Jon Feltheimer

This interview originally appeared in the MIPTV 2013 issue of World Screen.

 

Among its numerous critically acclaimed series, Lionsgate produces the multi-Emmy Award-winning Mad Men, the show that ushered in a new standard for stylish, sexy and provocative drama series. The studio, headed by co-chairman and CEO Jon Feltheimer, has also created some of the most creative business models in the TV industry.

 

WS: What innovative ways did you use to piece together various business partners to finance Mad Men?

FELTHEIMER: We focused on cable programming from our inception because this was a growing market that was relatively underserved by the major studios. Cable audiences are typically smaller than broadcast audiences, so, in order to build a more profitable business model, we aggregated eyeballs across multiple platforms and orchestrated windows that served the needs of all of our partners.

 

As part of this process, we’ve been aggressive about identifying windows on digital and traditional platforms alike. Our economic calculus on Mad Men includes not only a very generous license fee from AMC but revenue from international sales, DVD, on-demand platforms like iTunes and Amazon and a unique syndication deal with Netflix. Most people don’t realize that Mad Men will generate approximately $150 million in home-entertainment revenue alone. The new paradigm in today’s entertainment marketplace is being innovative in extracting maximum value from audiences that are divided into smaller and smaller market segments but generate greater revenue overall as demand for content continues to grow.

 

WS: How have you been improving your TV financing model?

FELTHEIMER: We’ve been diversifying our model as we create and deliver programming to a growing spectrum of traditional and digital buyers. For example, we’re partnered with ABC to mitigate risk in producing Nashville, but in success the upside will include music revenue from soundtracks, concert tours and merchandising. Digital tracks from the show have already sold nearly 1.5 million downloads to date.

 

We’ve pioneered a different approach for shows incorporating our 10+90 model, where networks pay slightly lower license fees while we achieve the benefits of unprecedented orders of 100 episodes up front and an accelerated path to syndication. A show starring George Lopez and another show with the “odd couple” pairing of Martin Lawrence and Kelsey Grammer are next up in our pipeline of programming using the 10+90 model.

 

We have still another business model for Orange Is the New Black that we’re producing for Netflix, which needs to create unique windows for its domestic and international audiences and will make all 13 episodes of the first season available simultaneously in the spring.

 

Our approach to cable shows like Mad Men, Weeds and Nurse Jackie is to build a profitable business model by aggregating eyeballs across multiple platforms.

 

The common thread is that we’re always focused on mitigating risk while positioning ourselves to capitalize on upside in success, and we’re always looking for ways to monetize our content on emerging platforms. In other words, we take the risk out of the financial side so we can be more daring on the creative side.

 

WS: Tell us about Lionsgate’s relationship with Charlie Sheen.

FELTHEIMER: Charlie Sheen is one of the comedy superstars of our generation and his track record over ten years of shows like Two and a Half Men and Spin City speaks for itself. Anger Management is an example of our willingness to take a little more overall risk for what we consider to be significant upside.

 

In terms of finding the right vehicle for Charlie, all the pieces came together. We had longstanding relationships with [the producer] Joe Roth, and Charlie’s manager, Mark Burg. Bruce Helford is a great showrunner. We loved the Anger Management concept, and it was tailor made for our 10+90 business model. Finally, we found the ideal network partner in FX.

 

Bringing Charlie on board was a collaborative effort involving Kevin Beggs and Sandra Stern, who run our TV group, Ira Bernstein and Mort Marcus at Debmar-Mercury, and me. I met with Charlie and told him about the concept and his response was, “Dude, it’s already been done. It was a movie.” When I explained to him that we wanted to do a TV series, he loved the idea.