Funny Business

September 25, 2012 World Screen
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PREMIUM: Elizabeth Guider reports on the increasingly lucrative business of selling comedy.

 

In the spring of 1994, American television was on a tear. Dramas like The X-Files; NYPD Blue; Murder, She Wrote; and Law & Order were riding high in the ratings and several promising pilots had just been greenlit to series. Warner Bros. had one of the strong contenders for the fall, with the succinct title ER, which foreign buyers began circling at the May Screenings.
 
One of the key customers was Britain’s Channel 4 (C4), and negotiations were proceeding apace. Jeffrey Schlesinger, the president of Warner Bros. International Television, tried to include another hopeful, an ensemble comedy with no stars and not much of a premise, in the deal for ER.
 
C4’s programmers declined to bite. Days passed. The channel’s bigger rival, the BBC, went ahead and snapped up the other hot U.S. medical show, Chicago Hope, so getting hold of ER became more imperative for the British commercial channel. Schlesinger sweetened his offer: C4 could snag the hour drama if the station also agreed to take his languishing comedy for what’s called “life of series.” The price: a modest $25,000 an episode for as long as the show would last. The British broadcaster continued to balk.
 
Eventually, however, C4 blinked, bagged ER and took the sitcom for a modest sum for one year. “It was the best negotiation I ever lost,” Schlesinger remembers, referring to the bullet he narrowly dodged by not insisting on locking in such a paltry price for what eventually became an iconic property.
 
In short, the comedy in question, Friends, went on to anchor NBC’s Thursday night lineup for a decade and prove that a red-hot and long-burning half-hour can be as much of an annuity as a great drama. In the U.K., the show clicked with young viewers, at one point airing on both C4 and Sky in a shared window and, as elsewhere around the globe, enjoying substantial ratings even in repeats. (In Pakistan Friends only just started its first run three years ago!)
 
“I would have left a lot on the table had customers opted for my proposed life-of-series deal,” Schlesinger recalls. “The key thing for such a show is that if it catches on at home and abroad, it’s a gift that keeps on giving.” (In the years after its launch, license fees for Friends abroad skyrocketed.)
 

THEN AND NOW
Flash forward almost 20 years and that lesson is ever more pertinent, what with changes in the media ecosystem contributing to a propitious market for a broader swathe of American half-hours. (Not to be chauvinistic; the Brits, too, can boast a few gems, which, thanks to DVDs and the Internet, also enjoy a robust afterlife.)
 
“I don’t think any of us at the time ever would have dreamed that there are still people now buying Monty Python DVDs,” muses one of that cult classic’s stars, Michael Palin. “And there are children of 9 or 10 who know the Spanish Inquisition sketch better than I do!”
 
Despite the lament at the beginning of the millennium that comedy on U.S. TV was dead (some darkly predicted that TV itself was headed to the junk heap), the genre Stateside is undergoing a renaissance. The range of what works is wider than ever, if one includes cable’s cache of offbeat or edgier fare like Louie, It’s Always Sunny in Philadelphia, Weeds and Californication.
 
Tom Kapinos, the creator of Californication, observes, “In this age of cable television, to have all these networks giving talented people a chance to do exactly what they want, you are going to get interesting results.”
 
The tone of much on the air these days has also shifted: it’s snippier, snarkier and less saccharine than before, reflecting, pundits suggest, a more cynical, unsentimental pop culture. For this fall, sitcom concepts are particularly high, or downright wacky—think Animal Practice, which stars a monkey, or The Neighbors, which features drippy aliens in a New Jersey suburb—and no subject is off-limits for skewering even in the broadest of family-oriented contenders.
 
Abroad, too, American-originated laughter echoes more loudly and across more social and geographical barriers. Everything from 30 Rock and The Big Bang Theory to Modern Family, The Middle and 2 Broke Girls has found receptive audiences, and not just in English-language territories.
 
The U.S. premium channels HBO and Showtime have made a mark overseas, too, albeit with sales to niche players that typically fork out less than their terrestrial brethren.
 
“There is a marketplace out there for quality and innovation,” says Charles Schreger, HBO’s president of programming sales. The cognoscenti abroad, he points out, are primed for the quirky cool of such shows as his current offerings—Girls, Veep and Eastbound & Down—even before they air. (HBO typically licenses its product via output deals, including a major one with Sky in the U.K.)
 
However, not everything in the comedy genre shifts into gear quickly or travels as well and as long as Friends, Seinfeld or Sex and the City did. Joining these élite perennials overseas is no easy task.
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FINDING THE BEST
“BSkyB is fortunate to have acquired comedies such as Modern Family, The Middle and Raising Hope, which are well written and well cast,” says Rebecca Segal, the Los Angeles-based senior VP of Sky networks and entertainment. “Our own originals have taken off this year and the acquired and homegrown fare are sitting wonderfully together. Given our high benchmark and what we have already, I’d say the new American dramas were much more must-haves this go-round than the comedies.”
 
