U.S. Cable Channels Continue to Churn Out Hits

Just a few years ago, the notion that an obscure drama based on a graphic novel about a zombie apocalypse could be the highest-rated show of the U.S. fall season in the highly coveted adult 18-to-49 demographic was unthinkable. Well, think again. The Walking Dead beat all entertainment series this fall, including The Voice, Modern Family, The X Factor and Grey’s Anatomy.

The Walking Dead is the poster child, so to speak, of everything basic cable has come to represent in the U.S. television landscape: more cost-effective shows that are innovative, unexpected, risk-taking (a main character was recently killed off), and air on a network, in this case AMC, that has used original programming to brand itself and serve a loyal audience.

AMC’s tagline, “Story matters here,” acts as a filter for the types of series the channel selects. “We’ve always said we are looking to do shows that are like the ones on premium cable even though we are on basic cable,” says Charlie Collier, the president and general manager of AMC, “but we use three words to describe them: ‘unexpected,’ ‘unconventional’ and ‘uncompromising’. If you look at Mad Men: a period piece that was pretty unexpected and unconventional for television—in fact, we had a lot of people who told us a period piece wouldn’t work in series television. Breaking Bad: here’s a show about a lead character who undergoes a complete metamorphosis around some very difficult and often reprehensible choices. The Walking Dead is set in a zombie apocalypse. All of those are unexpected, unconventional and uncompromising.”

Collier points out that AMC’s original-programming strategy is very different from that of other cable networks. “Once they do one show, they tend to do the next show that looks just like it,” he says. “And we’ve gone the other way, like premium networks do, and in a lot of ways a more difficult way, which is to say once you do something, the next one is almost unexpectedly not like it: Mad Men to Breaking Bad to The Walking Dead to Hell on Wheels. The common theme is that we really want an AMC show to be giving viewers something more than they might get elsewhere on television.”

This drive to offer something different has infused AMC’s original-programming strategy from the very beginning. “It all came out of a desire to make programming of distinction and of prestige for our cable partners, and obviously, for the marketplaces that we served,” says Collier. “We had the largest, most widely distributed movie network in the country. Our very first [original] show was actually a mini-series, Broken Trail, with Robert Duvall. One of the things we were really good at was serving the passionate fans of westerns, so the theory was to take a movie star, Robert Duvall, and create an original program that really served that audience well. So that month we took some of the best films in the western genre and curated them in a way that I thought was particularly AMC, and then served that audience a like-minded original that really super-served that specific passionate audience.

“If you fast-forward to our original scripted programming, which is when I entered the network,” says Collier, “you look at something like a Mad Men or a Breaking Bad, and we used the same strategy, which was to curate a group of movies that really served a passionate audience and then serve them the type of original programming that you would see paired with great movies on the premium networks.”

This programming formula worked and was repeated for The Walking Dead. “Fearfest is a multi-week horror-film festival and it’s been on AMC every October for the last 16 years,” continues Collier. “Just as we did with westerns, we served a passionate audience with Fearfest. For years we were looking for an original-programming opportunity that served that audience. When we saw Robert Kirkman’s great work in the graphic novel The Walking Dead, we thought it was the perfect opportunity to do just that. It was the biggest show of the fall season, not just cable but broadcast as well in the 18-to-49 demo. That speaks to the fact that we superserve that core audience and also made the show relatable to broader audiences.”

ORIGINAL FLAIR
For all of AMC’s success, it was not the first basic-cable network to get into the original-programming game. USA Network and FX first tested the waters, USA with The Dead Zone and Monk, and FX with The Shield. All three shows premiered in 2002, at a time when basic-cable channels were mainly airing reruns of broadcast-network series.

The buildup of original programming on USA was, as Jeff Wachtel, a network co-president, ex­plains, a “wonderfully organic process,” and what guided the pro­cess was a clearly defined brand.

“When Bonnie Hammer [the chairman of NBCUniversal Cable Entertainment and Cable Studios] came on board, she felt very strongly about networks having a brand. Chris McCumber [the other co-president of USA Network] and I joined the company at about the same time. We had been making a show and marketing it individually. Bonnie said, ‘We really need an umbrella for this place to give it a handle for our affiliates, for our advertising clients and also for the creative community.’ We were lucky that unlike some other people who need to make up a brand out of thin air, we had already started finding some success with character-centric, lighter drama, which we had done because the television world had put out endlessly grim pieces. We thought, we don’t have more money, but we have a more unique vision. So how can we tailor that unique vision and bring in a unique audience? The characters brand evolved from that. It’s been feeding the programming strategy and the programming mix. We are lucky that we have a brand that is not like most, an imprint or a label. It is actually something that informs both the way we make shows and the way we market them.”

