TV Production Studios vs TV Networks: Digital Tension

A good story in NYT about the tension between production studios and TV networks, over digital exploitation of shows. As we have covered before, it s show is produced by a studio and is shown on another media conglom’s TV networks (example, “My Name Is Earl”, produced by Fox, broadcast on NBC), things get complicated. For that reason, it is not one of the shows available for download on iTunes.
Even within a conglom, for example with Fox’s “24” the story mentions the tension between 20th Century Fox Television, the producer of “24” and Fox TV network, over who gets to exploit the DVD extras.
“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.”
24 example: 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. 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.


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