Digital Media Brings Profits (and Tensions) to TV Studios (reg)

This NYT article gives a good explanation of the media market, and why studios are keen to get onto new technologies such as the internet and mobile phones.
“Until recently, that model worked something like this: a studio sold the initial rights to broadcast a program to a network within its own company or that of a competitor, usually for far less money than it had cost to make the show. The studio then waited patiently for the time, probably four years later, when the network’s exclusive right to broadcast those episodes would end, thus allowing the studio to sell the show in syndication and not only erase the deficit but hopefully turn a profit.”
An example is given of 24, with the rough figures as follows:
Cost to produce each episode: $2.5 million
License fees from Fox Network: $1.3 million
International syndication: $1 million
With a net loss of around $200,000 for each of the 120 episodes produced. The only thing that’s stopping the studios going bankrupt is the DVD sales, which is why they’re producing exclusive content for that media in a bid to get die-hard fans to cough up the dough.
It’s also why the studios are keen to get on the web and mobiles, since it’s an additional revenue stream which could be independent of the broadcasters…but once again, only for original content. Since the broadcasters license exclusive rights, the studios have to come to an agreement with them before rebroadcasting the normal series — and that has proven troublesome.
Hence the first great original mobisode, 24: Conspiracy, which initially did not feature actors from the original series (to keep costs down). It didn’t sell as well as the TV series, less than one million downloads worldwide, but “the studio said it hoped the service’s popularity would grow”. It’s likely to, as people become more used to the idea of buying mobile content and there are more capable handsets on the market.