastly more interested in how it would affect the immediate situation, rather than what the impact would be in the future.

What does all of this have to do with television? This kind of short-sightedness is crippling the television networks, especially the way the Alliance of Motion Picture and Television Producers, the group of major producers in a labor dispute with the Writers Guild of America, is handling its impasse with the writers, along with how the programmers have been filling their time the last few years.

An article in Variety last week noted that, even taking into account other factors, the strike has hurt the ratings of network television shows. Considering how ratings have plummeted over the last few years as networks faced competition from tons of cable channels and the Internet, one would think that the networks would do anything to avoid angering viewers further. One would be incorrect, apparently.

To take a step back, it seems to me that the short-sighted approach of the networks to the changing broadcast landscape had already started to weaken the industry, even before the writers began manning picket lines. In the way that my former employer sacrificed the future of publications to maximize immediate revenue, networks began embracing reality television, which is relatively inexpensive to produce and able to garner decent to outstanding ratings, depending on the property. Scripted shows became less common, and sitcoms nearly qualified for federal endangered species protection.

I am not so narrow-minded as to believe that reality television has no place on the air. Well produced, exceptionally rated shows like “American Idol” and “Survivor” were effective shots in the arm for the industry in its battle with its new competitors. The problem is that, of course, producers figured out that cheap knock-offs of these shows, like “The Next Great American Band” and “Big Brother,” could be made on the cheap while either coming close to, or eclipsing, the ratings of scripted programs in time slots.

On the surface, getting similar ratings for a lower investment seems like a great idea. But television is not a normal business. There is a cultural aspect to the business model of television that is absent from selling laundry detergent. Television is integrated into the fabric of American life, and the job of the medium is to engage the public, keep viewers interested, and keep them coming back. Beyond a few crazies with nothing better to do, are people emotionally invested in second-tier reality shows like “American Gladiator” and the 47th version of “The Bachelor”? Sure, the programmers have secured the eyes on their programs today, but what about the future? By changing the very nature of the medium and offering disposable programming that viewers have forgotten about before the end credits have finished rolling (or speeding by at unreadable rates, like they do now for many programs), the networks are surrendering the very bond that kept people coming back for the last 60 years.

Put it this way: In 20 years time, people will still be watching episodes of “30 Rock,” even if only five or six million people are watching each week now. But who will be watching reruns of “The Biggest Loser” ever again, once the original episodes air?

Before you accuse me of being an idealist with no appreciation of the need to generate revenue, let me remind you of the magic word that sends producers, actors and writers dreaming of untold riches: syndication. Just ask Jerry Seinfeld or the creators of “Friends” and “Frasier,” to name three prominent examples of programs that have made a fortune being sold for reruns in local markets and on national cable stations.

It used to be that networks didn’t make any money on syndication, because they were not permitted to own programs. They were limited to acquiring content from production companies. Thanks to the deregulation craze of the 1990s, the rule has gone the way of Betamax, and networks now own a piece of nearly every minute of television that airs. They are finally cut in for a piece of these lucrative syndication deals, so what do they do? They stop making television shows that can be syndicated. After all, years from now, nobody will turn on a local station at 11 p.m. and watch a ten-year-old episode of “Wife Swap.”

Syndication raises the same short-term-versus-long-term argument. Sure, you might be able to squeeze a few more dollars today out of “Hell’s Kitchen” than a slightly lower-rated sitcom, but what about five years from now? When all the dollars are added up, which show will be more profitable? The long-term benefits of scripted shows are not limited solely to the sociological role of television in American life, but can be found in the hard dollars to be earned by a program down the road.

The lack of foresight shown by the embrace of reality television can also be seen in the way producers are nickel-and-diming the writers in the strike (actually “pennying,” since the union is reportedly looking for a few cents per download). Thanks to the walkout, network schedules are nearly completely bereft of new episodes of scripted shows. The networks have effectively provided viewers with yet another excuse to break the habit of watching television. Whether people go on to video games, the Internet or some other new form of entertainment that hasn’t been made apparent yet, they are finding alternate ways to structure their lives that do not involve settling in front of a traditional television set each night, something that was a given for most American families just a few years ago.

With ratings down, maybe it’s time for the networks to take a radically different approach to their industry and change the way they quantify the success of their programs. The chance of that happening, I fear, is roughly the same as my former publishing company adopting a balanced publishing schedule. Of course, the publishing company was acquired, moved and gutted a few years after I left. It’s too late for that business. The networks should act before it’s too late for them. They may not know it, but they are playing in the ultimate episode of “Survivor.” And there are no immunity idols in sight.