Another local representative of a Continental broadcaster, who attended the L.A. Screenings along with the buyers from his European station, termed the sitcoms on offer “either derivative or one-dimensional.”
 
Most executives admit, in fact, that not every broadcast season boasts a sitcom that attains global hit status, but when one does, the upside is considerable.
 
“I’d agree the appetite overseas for American half-hours has improved,” says Marion Edwards, the president of international television at Twentieth Century Fox Television Distribution. The studio currently fields two dozen comedies, including a handful poised for this upcoming season, like The New Normal, from Glee’s executive producer Ryan Murphy, and Ben and Kate, plus FOX’s sophomore sizzler New Girl.
 
“For one thing, there are more channels to pitch to, some of them digital, some of them specifically targeted to such fare,” Edwards says. In an analogy to what Friends did for the appreciation of ensemble comedy, Edwards doesn’t underestimate the impact that The Simpsons had on the global market in goosing the appeal of adult animation.
 
Moreover, the growing horde of globalized hip young people share a similar funny bone, observes Keith LeGoy, the president of international distribution at Sony Pictures Television. “Thanks to the power and penetration of social media, American comedy resonates particularly well among those with this shared sensibility.” LeGoy, who is already having success placing one of his studio’s new comedies, Men at Work, on foreign schedules, also believes that the glum economic pall that persists around the world “heightens viewers’ desire to relax and laugh.”
 
All these reasons mean that distributors no longer shake their heads in dismay if their bag of goodies bound for MIPCOM is weighed down with comedies. Admittedly, they do not bring in the bacon that hour dramas do, but the best ones pull in revenues that are nothing to sneer at.
 
“I think the cliché still holds some water: comedy doesn’t travel as well as drama,” contends TV consultant Chuck Larsen, whose company, October Moon Television, represents producer- and profit-participation clients on studio-distribution deals. “After all, crime is crime, murder is murder—wherever.”
 
Larsen points out that certain half-hours do catch on abroad, Seinfeld and Everybody Loves Raymond among them, especially in English-language territories. The big bucks for sitcoms, though, are still to be culled from the domestic rerun market, which now incorporates license fees from local stations, cable channels and subscription video-on-demand players, as well as a cut of barter-advertising revenues from those outlets.
 
A couple of other independent sources offer up similar rules of thumb, stressing that specific prices are notoriously hard to track or to verify with the Hollywood heavyweights—unless one is in a courtroom where the wrangle is over royalties to the various profit participants.
 
In the U.S., A-list sitcoms can command between $5 million and $6 million an episode from their combined hauls (local stations, cable networks, Internet services), while dramas rake in at best about half that. Bill Carroll, the VP and director of programming at Katz Television Group, who advises station programmers on their deals for shows, says that the possibility for a breakout comedy on the networks is greater when there are a lot of shows being thrown at the wall, as it were, as is the case for this upcoming season.
 
“There’s seemingly an insatiable appetite for the reruns of blue-chip sitcoms from cable [networks] such as TBS, USA and FX,” Carroll also notes. License fees are eyebrow-raising for the latest perceived juggernauts, including rerun contracts for Mike & Molly and How I Met Your Mother (on FX) and for 2 Broke Girls (on TBS). Dramas typically repeat much less well in the States. Foreign is the obverse.
 

DRAMATIC HIGH
Whatever the economic ills in Europe and elsewhere, American dramas can pull in upwards of $2 million an episode from the international market, with two or three of them (the CSIs are likely in this rarefied sphere) commanding a whopping $2.2 million to $2.4 million an episode. A solid sitcom, by contrast, can laugh all the way to the bank with a take of $500,000 to $600,000 an episode, though standouts—think The Big Bang Theory and 2 Broke Girls—have purportedly topped the $1-million-an-episode hurdle.
 
“What does it take for sitcoms to do gangbusters abroad? I’d say they need to be ‘smart’ in tone, or universal in theme, or rely on physicality,” says Warner Bros.’ Schlesinger. He also points to the fact that the increasingly layered international media landscape, featuring more niche players, has thrown up new opportunities for multiple platform runs, additional rerun cycles, and more complex shared or staggered windows.
 
And in order to wring out the most money possible, it helps to be in prime time on key foreign broadcast grids. A few such series have managed the feat—right now writer-producer Chuck Lorre’s dynamic duo of Two and a Half Men and The Big Bang Theory are in prime time in 18 and 15 territories, respectively. (For that matter, Friends still airs in prime time in six countries.)
 
