Aging shows face a day of reckoning
- From: David <dimlan17@xxxxxxxxx>
- Date: Mon, 30 Apr 2007 12:41:11 -0400
from broadcasting and cable
Cover Story: The Great Reckoning
By Ben Grossman
It doesn't look good for Law & Order.
An institution on NBC that spawned two successful spinoffs, the
17-year-old crime procedural has declined in ratings and stalled in
its new time slot. Industry watchers are already drafting the
obituaries in anticipation that NBC will drop the series next month
when the network announces its fall lineup.
Call it television's cycle of life. As hit shows grow long in the
tooth, even ones as durable as Law & Order, they inevitably lose the
ability to grow an audience. Meanwhile, their maintenance
costs?inflated license fees, swollen salaries?begin to outweigh the
ratings and revenue they may continue to deliver.
Law & Order isn't the only aging veteran facing retirement. Crossing
Jordan, another NBC procedural, may not return for a seventh season;
The CW's Gilmore Girls may pack it in after seven years; and
six-year-old ABC sitcoms According to Jim and George Lopez are on the
bubble.
And NBC is hardly the only broadcast network faced with deciding the
fate of a show that has passed its prime. As network executives
finalize their primetime grids in the run-up to next month's upfront
presentations, they must determine whether their aging veterans have
another season in them. And, given the risks of launching a show?not
to mention the increased competition for viewers and ad dollars?that
decision is more difficult than ever.
Although the decision to renew or retire ultimately comes down to
instinct, the process involves a fairly logical examination of various
factors, including the show's ratings, its economics and what's being
groomed to replace it.
Striking a balance
First and foremost, however, the process begins with balance. Before
deciding the fates of their aging shows, networks must first consider
the mix of old and new series on their schedules.
?You want a certain number of new shows, some young ones still with
potential to grow, and then some veterans that you know what you will
get,? says Vince Manze, an NBC veteran who was recently named
president of NBC program planning, scheduling and strategy.
Although a roster with a deep bench of proven veterans can be a sign
of stability, failing to support them with younger shows and active
development of new ones can be fatal.
?You have to watch whether there's a chance the rug gets pulled out
from under you one day,? says ABC Entertainment Executive VP Jeff
Bader, who oversees scheduling. ?Could they all go at once??
NBC knows all too well the price of relying too heavily on shows past
their prime. The network struggled to develop replacements for its
expensive and exhausted hits Friends, Frasier and The West Wing. When
all three ended their runs in quick succession, NBC's upfront revenue
plummeted, from $2.9 billion in 2004 to $1.9 billion last year?a loss
from which the network is just beginning to recover.
?We left shows on too long, and I think that was a development
problem,? admits Manze. ?But we were making quite a bit of money [on
those shows] at that time, and it's also hard for sales people to give
that up.?
CBS at risk
CBS ought to take note. According to an analysis of the average
ratings points in the adults 18-49 demo generated by the top 10 shows
at each network, CBS is most at risk for an NBC-like reversal of
fortune, thanks to its heavy quotient of programs aged four years or
more. (Four years is hardly decrepit, but it is typically the point at
which deals are renegotiated and shows begin to accrue the liabilities
of age, including an uptick in viewer demographics as fans age with
the shows.)
Although The CW relies the most on four-year-old or older programs,
which account for 70% of its ratings, the new network is anomalous,
having launched last fall with a schedule largely built on legacies
from The WB and UPN.
CBS, meanwhile, has an undeniably stable schedule. But 64% of the
ratings produced by its top 10 shows come from aging veterans like CSI
(seven years old), CSI: Miami (five) and Survivor (seven). Last year,
the network introduced only four shows at its upfront; executives know
they need to find a hit or two this season and shift the schedule
balance back toward some newer fare.
?It's the essential discussion for CBS right now,? says a former
network executive, ?making way for the future when they are
succeeding.?
To its credit, CBS is addressing the issue with one of its most
aggressive development slates in recent years. Among its new prospects
are Babylon Fields, Demons and Swingtown?shows about zombies,
exorcists and couple-swapping, respectively?decidedly atypical CBS
fare.
And executives at rival networks admit they likely wouldn't do much
differently if they were in CBS' position.
?At the end of the day, it is a business, and I think [CBS has] a
really good rhythm to how they introduce shows and how little they
need in the fall,? says Fox Executive VP of Scheduling Preston
Beckman. ?You really can't fault them.?
