Changes In US Network TV Brings More Power To International Viewers
For many years, it’s been the case that the US TV Networks didn’t really care all that much about international markets. And why should they? Often the TV shows they air are not owned by the network itself, but bought in from an external tv production studio. Therefore, any profits from selling the show overseas went to the outside studio, not the network. However, this season we’ve seen a marked shift in that dynamic…
You may have noticed, this season we saw a number of shows with lower US viewing figures get renewals, whilst higher rated shows on the same network got cancelled. For example, CBS cancelled 2 Broke Girls, but renewed the much lower rated Elementary. The reason for this is ownership – 2 Broke Girls is made by an outside studio. Elementary is made by CBS, the same network that is airing it. That means, if Elementary is sold to a streaming service like Hulu or Netflix, or to an international broadcaster like Sky, CBS take all the money. With 2 Broke Girls, they don’t.
During CBS’s Upfront last week, CBS Chairman Les Moonves commented that “for the first time, less than 50% of the company’s revenue comes from advertising vs. more than 70% several years ago.” He continues to say that most of the other 50% is “coming from CBS-owned programming that airs elsewhere.” This has been a big shift in the way TV funding works in the US, and it’s happened fast! He adds “There have been more changes over the last year than there have been in a decade.”
That’s why this season, we’ve seen a large change, with many US network looking to bring the show creation in-house, rather than buying in from outside studios. Where they are using external studios, the networks are getting much tougher, demanding a larger slice of the backend (i.e. the money when a show is sold abroad or to a streaming service.)
This is where the UK viewers come in. One thing we talk about a lot here at Geektown is illegitimate streaming services and torrent downloading. The problem when you go and find a series on an illegitimate stream, rather than watch it on a UK channel who legitimately buy it for a UK audience, is that you’re making it less likely that channel will buy it again. If the show’s owners have more trouble selling it abroad, that means less money, making the show less profitable. Less profit, means more chance of cancellation. Now we’re seeing the show’s creators and the networks merge more and more into the same thing, that’s a massive problem, as it could get the show you love cancelled…
Take this comment from Shawn Ryan, co-creator of the cancelled, then not-cancelled ‘Timeless‘. In a Reddit AMA last night, a UK viewer asked the question “How important were the international viewing stats when they were considering its renewal?” to which Ryan replies “They were vital for our renewal. Foreign revenue becomes a bigger and bigger factor in renewals of American TV shows in recent years.”
Of course, the UK networks need to help themselves, and the show creators out here too! Some, such as Fox and Sky, tend to do a pretty good job at keeping shows close to the US air date – even going as far as simulcasting shows like ‘Game Of Thrones‘ with the US to reduce the chance of the audience looking for it elsewhere. Then you have Channel 5, who have been holding onto the latest season of ‘Gotham‘ since last September… They are really not helping, and shooting themselves in the foot by needlessly reducing their own audience figures.
It’s going to be very interesting to see if this changes international tv sales moving forward. If you’re a studio/network selling your US show to an international station, it would be sensible to not only look at the monetary part of the deal, but also look for some guarantee they are going to air it close to the US air date, to reduce the chance of viewer going to find it illegitimately online. Whether that will happen, only time will tell.
Dave has over 20 years experience in the digital industry, and is founder and editor of Geektown. Obviously a huge geek himself, he can often be found in front of the latest tv show or movie, on various video games, or with his head in a comic book.