To be sure, not every year in American broadcast TV produces a bumper crop of hit shows, either dramas or sitcoms. This go-round, the tilt would seem to be toward a handful of strong newcomer dramas for the fall, all of which will come to Cannes with some deals already under their belts—Elementary, Vegas, The Following and Arrow among them.
 
Then there’s Charlie Sheen.
 

COMEDIC SHEEN
The actor’s latest effort, in which he arguably has his reputation as well as his wallet at stake, is the aptly titled Anger Management, which is being licensed by Lionsgate. The very fact that the actor boasts a cult following abroad speaks to the global cool factor that has to be taken into account when calculating potential perfor­mance internationally. (Charlie’s dad, Martin Sheen, has also signed on in a recurring role.)
 
“We’re really pleased with how well things are going,” says Peter Iacono, the managing director of international television at Lionsgate. “It’s one global culture out there, and that helps us. Plus, Sheen is really focused on making this project a worldwide success.”
 
As a mini-major, Lionsgate has made a name for itself coming up with novel approaches to production and distribution. In this case, the company has adopted the formula it used for the shows made with producer-entrepreneur Tyler Perry—the so-called 10/90 approach. After the first ten episodes of Anger Management performed well ratings-wise, FX in the U.S. commissioned 90 more to be delivered over three years, rather than the traditional four years.
 
“Our foreign partners have signed on for the life of the series, which could be 100 episodes or more,” Iacono says. “Having so many episodes gives broadcasters the advantage of knowing what they’ll be programming in whatever slot for four years. Plus, it’s a faster play than with a traditional sitcom of 22 episodes a year, and with an actor who clearly resonates.”
 
Iacono suggests that the sitcom is on track to achieve record international sales: “Anticipating the back-90 order, we set a target in excess of $1 million an episode.” Among the takers so far are Comedy Central in the U.K., TBS in Latin America, Bell Media’s CTV in Canada, Tele München in Germany, Nine Network in Australia and Viasat in Scandinavia. 
 
Unlike the major distributors, Lionsgate typically licenses its properties piecemeal, and, according to Iacono, benefits from individual attention to each series. (The company has had critical and financial success with other cult faves, such as Mad Men and Weeds, and believes there’s a growing appetite abroad for such alternative fare.)

GOING LOCAL
License fees are not the only revenue stream that U.S. distributors can count on from the exploitation of their comedies. Beginning with Sony’s pioneering efforts 15 years ago, a number of American sitcoms have been successfully formatted abroad, with Married…with Children, Who’s the Boss? and The Nanny three prime examples. These were followed more recently by localized variations on Everybody Loves Raymond, which LeGoy points out are ongoing hits in the Mideast and in Russia. Indeed, LeGoy notes that for the Russian edition, 100 additional episodes (beyond the original U.S. version) have been penned.
 
The revenues accruing to the original U.S. producer-supplier from such deals is hard to quantify. But the fact that other studios have jumped on the localized comedy bandwagon suggests that the returns are not negligible. LeGoy says that financial success depends on creating and sustaining a track record in translating “the feel and dynamic” of the original, while taking advantage of local talent and production styles. As a general rule, too, older sitcoms work best as format options because they boast a bank of scripts upon which to draw.
 
Occasionally, a local version of a show can go on to become an international hit of its own. NBC’s version of the BBC’s The Office has won critical kudos in the U.S. and collected sizeable coin from licensing abroad. Belinda Menendez, the president of NBCUniversal International Television Distribution and Universal Networks International, says it’s one of the company’s best sitcom sellers.
 
And just as with the sourcing of reality show concepts and ready-mades, translatable sitcom material is no longer derived solely from English-speaking territories.

CREATIVE WELLS
“There are many hotbeds of creativity nowadays,” declares Chris Coelen, the CEO of the Los Angeles-based Kinetic Content, which is backed by Germany’s ProSiebenSat.1 Media’s subsidiary Red Arrow. “Think Belgium, Turkey, Israel, Japan, to name only a few.” 
 
In fact, one of Kinetic’s latest offbeat imports was scooped up from Belgium and reimagined for NBC in the U.S. as Betty White’s Off Their Rockers.
 
“What we did was take the Belgians’ basic, easy-to-grasp sketch concept and try to make it bigger, bolder, with more connections among the segments—and we managed to entice Betty White!” Coelen says.
 
Coelen and others contend that nothing like this could have happened a decade ago in the international business. “The world is in many ways getting smaller and more sophisticated in its tastes,” he says. “Shows, even oddities, have more resonance, and travel further. Broadcasters are as ever still hesitant when it comes to taking big bets, but there’s no doubt that everybody is excited about creative collaboration across borders.”