PASADENA, California — Between delayed-viewing, binge-watching and streaming, the TV industry is experiencing seismic shifts. As network presidents unveiled their plans for the coming year over the past two weeks (at the Television Critics Association press tour) many of our predictions for how television can save itself in 2014 are already becoming a reality.
“I think you’re just watching the difficult throes of an ecosystem in the process of evolution,” said FX Networks CEO John Landgraf.
Here are six ways in which television is changing forever:
1. Networks are embracing the “limited series” cable model
After largely abandoning the miniseries/limited series format over the last decade, the networks are returning to it in a big way, committing to several series with smaller episode orders than broadcast’s standard 22 shows per season. On Sunday, NBC announced a 10-episode order for Emerald City, a modern-day reboot of L. Frank Baum’s Oz books, while CBS is doing Dovekeepers, a four-hour miniseries based on Alice Hoffman’s historical novel. Meanwhile, FOX has Wayward Pines from M. Night Shaymalan and Gracepoint, an adaption of the hit British TV drama Broadchurch.
“I’m excited we’re all back in this form again,” said Robert Greenblatt, chairman of NBC Entertainment, “because there’s certain stories that are shorter in length or closed-ended that otherwise wouldn’t be made a couple of years ago.”
More importantly, networks have figured out how to turn a profit on these shorter runs, following the model that CBS used with last summer’s Under the Dome. “We’ve shown with Under the Dome there are innovative ways to finance event-type programs,” said CBS Entertainment President Nina Tassler, who signed an exclusive streaming deal with Amazon Prime for Dome and also sold the series internationally. “It’s really about creating new economic models.”
And those shorter orders are also being extended to series that fall outside the “limited series” classification. The new Ichabod Crane thriller Sleepy Hollow was a breakout fall hit for FOX, but FOX Entertainment Chairman Kevin Reilly capped the season at 13 episodes—a typical order for a cable season—instead of the usual 22.
“Many dramas are just better creatively on a shorter-order pattern,” said Reilly, especially “mythological” ones like Hollow that have a more difficult time sustaining plot and story and creative momentum during a standard episode order. “When you’re doing 13, you just feel like you’ve got a little bit more control of the ship.”
2. Pilot season is not dead—yet
For decades, broadcast networks have had the same approach to developing new shows: create “pilot episodes” of the 20-30 shows in contention for slots on next season’s schedule to determine which shows actually made the cut. Those decisions are announced to advertisers and the press during “upfront” sessions in May, in which advertisers can buy ad time several months in advance of the upcoming season.
Last week, FOX announced the death of pilot season, with Reilly explaining that “it’s highly inefficient” and “built for a different era” when CBS, ABC and NBC were the only three networks in existence. Instead, Reilly has already picked up several projects “straight to series” for next season, bypassing the usual pilot process so as not to waste resources on projects that will never make it to air.
Yet the other networks were quick to declare that while the business is indeed changing, pilot season is still very useful for them. “It’s frustrating, but also exciting,” said CBS’s Tassler, who noted that pilot season’s “compression of time”—in which pilots are cast, shot and focus-tested in a matter of weeks—gives way to “this creative adrenaline” that has delivered their biggest hits, like The Big Bang Theory. NBC’s Greenblatt noted that his network’s new hit The Blacklist “probably would never have seen the air had we not made a pilot, because it came from a relatively young, inexperienced writer. We weren’t exactly sure immediately from that script that we should order a series.”
The bigger problem, admitted Greenblatt, is this: “Casting is the worst part of pilot season,” because of the frustration of trying to cast 100 pilots simultaneously from the same talent pool. Because of that, many of the networks are following FOX’s lead and making at least a few “straight to series” commitments, which allow them to cast outside of pilot season when there is less of a frenzy for the best available talent.