For its part, Fox gets 62% of its top-10?produced ratings from shows
at least four years old. (Its numbers are skewed, however, by the
network's disproportionate reliance on six-year-old ratings behemoth
American Idol, which alone delivers 39% of that total.)
At 18 years, The Simpsons is a rare exception. But with veteran hits
24 and Family Guy now six years old, Fox will need some new blood,
whether or not Idol ever slows down.
An educated gamble
ABC has the youngest lineup among networks. Its top 10 shows?led by
three-year-olds Grey's Anatomy, Desperate Housewives and Lost?produce
a second-place 58.5 rating points on average. Four-year-old Extreme
Makeover: Home Edition is the only show in ABC's top 10 older than
three years.
NBC's top 10 shows deliver a fourth-place average of 43.9 ratings
points, but its ratio of veterans to younger shows is closest to the
ideal that Manze envisions: Only 39% of those ratings come from shows
four years or older. Hits like rookie Heroes and three-year-old The
Office have significant potential to grow.
And with several holes in its schedule, NBC has ample room to plug in
new fare. Whether the network decides to free up more space by
retiring Law & Order?and, for that matter, struggling spinoff Criminal
Intent?essentially comes down to a gamble: While renewing the series
would lock in another year of ad revenue, swinging the axe might clear
a spot for a potential new hit to take root.
For any network, that gamble becomes an educated guess after weighing
the health of the development slate against the health of the aging
show on the chopping block.
?If you don't have the development, you always find yourself reaching
for a show that you thought wouldn't be back,? says Fox's Beckman.
?That happens more often than people would like; you generally have
fewer choices than you had hoped.?
Even with promising shows in the pipeline, launching them is tougher
than ever: Of some two dozen rookies launched last fall, half have
been cancelled.
And launching too many hours of programming at once can shake up the
existing schedule too dramatically and spread marketing dollars too
thin, adds Beckman: ?Once you get beyond [three new hours], the
probability is, what you keep on will be better than what you will put
on new.?
Knowns vs. unknowns
Whereas shows in development are unknown quantities, networks know
exactly what they're getting with a veteran in terms of ratings and
demos. In the case of Law & Order, ratings have been in freefall since
peaking at a 7.0 average during the 2001-02 season. The show is
averaging just a 2.7 rating in the 18-49 demo this season, thanks in
large part to the network's decision to move it from Wednesday to the
Friday-night graveyard.
The show's audience also continues to age, never a good sign. Over the
past five seasons, its median age has climbed a full three years, from
49.2 to 52.2.
Presented with such data, executives at any network might conclude
that an unproven rookie couldn't possible do worse. Unfortunately, it
could. In fact, it happens all the time?even when replacing a
struggling rookie, as NBC itself learned this season. After pulling
the slumping Studio 60 on the Sunset Strip and dropping The Black
Donnellys in its slot in February, the network lost a full rating
point on Mondays at 10 p.m. ET and subsequently yanked Donnellys.
Even with flagging performance, a veteran show has the virtue of
providing a platform for launching a rookie. (Unless NBC moves Law &
Order from its 10 p.m. slot, the show has no value as a lead-in.) A
network might also pull a veteran from the schedule but hold it in
reserve should a rookie show flame out.
?Shows are like atheletes?
Perhaps the largest factor under consideration, however, is the
economics of a veteran show. Not only can the license fee of a hit
show double virtually overnight, but ownership of the show can
complicate negotiations as it ages.
That's how NBC wound up paying $13 million per episode to Warner Bros.
for ER at the show's height in 1998. The network pays closer to $8
million these days in a deal that goes through next season, but it
will have to evaluate that figure next year. As NBC's
second-highest-rated scripted show (behind Heroes) and a frequent
time-period winner on Thursdays at 10, ER could give Warner Bros. the
upper hand if ratings hold up and the network's fortunes don't
improve.
But paying big bucks for older shows that don't have much growth
potential is sometimes a necessity.
?Shows are like athletes,? says Fox's Beckman. ?Sometimes, you are
paying them when their best years are behind them.?
In this regard, Law & Order has its virtues. The show is produced by
NBC Universal Studios and is said to cost the network around $4
million to license. Already an economical production that emphasizes
formula over high-cost talent, the producers are negotiating to lower
production costs further.
In the end, though, NBC may simply decide that retiring Law & Order
and allowing it to live out its days in broadcast and cable
syndication is the best thing. When a show delivers ratings for as
long as Law & Order has, a network is happy to pony up. But
inevitably, the day of reckoning will come.
?Paying for success is not a problem,? says NBC's Manze. ?It's paying
for failure that is.?
.
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