American TV outlets want original, as costs skyrocket

GMT 20:04 2015 Sunday ,22 February

Arab Today, arab today American TV outlets want original, as costs skyrocket

Q&A during Comic-Con International 2014
New York - AFP

In the new age of American television, it pays to be original. But it also costs a bundle.
From Time Warner and its HBO unit to streaming video group Netflix and online giant Amazon, money is pouring in to produce new shows like "Game of Thrones," "Transparent" and "Marco Polo."
With TV viewing habits becoming fragmented as more people go online for new outlets, the pressure is on to attract audiences with fresh, original programs.
Netflix is planning to spend $3 billion on content this year as it pushes to grow globally, expanding its offerings after successes with the political drama "House of Cards" and comedy-drama "Orange is The New Black."
Not to be outdone, Amazon has stepped up its original production efforts with the transgender series "Transparent," winner of a Golden Globe, and others, with famed director Woody Allen hired by the online giant.
Amazon invested some $1.3 billion in television programming last year, according to founder Jeff Bezos.
"Working with Woody Allen is not cheap," said James McQuivey, an analyst at Forrester Research who follows disruptive technologies.
McQuivey said more studios and outlets are bidding for these programs, pushing up costs.
"Suddenly, instead of only having four or five studios to sell your TV shows to, you now have 12 or 16, and some of them are very motivated because they're looking for the next big hit," he said.
According to Nielsen data compiled by the FX cable channel, there are 352 original scripted dramas and comedies produced for US cable, broadcast and online television this year.
The number of original cable programs has doubled in the past five years. For online, the sector has grown from non-existent to 24 original programs, the research showed. That includes new efforts from Internet players such as Yahoo, AOL and Hulu.
- Cable giants strike back -
Traditional cable and broadcast operators are not sitting still. Time Warner spent $14.5 billion on HBO programming, production and marketing in 2014, and chief executive Jeff Bewkes sees that figure growing to $19 billion in the next few years.
Viacom -- which owns Nickelodeon, MTV and Comedy Central -- said programming costs were up 15 percent in the past quarter.
At 21st Century Fox, controlled by mogul Rupert Murdoch, investment is a priority as well, with the broadcast Fox network having rolled out new blockbusters like "Gotham" and "Empire."
"The next year will be a period of investments with priority focused on building hit shows, not maximizing profits. The profits will follow," said president and chief operating officer Chase Carey.
"Our competitors have already shown what difference a couple of hits can make."
- Looking for hits -
These TV operators are looking for the next hit in the manner of HBO's "Sopranos," or the AMC programs "Mad Men" and "Breaking Bad."
James Murdoch, the co-chief operating officer at 21st Century Fox, said finding the next big success is not easy.
"There's just an absolutely enormous amount of original production going on right now," he said.
"The total volume isn't really the question. The right question is what are you making? How do you make it great? How do you stand out? And can you be a place that can attract the great show runners, the great writers, the great talent to come and do incredible work?"
It's not clear if the television companies can maintain the pace of investment, or whether consumers will turn away when faced with higher subscription costs.
McQuivey said there is now "an oversupply of funding" because the old model companies are still flush with cash from their more profitable years.
"That's a very temporary phase," he said, noting that companies will have to tighten up as profits are squeezed.
"You can no longer start 20 new series knowing that each of these series is going generate half as many viewers as they used to," McQuivey added.
"For now, people are making their last bets because they know the time is coming when some of them are going to be gone. They don't want to be the ones that don't make it across that transition."


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