Binge Factor

This article originally appeared in the MIPCOM 2013 issue of World Screen.

Broadcasters, producers and distributors weigh in on how the phenomenon of binge viewing is changing the ways shows are made, scheduled and sold.

Eons ago, a little movie called Crash snagged the Oscar for Best Picture. Then, its backers decided to transform the film into a TV series. Unfortunately, the latter, well, crashed. And therein lies a tale.

Peter Iacono, the managing director of international television at Lionsgate, the company behind Crash, believes that the failure of the small-screen version to connect with viewers had much to do

with viewer habits— namely, the fact that six years ago binge viewing was not a common thing.

“Like the movie, the TV show had crisscrossing plot lines and complex characters,” Iacono says. “Nowadays, consumers have many more chances to absorb such series in one go. The show was like a 13-episode movie, but without the ability to take it in all in one gulp, it lost momentum.”

Much has changed technologically and culturally since that feature film and its small-screen spin-off. Iacono is now handling assorted distribution rights on Orange Is the New Black, which had its SVOD premiere this summer on Netflix. Such series are “dropped” in their entirety day-and-date, in the U.S., and in territories where the download service has established localized platforms (in Canada, Latin America, the U.K. and several other European countries).

“The evolution of technology and the change in viewing patterns in such a short span is amazing,” Iacono believes. “The ability to watch content, almost movie-like, has freed up new ways to tell stories and develop characters.” As for the concomitant complication of more windows (and in some cases lower license fees for each one of them) Iacono is adamant that the greater slicing and dicing is a plus for program providers.

“It’s an ‘and,’ not an ‘or,’” he maintains. “The on-demand windows have opened up opportunities, just the way stripped sales of reruns [for shows that air, for example, Monday through Friday in the same time slot] did decades ago in domestic syndication.”

As juggernaut procedurals like the CSI franchise (still a substantial money-spinner for broadcaster and rights holder CBS) inevitably wind down, and the Netflixes, Amazons, Googles, Apples, Aereos, Hulus and localized imitators thereof abroad gather steam, expect to see a broadened resurgence of open-ended, intricately plotted, serialized shows enticing new audiences.

Over the last decade, cable has upped the creative ante, but old-school free-to-air broadcasters are now quickly taking a page from their book and, seemingly overnight, online upstarts are trying their hands at fiction.

Peter Tortorici, a longtime network programming topper and now CEO of GroupM Entertainment, sees the changes as positive ones, not as the end of the world as we know it. A death-knell for the Holly­wood heavyweights? Not a chance, he says.

NETWORK DOLLARS
“It struck me yet again at the network Upfront presentations how staggering the amount of money invested in original content is,” Tortorici says. “But staggering, too, is how high the quality is.” If the piloting process is ever cumbersome and costly, the few hits that emerge each season continue to pay off. “Doing all this is not a science; it’s an art,” Tortorici believes—and if there were an easier formula, “they probably would have found it,” he adds.

Moreover, it’s hard to do at any price point, as Tortorici suspects newcomers like Netflix will soon discover. Despite all the buzz about digital newcomers, “big media companies are, in my view, well positioned to continue to thrive.”

Still, under the greater pressure to entice and hold on to viewers, broadcasters are stepping up their game. “Don’t clone, take chances” is the new directive from high up in Hollywood’s executive suites.

Joe Weisberg and Joel Fields, the executive producers behind the FX hit The Americans, concur that network suits are taking “bigger swings” and supporting “riskier” material. “They’re telling us (producers) to ‘make it interesting.’ If we envision a 7-minute dialogue scene, they’re saying ‘go for it.’”

Adds Kevin Lygo, ITV Studios’ managing director, “What [binge viewing] can do for writers is allow them to have more complicated stories, because as a viewer you don’t have to hold it all in your head for a week anymore. You can be more subtle. You can have more variations of tone. Cliffhangers don’t necessarily have to be at the end of an episode.”