3. Advertising buys will extend because of delayed viewing
Audiences are taking longer and longer to catch up with shows via DVR and VOD, but most advertising is still being sold as “live plus 3” (L+3, which factors in DVR and VOD use over a three-day period in addition to the initial “live” tune-in). Because of that, “the biggest challenge I think we face is lost ad sales revenue, said FX’s Landgraf. “We, and other channels, are losing as much as 40% of ad sales revenue on some of our most valuable series.” For example, 2 million of the 5 million adults, age 18-49, who watch FX’s Sons of Anarchy live plus 7 (L+7) are not counted by advertisers, who are presently only paying for L+3. “That’s a lot of lost revenue for a show that’s very expensive to make,” said Landgraf of Sons, which costs an estimated $2.5-$3 million per episode.
That needs to change, ASAP. “The standard Nielsen measurement is unfortunately outdated, and it is a mere fraction of the television viewing universe,” said Reilly. Some networks, led by CBS Chairman and CEO Leslie Moonves, are now pushing for “live plus 30” to become the new standard. Advertisers are still pushing back—after all, it would result in higher rates for them, plus they are concerned about buying 30 days worth of advertising time to promote, say, a new theatrical release that will likely be out of theaters in a month—but CBS’s Tassler expects things will change soon, especially if they want to stay in business with her number-one-rated network: “There’s a song in Damn Yankees that said, ‘Whatever Lola wants, Lola gets.’ So whatever Leslie wants, Leslie gets.
4. Patience is suddenly a virtue
Because of the considerable lifts in ratings when delayed viewing numbers are factored in, “television has turned into the Florida recount,” said ABC’s Lee. “You think somebody’s won on Monday, and by Friday somebody else has actually won.” That has resulted in networks being more patient with low-rated shows that in previous years would have been given a quick hook.
And in the long run, being more patient with shows means “we don’t have to launch as many,” said Lee, whose ABC routinely introduces more new shows per season than the other broadcast networks.
Because FOX made several early commitments to series and will have most of the episodes shot before the seasons begin to air, “we’re going to almost be more incentivized to keep them on,” explained FOX’s Reilly. During the traditional shooting schedule when shows are shooting an episode only a few weeks ahead of its air date, “when you pull the plug on something, you can often save money on it,” because episodes later in the season haven’t yet been filmed. But when all 13 episodes of a show have been shot in advance, said Reilly, “we’re going to have a very big financial headache” if those episodes don’t air.
5. The broadcast networks are no longer taking summer vacations
For several years, even as broadcasters insisted that they program year-round, they used summer as a dumping ground for repeats, reality shows, Canadian series imports and the chance to burn off episodes of now-canceled shows that were pulled from the schedule months earlier in the season. Cable had the summer to itself until CBS debuted its limited series Under the Dome last June, which became the highest-rated scripted summer series in 21 years.
Now, summer is suddenly highly-coveted territory. “Coming up with those big summer blockbuster stories is really the way to go,” said CBS’s Tassler, who is doubling down this summer, airing another season of Under the Dome along with Extant, a new science-fiction limited series from Steven Spielberg, starring Halle Berry. FOX is using the summer for its 24 return, 24: Live Another Day, along with new series Gang Related. As FOX’s Reilly pointed out, “it’s a fallacy that we’ve perpetuated” that ad rates drop in the summer, which was one excuse broadcasters had long given for bypassing summer programming. In truth, said Reilly, “there’s plenty of revenue to book over the summer.”
6. Streaming is here to stay
As the networks continue to fight over in-season stacking rights (streaming/VOD rights to the current entire season of a show), they are in agreement that streaming is an indispensible part of keeping viewers hooked on their shows. “Weirdly, it’s almost a better and more engaged viewing experience,” said FOX’s Reilly, explaining that 60% of viewers who start streaming a FOX show on Hulu end up completing that episode, a number “much higher than you would see in any sort of channel-surfing environment.”
Yet while streaming is here to stay, to what extent remains an ongoing debate. “All of us are grappling with how many episodes to have available on demand and how many episodes we put on Hulu and how long we withhold episodes until the following week’s episodes airs,” said NBC’s Greenblatt. “All very complicated issues that are in discussion every day. I think in six months it will probably be different than it is right now.”
By which point, we’ll likely have another six ways that TV has changed forever.