Ryan Kavanaugh Talks Scripted TV Expansion

CANNES: In Cannes to deliver a MIPCOM keynote, Relativity Media CEO Ryan Kavanaugh met with World Screen to talk about the studio's scripted TV efforts, which kick off with the Nat Geo Channel commission Act of Valor.

This week, Relativity Media announced its first two scripted TV projects, both based on feature films from the studio: Act of Valor and Limitless.

"We are more known as a film company," Kavanaugh says of the studio, even though it has nearly 30 unscripted shows on the air across 19 networks. For the last few years, he notes, Relativity has been looking for the right scripted TV model.

"One of the things we've always done is find the inefficiencies that exist in a 100-year-old studio system and try and effectively change the model. That's what we did in film. One of the issues we had as we looked at the scripted television model was, there were really three ways people were doing it. You spend millions of dollars on a pilot and you throw it on the air and it doesn't work and then you've wasted millions of dollars plus advertising. You skip the pilot and make ten episodes and spend tens of millions of dollars and if it doesn't work then you cancel. Or you go to some third party to try and write that check and they lose tens of millions of dollars. With the TV model you don't have data, so you're just taking effectively unlimited risk. Even on the [scripted shows] that work, you take so many years to start making money. It was a model that was extremely hard to crack."

Interestingly, it was the company's success with Catfish: The TV Show, based on the doc feature Catfish, that provided the insight the company needed to develop a scripted model it was happy with.

"One of the things that frustrated me a lot when movies would come out that didn't quite perform, it seemed like more people would tell me they loved those movies than the ones that performed. When Catfish the movie came out it did $3 million—we didn't lose money but it wasn't the success we wanted it to be. I was hearing, I saw Catfish, I loved it. It wasn't actors or directors. It was 15- to 23-year-olds. I had this epiphany. Movies are made for a broad spectrum. You spend tens of millions marketing, so if you only hit a small segment, they might love it, but that correlates to a number that doesn't really make sense in the movie business. When you translate that to TV, it becomes a very interesting model. I can look at any movie now, and from the exit polling, the research, we have 15 times the data on movies as any pilot would ever have. I know what audiences liked, what they didn't like, almost scene by scene, what characters they liked, was it too dark, too light, I know the exit polls by age range, by demographic, by genre. Movies are the greatest pilots ever known. We've got the story line, we know what the audience wants, we know what we can change to make it better. The first episode [of Catfish: The TV Show] had 2.7 million viewers. There were 6 or 7 million people that invested in the franchise and a third of them liked it enough to continue on with television. That's what led to Limitless and Act of Valor. Limitless has 20 million people invested in the franchise. We can take all the data [we have from the feature] and drive a series with millions in marketing already spent on the brand."

The goal, Kavanaugh says, is to make five to six scripted projects every year. International co-productions may be part of the Relativity model, but they're not essential, Kavanaugh says.

"Normally in this model when you're going to a network or a cabler or a co-financier, you're saying, We'll put in half, you'll put in half. Because we already spent $50 million, $60 million, $70 million on worldwide marketing, because the brand already has value, we believe that our contribution of the IP is equal to or greater than a 50-percent contribution. The movie has already covered its risk. We're contributing value, they put up the cash, it becomes a partnership where we don't need the international co-productions. Having said that, international co-productions makes it more profitable for everyone, so if we can do them and it makes sense and it doesn't hurt the content, then we'll do them."

Kavanaugh also explained to World Screen his "Theory of Everything," in response to rapidly changing consumer viewing habits.

"TV Everywhere, it's not about if it's coming, it's not about if the cord is being cut, it's right here. 9 percent of homes have never paid for television in the U.S. 11 percent have cut the cord. So 20 percent of the U.S. audience is already off of those boxes. 45 percent of Americans say that they think cable and satellite are too expensive. Every study says 30 percent of the current subscribing audience is at risk of turning it off. Netflix, half of their audience doesn't pay for any other form of television. The writing is on the wall. We have 10-plus movies a year, 30 series on the air, we're the second-largest sports agency, we've been putting out 5-10 hours of original sports content every week, we have a music business, we own a fashion agency. We've set ourselves up to be what we believe is the only place that has created a 360-degree content platform. People are having to go to numerous places [to consume content.] We're setting up a 'theory of everything,’ which is one screen, you've got it all. Your movies, your TV, your scripted, your unscripted, your sports programming, fashion programming, horror programming. We think no one else is ready to do this."

You can watch Kavanaugh's keynote here.