For program distributors, too, the more bracing air sweeping through town is invigorating, suggests Marion Edwards, the president of international television at Twentieth Century Fox Television Distribution.

“There’s a sense of excitement as limited series, soaps like Scandal and Nashville and complicated story lines like that of The Americans come back into vogue,” she explains.

Asked what this means for her division, Edwards similarly puts the accent on the upbeat. “We get to license to new players popping up everywhere, and, [while] that entails a revamped business model and more windowing, we’re in a good place.” The trick, she continues, is “to keep the media ecosystem intact, and allow all its parts to thrive.”

DEMANDING CASH
As for revenues being generated by content providers from the carving-out of these new windows, hard-and-fast figures are elusive. A couple of research sources hazarded that the on-demand services in the U.S. were likely forking out between $1.5 billion and $2 billion for program rights per annum, and foreign stations are shelling out “not much less than that” on a yearly basis for those same rights in their territories. (Indicative, too, is the fact that the Hollywood majors’ trade organization, the Motion Picture Association of America, now tracks “digital” revenues accruing to their members as well as those from free and pay deals around the world.)

“Extremely valuable” is how Jeffrey Schlesinger, the president of Warner Bros. Worldwide Television Distribution, describes the worth to his own company of the digital windows that have opened Stateside and abroad for his dramas.

Among the latest crop of serialized contenders to debut this fall is a reversioned Israeli format he is handling from the Jerry Bruckheimer stable called Hostages.

What will be a telling milestone, Schlesinger suggests, is when one of the SVOD players abroad steps up to license the first exhibition window of such a show, rather than allowing that prerogative to remain with an established over-the-air broadcaster. For last year’s newcomer Revolution, there was “vibrant bidding” in Britain, the Warner Bros. exec says, from upstart online players. (The J.J. Abrams series eventually landed with “linear” player Sky in a deal last December.)

As for Hostages, it will air in the U.S. on CBS, the network that has built its current success on the backs of procedurals like CSI and NCIS, but which recently rejigged its 10 p.m. Monday night slot for limited serialized dramas, beginning with this summer’s 13-part suspense series Under the Dome. Hostages will take over the time slot in the fall, to be followed by another action series called Intelligence come midseason.

GETTING SERIAL
Procedurals, Schlesinger notes, continue to repeat well in domestic (as well as foreign) syndication, but serialized dramas are siphoning considerable revenues from over-the-top platforms. However, the trend toward binge viewing didn’t happen overnight. Brad Adgate, the senior VP of research at Horizon Media, points out that U.S. cable channels have been staging catch-up marathons for their hit shows for a decade. Even before that, folks rushed out to buy boxed DVD sets to consume at home and then shelve. What’s changed, the longtime advertising researcher explains, is how—“finally,” he emphasizes—over-the-air broadcasters have caught on to the idea.

“The broadcasters are finding that this is a financially sensible strategy that allows them to tackle more complex material,” Adgate says. He points to CBS’s experiment with Under the Dome and its lucrative (purportedly $750,000 an episode) post-broadcast replay on Amazon four days later. “Such shows lend themselves to binge viewing, and to the extent that that encourages more adventurous fare—and more originals, fewer repeats—broadcasters become winners. Advertisers too,” he contends.

WINDS OF CHANGE
Since arguably nothing happens in television overnight, one could reasonably posit three inflection points in the development of alternative viewing options. The first came in 2000. Hearing the buzz about a tour-de-force performance by Kiefer Sutherland, people ordered the first season of 24 from their local Blockbuster in droves, and many became hooked, subsequently tuning in to FOX for the next seven seasons. In 2007, video-rental-chain customers started turning in their membership cards as they signed up for online platforms like Netflix. During long breaks between seasons of cable hits like Breaking Bad and Mad Men, streaming of prior episodes on newish digital platforms enthralled viewers who had missed out on the watercooler chat, or who wanted to have their memories refreshed and primed. Then, this year saw a string of high-profile binge-viewing options, beginning with Netflix’s House of Cards. Like cable networks before them, SVOD operators are funding and/or producing originals of their own, both to better brand their services and to build their own libraries. The David Fincher-led House of Cards, which dropped onto Netflix’s lineup earlier this year, brought an unspecified tranche of new viewers to the site. Although the service jealously guards its ratings numbers, the downloading service now touts more than 37 million subscribers worldwide and its stock has rebounded 200 percent since a pricing kerfuffle two years ago.