ON TREND
At TNT, as Michael Wright, the president and head of programming for TNT, TBS and Turner Classic Movies (TCM), explains, “The need for originals came about as a reaction to industry trends. If you go back to 2003—and a tip of the hat to both USA and FX, who started early with Monk and The Shield, respectively, and Nip/Tuck after The Shield—there had been this assumption that cable originals were somehow inferior either in production quality or writing or both to broadcast series. I think those three shows in particular really gave the lie to that.”

In 2003, the management of TNT and its parent company, Time Warner, OKed the move into original programming. “We looked at our schedule—and this is Programming 101,” says Wright. “If you are trying to introduce something new, the best idea is usually to look at who is already coming to the network, taking that audience and trying to lead them into a new program. In 2003, Law & Order was huge on TNT. It’s hard to imagine it today, nine years later, but it was doing a 3 or 4 household rating and easily 2 million in the target demo. TNT was running Law & Order 10 to 12 hours a week in prime; it was a third of the prime-time lineup.

“So we went around to the show­runners and studios and said, ‘Monday night at 10 p.m. we are going to put an original series behind Law & Order. We’d like to do something in the procedural space that fans of Law & Order will recognize and give a shot at because they obviously like that kind of storytelling. At the same time we’ll bring our own voice to it. It will have a cable sensibility, simply meaning maybe a bit quirkier, less traditional, with a voice behind it.’ We developed about ten scripts, shot three pilots and [we chose] The Closer. It was one of those experiences that you are so lucky to have if you are in my business. From the initial meetings with Jim Duff and Mike Robin to the casting of Kyra Sedgwick and that marvelous cast around her, to Warner Bros. being a great partner, it was one of those shows that worked from the beginning to the last episode. What a joy.”

The lessons learned by USA, TNT and FX were picked up by other networks, as they started diverting their programming investments from acquisitions to their own original shows.

“A few years ago, the common wisdom was to produce closed-ended episodes, more traditional crime and justice procedurals,” says Bob DeBitetto, the president and general manager of A&E Network and BIO. “But in the last few years I’ve noticed that the kinds of shows that audiences really want, particularly from cable networks, are more challenging. And what we don’t talk enough about but really should is that at the end of the day, everything we do is dependent upon the audience reaction to our programming. So in the last few years everything we have been doing has had a serialized element, everything is a little more complex, everything is a deeper dive or an exploration of flawed characters.”

DOLLARS AND SENSE
If edgier storytelling and quirkier, more complex characters have become the hallmark of basic-cable dramas, every writer, showrunner and network programming executive will agree that it’s far easier to maintain a certain level of innovation when producing 10 or 13 episodes, which is the standard cable model, than when churning out 22 episodes per season, which is the broadcast-network model.

The main advantage of the shorter 10- or 13-episode order of cable shows is that it gives showrunners a chance to think, as David Madden, the president of Fox Television Studios, ex­plains. “One of the laments that most showrunners have in broadcast is that you’ve finished shooting your season and you are out of breath from this marathon you’ve been running for getting 22 episodes on the air. You have a five-minute break and then you are right back into planning the next season, assuming the show gets picked up. Whereas in cable you really have months to think about what worked, what didn’t work, what could work better. You have time to really recharge and get some perspective on your show and twist it or pull it in a different direction. It’s not that cable showrunners are any smarter or more creative than broadcast showrunners, they just simply have more time to reflect and get objectivity on the material that they are producing.”

Another advantage of shorter episode orders is that they keep costs down.

QUALITY, ON A BUDGET
Cable dramas are known for costing less than broadcast-network dramas, and cable executives take pride in the fact that they can deliver substantial quality on screen for a lower price per hour. On average, a one-hour drama on cable costs two-thirds of what a one-hour on broadcast networks costs.

“Our shows probably cost 30 to 35 percent less than similar shows on broadcast and maybe 50 percent less than a show on pay cable,” says USA’s Wachtel. “It’s not easy to sustain, especially given our success, but it’s also really important in the cable world that you keep the economics of each show manageable so that you can allow your showrunners the creative freedom that we promised them.”

That creative freedom is apparent in recent and upcoming shows on the leading cable networks. Now that they have loyal audience bases, the pressure is on to keep them satisfied and continue to deliver on their brand promises of complex characters and unexpected subject matter.

“In the last year or two we have turned a corner with our original scripted drama at A&E; we are taking more risks than we have in the past,” says DeBitetto. “We are very focused on character portraits. That is certainly the case in Longmire”—a contemporary crime thriller about a dedicated sheriff trying to rebuild his life. “It’s the first example of a show that has taken a different turn because it’s a little darker. It’s a little more atmospheric. There is a phenomenally compelling but flawed lead at the center played by this amazing Australian actor, Robert Taylor.”

