Mark Kaner

President
Twentieth Century Fox Television Distribution

Mark Kaner has a unique perspective on the international television business. He hears firsthand the programming needs of broadcasters large and small around the world. He keeps abreast of what TV series and feature films a major Hollywood studio is developing and producing. And with years of experience under his belt, he can easily spot challenges and opportunities ahead. Kaner talks about the industry he enjoys so much in this exclusive interview.

WS: Given this economic downturn, what are you hearing from buyers? With whatever budgets they have available, what are they interested in buying?
KANER: Virtually everyone is concerned in varying degrees about the global economic downturn. Advertising revenues across Central and Eastern Europe are down between 10 percent and 50 percent depending on who you talk to and which country you are referencing. The buyers with whom we spoke seemed quite interested in both the dramas and comedies we pitched, so I’m not so sure that has changed, although I do think serialized procedural shows will be harder to sell because there is only so much time people can commit and there are a lot of good ones already out there.

WS: Is it true that as programming budgets get cut, broadcasters are cutting down on their own productions and acquiring more finished product?
KANER: Yes, of course, but it has always been about "balance." Every broadcaster has to balance its budget between what it can afford to internally develop and produce and what it will need to acquire to fill its schedule. During better economic times, one can take greater risk on home-grown production, but finished proven product is more likely a more prudent choice when the economy is fragile.

WS: How is the business model for producing one-hour dramas changing?
KANER: I think the business model for our business as a whole is changing…. We simply cannot sustain the current cost of production. We are not manufacturing cases of Coca-Cola. Every show, every episode, every feature is completely different and by its very nature, we are in a business that will fail much more than it will succeed. Now that U.S. prime-time hours regularly cost between $3 million and $4 million an episode the cost of failure is more than just frightening, it can be deadly. We need to change the way we share the risk. Everyone is going to have a greater share in both the upside and the downside. When that happens then everyone will be incentivised to make things for less because the money will be coming out of everyone’s pocket…

WS: What impact will NBC’s decision to give its 10 o’clock slot to Jay Leno have on one-hour dramas? Will innovative, risk-taking dramas increasingly find homes on cable channels, rather than on the broadcast networks?
KANER: I don’t think there is any question that broadcast networks, which have traditionally tried to reach the broadest audience, have had to temper their tastes to get broad appeal. Years ago they called it the LOP theory… Least Objectionable Programming was what networks were forced to develop and broadcast. Along came cable, which you had to pay for and those channels could take greater risk and target an audience. But they fail just like the broadcasters even when you could argue they are being more innovative and offering talent the chance to make great programming. Sometimes (many times) you fail. But there are so many things we can be proud of and that is not only the cable arena. I can list a ton of stuff!

WS: We’ve heard from companies like Endemol and FremantleMedia who said that the studios had missed the opportunity to get into the local-language production and format business. How do you react to that statement?
KANER: Both FremantleMedia and Endemol are excellent companies and have done great work in these areas. I think they did get a head start on local-language production and the format business. After all, they are locally based and could see firsthand the gaps in each market and hired local people to create content to satisfy the local viewer. To say, however, that the U.S. studios have missed the boat entirely is an overstatement from my perspective. First of all, most of our clients looked to us (the U.S. studios) to provide them with high quality, big-budget prime-time programming that was made for the major U.S. networks and cable outlets. They actually didn’t want us in their own backyard producing local-language programming because they could get that from lots of other providers. However, as the global business has matured around the world, our biggest marketplace opponents are no longer other big U.S. studios. It is locally produced programming, made with substantial budgets by very talented indigenous producers, directors and writers that have become our real competitors. So we must and can compete at every level and it will be to our advantage to do so. In fact, we have no choice. We must adapt or die.

WS: What strengths do the studios have over companies like Endemol and FremantleMedia?
KANER: I’m not sure you can say we have greater strengths all the time. I do think this business is always about the people, and at the end of the day, we still have a lot of very talented people who love this industry and love to create new and innovative programming. We have to compete at home in an enormous marketplace with very high stakes. Competition brings out the best in people and we have a very broad landscape on which to perform. The melting pot of people and cultures that make up the United States is enormous, so it is a fantastic testing ground. Anybody can make it to the top with a great idea. We have lots of people and lots of ideas!

WS: What are the major challenges the TV divisions of the studios are facing?
KANER: Piracy and the cost of production are the biggest industry challenges… The TV divisions have that and also have an incredibly fragmented universe where they need to find a way to be relevant. The choice people have is overwhelming in many ways. In that kind of environment, how do you break out and scream "I’m special! Watch me!" Just getting someone’s attention is a struggle sometimes and then you had better be delivering something damn good because it’s harder than ever to get a second chance.

Having said all that, it’s still great fun and we need to remember that it’s only entertainment.