Per a recent Harris Interactive poll, nearly eight in ten Americans (78 percent) have utilized technologies that allow for viewing on one’s own schedule, with the top methods being on-demand services, TiVo, DVRs or other recording devices, Netflix streaming services, purchasing, renting or borrowing episodes or seasons on DVD, and Hulu/Hulu Plus, in that order of frequency. Of those who do so, more than six in ten (62 percent) consume multiple episodes of a single TV show at a time. For the report, 2,496 adults were surveyed online last February.

To paraphrase the Sinatra classic, viewers, especially younger ones, are increasingly “doing it their way.” As a result, they’re causing producers and distributors to rethink how best to take advantage of this new wrinkle in watching content.

Take Gaumont International Tele­vision, which handles various rights on another Netflix-originated title, Hemlock Grove. Treating the show just like any other major property, CEO Katie O’Connell and her team shepherded stars and producers of that series to MIPTV, and in the wake of its season two pickup, clinched its first major European territory deal—in Germany with Tele München.

AN EVOLVING MARKET
“The deals are all an adventure with everything evolving so quickly,” O’Connell says. Her mantra: be flexible, be nimble, and take nothing for granted in how windows have to be arrayed. That open-minded approach applies equally to how certain serialized shows are getting made.

Hemlock Grove’s executive producer, noted horror moviemaker Eli Roth, says he altered his editing process because of the ability of viewers to binge. “There was a lot of violence in the first episode, which I directed, and we realized that too much violence affected the second episode, in which the big moment is the werewolf transformation and you don’t want to take away from that. And suddenly you realize that something in episode five should have been better set up in episode two. A lot of stuff goes back and gets reshot to clarify other things. Because nothing has aired, you can edit it in. We could go back and tweak. We looked at it like a 13-hour movie, knowing that people were going to watch three or four at a time.”

That Netflix, which five years ago simply mailed discs in red envelopes to customers via the U.S. Post Office, garnered 14 Emmy nominations this year says something not only about the pace of change, but that the creation of good content is not the sole purview of the usual small-screen suspects.

The majority of television executives don’t believe that the linear model is broken, at least not for now, but they readily admit they’ve got to keep a watchful eye out for the likes of Netflix and other similar digital platforms.

In this larger context, binge-viewing options are part of a disruptive wave washing over the media beach and spawning innovative ways to create, deliver and consume content—whether the change agents are behemoths from Silicon Valley, tech and telco outliers like Intel and AT&T or wily iconoclasts like Barry Diller. All have put traditional players in the TV space on guard.

Apple, which has already upended the music business, is angling to introduce its own branded TV set; Google is courting content suppliers to let it make their shows more visible online via first-window deals and Diller is rolling out, of all things, an antenna-intensive service called Aereo, which beams broadcast/cable signals without bothering to pay those pesky carriage fees to the providers. (The established broadcasters don’t have their heads in the sand—lawsuits are popping up all over the place.)

100-PAGE CONTRACTS
Abroad, staying abreast of these tussles in the U.S. and attuned to changing consumer dynamics locally are two things to which national broadcasters are devoting more effort.

Rüdiger Böss, the senior VP of group programming acquisitions for Germany’s powerful ProSiebenSat.1 Media, believes it is important both to continue to provide the “easily watchable” procedurals for his company’s free services, and to “make TV interesting for the next generation.”