The audience has responded to Longmire. “It finished its first run in a very strong place, with almost 5 million viewers, one of the top shows last year,” continues De­Bitetto. “In production now is Bates Motel, a present-day prequel of sorts to Alfred Hitchcock’s Psycho. We acquired the rights from Universal and have partnered with Universal Television. We brought on Carlton Cuse, the famed showrunner of Lost, and Kerry Ehrin, the lead writer from Friday Night Lights.”

THE QUIRKY FACTOR
USA continues to build on its “Characters welcome” theme, with shows like Suits, White Collar, Covert Affairs and Royal Pains, that have exemplified the brand’s character-driven and “blue skies” attributes—shows that are not only shot in beautiful locations, but that give a positive view of life.

“We’re doing a show called Graceland, from the creator of White Collar, Jeff Eastin,” says Wachtel. “While it has a gorgeous Southern California setting, it goes to a deeper and darker theme than we have previously done. Graceland is based on a true story. The DEA [Drug Enforcement Administration] busted a drug lord and one of his principal assets was this beautiful house in Redondo Beach. They took it over and instead of putting it on the market, they made it a safe house for DEA, FBI and U.S. Customs agents. It’s a beautiful show and Jeff is about as fun, smart and witty a writer as there is.”

TNT has branded itself simply with one word: “Drama.” The network has expanded beyond procedurals and is offering its viewers a portfolio of drama shows, from science fiction to soap opera.

“The really fun thing now about TNT is that you have this consistency of storytelling, whether we are doing science-fiction dramas like Falling Skies or a soap like Dallas, a great procedural like Rizzoli & Isles or Major Crimes, they all have that overlay of, it’s fun! The storytelling is very sophisticated, the character work is complex and respects your intelligence, but these shows are designed to entertain you and deliver that smart escapism experience.” One upcoming drama in 2013 will be Monday Mornings, a medical drama from David E. Kelley, the creator of such hits as Chicago Hope, Ally McBeal and Boston Legal.

MIX AND MATCH
FX has also been offering viewers a mix of unconventional programming, from the dramas Justified, Sons of Anarchy and American Horror Story to the comedies Anger Management and The League. This month FX will premiere The Americans, a 1980s Cold War drama starring Keri Russell and Matthew Rhys as undercover Soviet spies living in the U.S.

What is remarkable about the recent crop of basic-cable dramas is that it has attracted impressive talent, in front of and behind the camera. We’ve seen Glenn Close on Damages, Kyra Sedgwick on The Closer, Jessica Lange on American Horror Story. Renowned showrunners like David E. Kelley, Dick Wolf and Carlton Cuse are flocking to cable.

“Talent is looking at cable across the board and…seeing opportunities that don’t really exist anywhere else,” says Fox TV Studios’ Madden. “I was in the feature business for 20 years. Back in the ’80s and ’90s there were a whole range of genres that the studios made that I would refer to as mid-range movies, which were the sophisticated adult drama and the adult psychological thriller and the adult character comedy. Those mid-range movies in the feature business disappeared. Everything became either gigantic, high-end big-budget spectacle or lower-budget broad comedy or horror, and with the rare exception, mid-range movies were gone. Where did that adult drama go? It went to cable.”

CHALLENGES AHEAD
So what’s on the horizon for cable? Will networks be able to maintain their level of innovation? One thing is sure, originals remain essential to strengthening brands and connecting with the audience; not all originals, however, will be scripted dramas.

USA Network, for one, is moving into original comedy. “We have a couple of comedy pilots we are looking at right now,” Wachtel says. “One of them stars Annie Potts, from Designing Women, as the mother of two young doctors, and it’s a fun piece that we think might be a great companion to Modern Family,” which launches on the channel this year. “The other one is…a little edgier. Denis Leary and Bob Fisher are producing it. Bob wrote Wedding Crashers.

“We love that we are playing in the comedy world now, and the other big thing is reality. It’s a genre that we feel we really need to join the party, and we have two shows we are launching in the spring. One is called The Moment and the other is The Choir. They are both upbeat and somewhat aspirational, but we also think they are very entertaining life journeys.”

