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by Alison Willmore
January 15, 2014 11:59 AM
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How Two Networks Are Dealing With a Changing TV Landscape And Why Pilot Season Is No Longer a Necessity

FX's John Landgraf Frank Micelotta

While the film industry continues to see seismic shifts in the way movies are made, released and monetized, the television industry is experiencing its own major changes. Viewers have been drifting away from live TV in favor of recording things on their DVRs and zipping through the commercials, or cutting the cord entirely and consuming series online. Traditional Nielsen ratings are no longer an accurate reflection of the entire audience for a program, cable channels have caught up with the big networks and more and more venues for original series (like Netflix, DirecTV and Amazon) are popping up and offering ambitious shows comparable to what's on air.

'Sons of Anarchy'

This shakeup is what made a pair of panels on the topic at the TCA press tour this week from two executives so interesting. Both FX president John Landgraf and Fox chairman of entertainment Kevin Reilly are looking at ways to adapt their networks, which are owned by the same parent company, for a changing world. Landgraf, who's one of the smartest executives in TV, noted 2013 was a year in which cable series like AMC's "The Walking Dead," FX's "Sons of Anarchy" and A&E's "Duck Dynasty" were in the 20 most shows, and that scripted series in particular are exploding.

"In 2002 when we launched 'The Shield,' there were 33 scripted dramas or comedies on basic and premium cable," Landgraf said. "This year there will be about 180. That is over a 500% increase. And it doesn’t account for the fact that internet delivered TV services like Netflix, Amazon Prime and Hulu Plus are now rolling out their own original series."

That said, Landgraf doesn't see increased competition as the biggest challenge: "Somehow our shows seem to keep hitting all time highs every year." Instead, the main problem he sees is the lost revenue from advertising as viewing habits change. He pointed out that while "Sons of Anarchy" averages over five million adults 18-49 during its primary airing, only two million of those are watching live and only three million watch the commercials. Part of FX's response to this has been to prepare an HBO Go-style on demand streaming service called FXNow, but another part has been to produce more of their own programming themselves.

"Now I think we’re making shows for posterity."

TV series are being made differently, Landgraf said, and they're no longer "a disposable medium" in which a show is made primarily for the audience that watches it live. "Now I think we’re making shows for posterity. I think it’s not unlike a movie in that, yes, it does matter what the first weekend’s domestic U.S. box office for film is -- but if a film is really good, it has a chance of having a long creative and financial life. People can still be discovering it, enjoying it, and you can still be earning money based on it 5, 10, 15 years after you make it.

"That's the thing that's most exciting to me about television," Landgraf continued, "is that now television seems like a medium that has a long life. Therefore, it's worth making things that not only galvanize an audience the night they air, but might be useful to someone 15 or 20 years later. And, of course, we own most of our programming, so we’re benefiting from both those revenue streams." He added that "the number of times when there were challenges over here on the ad sales front, the ownership of content has bailed us out. So it’s a nice thing, actually, to have some sort of more certain long tail revenue that sort of undergirds a more volatile thing like advertising sales."

One of the reason's television has grown in quality, Landgraf feels, is because everyone's in search of those breakout, quality series ("there are so many hungry buyers") and are spending more on production: "I think you can just see the canvas and the scope of television expanding. You just look at the sheer caliber of talent that we have on our air and the talent we’re developing with, and part of what’s happening is there's just no distinction between film and television now. I don't think there are any film actors, directors, writers, or producers who wouldn't or don't work in television. So the talent pool is way bigger than it was five years ago. And I think that it’s so, fortunately, knock wood, it’s large enough now to meet all those hungry mouths."

Fox's Kevin Reilly

Fox has been dealing with the same issues of losing live viewership in addition to feeling the pressure of cable networks eating away at their market share with the kind of success FX has been enjoying. And Kevin Reilly claimed that one of the ways Fox would be dealing with the changing realities of the TV landscape would be by bypassing the traditional pilot season, in which networks take pitches in the early summer, order scripts in the early fall and pilots in January, most of which never get further in the process to be premiered as series in September or January.

"The broadcast, development, and scheduling system was built for a different era," Reilly said, calling it "highly inefficient" and taking place on a needlessly compressed time frame and rigid schedule, whereas cable "has a lot of flexibility in when the shows can go on -- cable networks are able to course correct creatively and reshoot and recast."

Reilly said that Fox has "been ordering series throughout the year and are currently in some stage of series production on 9 projects as I sit here today" -- among them "Broadchurch" remake "Gracepoint," the John Mulaney sitcom Fox snagged from NBC and Batman origin story "Gotham." He believes this breaking away from the old way of doing things will be "a more talent friendly way of doing this" that will also allow the channel to do more year-round programming and more flexible season lengths (something cable's already doing). "There shouldn’t be a set order pattern. There shouldn't be a set time when we launch things. There are thousands of original shows competing for attention right now -- we just can't do it all at once."

'Sleepy Hollow'

Fox will begin this proposed break from the old scheduling system this year, rolling out 12-episode miniseries "24: Live Another Day" in May, a previously unheard of month for a big network to kick off event programming like that. They're planning to slate some of their new series next summer, and Reilly notes they're been starting earlier with shows to give them more room to rework things: "It's not a big story when cable rolls back a premiere date. There's barely an HBO show that doesn't reshoot half of their pilot every time, and no one throws their arms up about that. That's how you make things great. We want to have that same maneuvering ability."

Fox's surprise hit of the past fall has been "Sleepy Hollow," which has a 13-episode season, and they're not currently looking to significantly expand that order when it returns for a second season. "I think for most shows and dramas in this day and age, it’s better for the audiences to focus and to do shorter orders," Reilly said. "Many dramas are just better creatively on a shorter-order pattern." But Fox's removing themselves from the traditional schedule means, per Reilly, they "will be starting next year’s production of 'Sleepy Hollow' this March. We will be months ahead of everybody else."

Fox may not be as venerable as ABC, CBS and NBC, but it's still a major network for which these will be big changes. Will they pay off with better program that can keep up with the high standards being set by cable? It'll be interesting to see.

Check out all our coverage of the Winter 2014 TCA press tour.

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