In that latter regard, he explains, “We are offering various ways that viewers can catch up on or preview or binge on series, especially these more serialized ones,” including both ad-supported and subscription options (MyVideo and maxdome among them). “Naturally, too, we are fighting for these SVOD/VOD rights with the Hollywood studios,” each of which, he points out, has a different strategy regarding avails, holdbacks and exclusivities.

The complications of doing such digital-inclusive deals, Böss says, now mean that what used to be a ten-page contract for free-TV rights alone is now a 100-page document covering all kinds of options.

But, Böss hardly minds. “In the end, I’m believing in the new way and offering viewers more ways to watch and appreciate shows.” The only thing he would urge Hollywood studios to do is not leave viewers dangling or exasperated. “If one of these complex series starts to falter, then at least they should pressure producers to tie up the key loose ends [before the show gets canceled]. They should have a Plan B.”

From a somewhat different perspective, longtime TV2 Norway acquisitions head John Ranelagh is frank about the challenges facing established players if they are slow to keep up with the times.

“Broadcasters and networks need to maintain their traditional linear schedules, but they also need to cater to new habits by being present everywhere and offering a full range of viewing choices, even if questions about monetizing the new approaches are as yet unanswered. If networks do not fill space, someone else will—and at their expense, as Netflix, Amazon, Hulu, YouTube and the like are all demonstrating.”

The quickened pace of change, behavioral as well as technological, is imposing additional problems and costs.

COST OF DOING BUSINESS
While most well-heeled European broadcasters now operate multiple niche channels, Ranelagh notes that more and more resources have to be allotted for national and local production. However well-made and broadly appealing they may be, American shows have two drawbacks: increasingly, he argues, they are produced by the sister studios of the network (thus presumably limiting, if not stifling, outside talent and creativity) and secondly, the best shows are popping up (pirated or otherwise platformed) almost instantly in Europe after their U.S. premieres, thus diminishing their long-term appeal.

Jeff Ford, who uniquely headed acquisitions teams at Britain’s top three commercial broadcasters (ITV, Channel 4 and Channel 5) and is now director of content at Ireland’s TV3, takes the long view of the latest developments. There are, he says, reasons he’s not overly worried.

“Each new bit of technology changes the game board, and yes, prior windows can devalue your own rights in a given case,” Ford admits. But, he emphasizes, there are opportunities for broadcasters like his. For one thing, his station is finding that “stacking” older episodes of a series so that viewers can feast on a particular show on a given day is quite a popular tactic. (Such stunts have worked with The Big Bang Theory and CSI, among others.)

“It’s a way to shift catch-up from an online to a linear environment and expand the viewer experience,” Ford says.

CREATIVE SHIFTS
The disruptions in the business and the digital advances have not escaped the creatives behind the camera and in the writers’ rooms.

The executive producers of the FX series The Americans, Weisberg and Fields, say what’s really changed for them in this new environment is “the visceral, almost instantaneous feedback and involvement” they get from viewers via social media and the like. “It used to be that we’d get a couple of reviews after a series’ premiere and then, well, just a cold set of ratings on a regular basis,” Weisberg explains. “Nowadays,” continues Fields, whose background is in theater, “we can follow Twitter feeds, and what we learn from how viewers and fans and critics are reacting we often bring up in the writers’ room.”

Adds Nick Hamm, the executive producer of yet another serialized drama, Rogue, which airs in the U.S. on DIRECTV, “There’s been a massive explosion in high-level drama in America,” and not by chance. “It’s because you’ve had a complete fracturing of traditional distribution, so people don’t watch television in the same way as they used to ten years ago. Appointment television is almost finished as an idea; network television is almost finished as an idea. The broadcasters will be the Internet; the broadcasters will be your app and they will be on your phone. That’s made material available in a completely different way. It’s like a great book: if you want to keep reading it, you’re going to keep reading it. Now you’ve got the opportunity to do that.”