“TNT is on an exciting path,” says Wright. “We started with that one series in 2005, The Closer, [and] got to some 115 hours of programming in 2012 across 10 or 11 series, and we are expanding. One of the biggest areas we are going to grow into is unscripted programming. A network that is branded as a drama network needs to be in that space. A lot of viewers today, especially younger viewers, are getting their episodic dramatic experience as much from unscripted storytelling as they are from scripted. There is room for both. We might grow our scripted footprint on TNT a little bit, but we are going to dramatically increase our unscripted story­telling because it’s what the audience wants, it’s appropriate to our brand and I can argue it’s vital to our long-term success.”

Will the push to produce more originals lead cable channels to take fewer risks, to play it safe, and make more copy-cat programming?

“It’s a possibility,” says Kevin Beggs, the president of Lionsgate’s TV group. “It’s such a fine line. On one hand, cable has an advantage in that it doesn’t have to put on that many originals to maintain an entire schedule. They have so many movies and acquisitions and 23 hours a week that they have nothing original on. And one show, literally, can change a network’s profile, not only creatively but financially, overnight. Think about Queer Eye for the Straight Guy for Bravo, or think about Mad Men or Breaking Bad on AMC, or think about Sons of Anarchy now with FX, which is blowing the doors off network shows consistently, week after week. It’s the age-old maxim, ‘All it takes is a hit,’ but a hit in cable can actually go a lot further, because they don’t have to program originals seven nights a week. When they do get to a place where they are putting on that many, there is certainly the risk—can you be interesting and different and out of the box that many times? But there is a bit of a divide between the general-entertainment channels, the USAs and the TNTs that have a lot of originals, and others who don’t have to be the be-all and end-all for everybody. They can have a couple of unique game-changing shows on and actually be perfectly fine with that.”

TNT’s Wright agrees. “There are cable networks that play it safe and there are cable networks that take huge risks, and I would argue that that is appropriate. There are certain networks that one would look at and say, ‘Boy, that network sure is playing it safe,’ but I would counter and say, ‘No they’re not, they’ve identified the audience that likes that kind of programming.’ A network that has cultivated a certain kind of brand and knows its audience and delivers to that audience and does it with programming that someone might objectively look at and say, ‘Gosh, that’s pretty down-the-middle programming,’ isn’t necessarily risk-averse. They might be running a very smart business because they’ve identified an audience, branded themselves for that audience and are programming to it.”

On the other hand, Wright continues, “There are other networks that have branded themselves as sort of risk-taking, darker, more provocative networks, and good for them, because I personally believe, as an ambassador for cable, the great thing about cable is that there is something for everybody.”

Regardless of the show, it is imperative that cable networks maintain their relationship with their viewers.

LONG-TERM VIEW
“Here is an interesting fact I’d like to share that not a lot of people talk about,” says USA’s Wachtel. “As we do our ongoing research looking at our relationship with the audience, which is one of the things that is most important about USA, we don’t really view it as a show-by-show experience. We are creating a long-term relationship with an audience. That’s why we don’t pull the plug on shows; we bring them to a conclusion, like Monk or In Plain Sight. When it’s time for the sun to set on Burn Notice, we will let the audience know and we will figure out a really smart way to bring [it] to a close.”

Wachtel points to one finding of the network’s research. “If you watch a show on USA you are more likely to watch another show on our network than any other network; 85 percent of people who watch a USA show will watch another USA show. The way we are approaching [our schedule] is we are building a community. I believe long term, as linear networks change what they are and what they do, the idea of having this kind of back-and-forth relationship with our audience is going to be even more important.”

BUYING TIME
Another challenge for cable networks is to narrow the gap between what a 30-second spot commands on a cable drama and what it commands on a broadcast drama series. For years, cable shows have brought in fewer advertising dollars. “The CPM [cost per thousand] differential makes no sense to me; I don’t get it,” says TNT’s Wright. “The same 1,000 viewers on a TNT show should generate the same CPM as 1,000 viewers on a broadcast show, because the level of quality of storytelling and production is equal. So, as somebody here put it, it’s a legacy tax; why are we getting less?”

But thanks to some of the mega hits on cable, and here we come back to The Walking Dead, the advertising gap between cable and broadcast is narrowing. Advertising packages for The Walking Dead are reportedly selling for as much as $375,000, which is at the same level as broadcast network shows like Modern Family and American Idol.

While AMC’s Collier will not comment on his network’s ad prices, he did say, “We’ve done very well with advertisers. They like not just the size of our audience but also the quality of it, and not just the unique stories we are telling but also the way we are telling them, and that is reflected in the pricing and in the volume that we are seeing.”

There is no question, the focus for innovative cable networks continues to be programming. “Our challenge right now is pushing ourselves out of any sense of complacency, and we’ve already done it and succeeded,” says USA’s Wachtel. “We need to remind ourselves to take risks and push out and to still have that start-up mentality that made us successful.”