The Tough Path to Prime Time

An idea for a new TV show must run a gauntlet of up-front costs, audience tests, and advertiser scrutiny

THE summer dog days of television are almost over: A couple more weeks and the new fall-winter season will get under way, largely putting an end to reruns and the parade of B movies.

The annual ritual of settling on the shows for the winter season is of great importance to the networks, the advertisers, the producers of TV programs who have millions of dollars at stake, and, last but not least, the all-important audience.

What the big broadcasters have chosen to introduce after summer's end, along with the "holdover" shows, will pretty much set the television tone for 1993-94, which in this case means a continued and pronounced emphasis on comedy and "family appeal," known to attract advertisers. Talk shows and "reality" shows also will proliferate, and every network has a news-magazine program like CBS's "60 Minutes."

"Everybody thinks of the ratings, because the bigger the audience, the more potential revenue comes from the advertisers," says Frank Agrama, chairman of Harmony Gold, a prominent independent production firm whose new "Heidi" series is due this fall. "Ultimately, all the decisions are based on money, not on quality," he adds.

"The key consideration for a network programmer today is whether the program is `advertiser friendly which means, essentially, that it doesn't hurt or offend anybody."

The way the four networks - ABC, CBS, NBC, and the smaller Fox Broadcasting - generate and license programs in prime time is complicated and, many argue, highly inefficient, though the alternatives appear limited.

Changes are on the horizon, however. Much to the unhappiness of the movie studios, who are the major suppliers of television entertainment, the networks plan to produce programs increasingly "in house," which gives them much more financial and artistic control.

"It is a stupid, inefficient, and often unfair system," says Michael Yudin, former executive vice president of Reeves Entertainment, a production company that did not land any of its proposed shows on a network this year. "It's not at all clear why the networks decide to remain dinosaurs instead of trying to broaden the reach of their programs.... There is no place today on the networks to sell quality. They are dedicated to cost-efficient mediocrity."

The progress of a program from original concept to air date seems simple, but it is complicated by a myriad of often unrelated factors, since the networks participate directly in the creative process.

"When you have an idea," Mr. Yudin says, "you make a development deal for the joint financing of a script by a good writer." That's true for the big studios as well as the small independents.

If the script is accepted, then the process moves to the "pilot" stage, a "test run of the show, most of which is financed by the network," Yudin says.

If, after extensive testing, the pilot is judged to have the right qualities and potential, the network gives the producer the green light to do a series. Normally, that means 13 episodes, but lately broadcasters have only been asking for only seven.

The economic risk is considerable. Even with the network investing in the script development and the pilot, the producer stands to lose a lot of money - as do the broadcasters. Each network orders approximately two dozen pilots, of which about 30 percent reach the series stage. Once a pilot is rejected, it is useless - an investment of $1.5 million or so down the drain.

"Our company this year lost in the neighborhood of $20 million just in development costs," says one production executive who prefers to remain anonymous.

The producers' financial risks do not end with the pilot. When a network picks up a series, which it normally does for a limited number of shows, it pays the production company only between 60 and 70 percent of the actual cost. The rest of the money must be recouped by the producer from syndication to independent stations in the United States, cable channels, and the potentially lucrative international market.

This arrangement is called "deficit financing" and its burden is such that even important studios - like MCA/Universal - have indicated that they may skip producing for the networks in the future. MCA, in fact, bowed out of the "Northern Exposure" series because it felt that the deficit financing problem was becoming overwhelming.

"We literally must count on the necessary income from abroad to close that inevitable gap," says John Ranck, the president of Multimedia International, which produces and distributes programs. Once the network airs a series, the producer still may be stuck with a deficit of between $60,000 and $70,000 per episode. "That's not a sensible system," Yudin says.

DESPITE all this, Mr. Ranck says "it's somewhat easier now to sell shows to the networks because they know that there are so many other places where we can go. The people who guard the network gates realize this. Competition has helped make them less cavalier when it comes to looking at projects."

Larry Friedricks, president of Kushner-Locke International, also a busy production firm, likes the current system. "We are constantly in touch with them to know what they are looking for," he says. "We present ideas and keep going back to them. When they like a project, we co-develop it. We walk down that path together."

There are times when Kushner-Locke will produce shows specifically for cable or for syndication. "They have become big enough now to afford it," he reports.

Not all prime-time shows are "assigned" by the networks, though. Robert Halmi Sr., president of RHI Entertainment, goes a totally different route. He sees it as "the way of doing business in the future," that is, the kind of "event television" programming in which he specializes. This summer alone, RHI will produce some 62 hours of programming, including sequels to "Gone With the Wind" and the hugely successful western, "Lonesome Dove."

Mr. Halmi doesn't go in for "deficit financing." The backers of his shows include large commercial companies like Proctor & Gamble, Hallmark, and others who put up the entire budget, buy the necessary network time, and slot their shows into it. They share international revenues with the producer.

Many of the independents are frustrated by the way the networks function. "They are simply terrible," Mr. Agrama says. "Executives are often more worried about their jobs and their standing than about the material that will get on the air. Many of them are insecure in their positions, and that is a big negative.

"Producers who get to the men at the top see their material produced. If the low man on the studio totem pole likes a story, he'll pass it on to his superior - inevitably with suggestions for changes."

Everyone in the network hierarchy is scared of losing his or her job, Agrama says, so they feel they have to contribute something that might add to their credit.

"It becomes known that CBS wants a dog story, so everybody in town suddenly pitches dog stories," Agrama says.

"Eventually, it turns out that the second cousin of the father of the boss also has a dog story to submit, and that's the one they'll decide on."

Frequently, it is not the validity of the story but the star name attached to the project that will persuade a network to go ahead with it, observers note.

At other times, it's the network's perceived need that influences the decision. ABC, for instance, announced that it was eager to reach families with four or more children. When its new shows were listed for the fall, it turned out that a good many deal with such families.

Recent rulings by the Federal Communications Commission (FCC) radically modified edicts that prohibited networks from owning a financial interest in the programs they carry.

The FCC now also allows networks to handle the domestic and overseas sale of the programs they carry. The new rules lead the way to basic changes in the system. The networks now have in-house production units working at top speed on programs aimed at whatever viewership they wish, without having to deal with the goals of outside production companies.

But life still isn't easy for the network programmers, who also have to worry about such unrelated factors as an evening lineup that will keep the audience firmly glued to one channel despite the overwhelming competition from other networks, cable, and prerecorded videotapes.

THE pressure is on network programmers to perform, and to generate shows that will attract major advertisers' dollars. Mistakes are easily made.

NBC, for example, had a disastrous year in 1992, partly because the network consistently pitched its programming to a young audience with shows like "Fresh Prince," "Saved by the Bell," "Blossom," and "Empty Nest." NBC plunged to last place in the network ratings, and is now correcting that course.

The new fall programming has been criticized as lacking in excitement and originality, but not everybody agrees.

"I am not sure that going for the widest audience necessarily means you wind up with a show that can't be good television entertainment," says Terry Botwick, president of Hearst Entertainment Distribution and National Programming.

"Some of the larger hits, going back to `M.A.S.H.' - and certainly `Cheers took a long time for the audience to find and to land in a proper time period. And `The Bill Cosby Show' was passed on by everyone and then became a huge success."

"Something that is more narrow, more intelligent, does not necessarily make better programming," Mr. Botwick continues. "That isn't saying that shows sometimes don't get selected for the wrong reasons, such as the leverage of a given star or a production company, or the desire to please advertisers."

Does all this mean that commercial sponsors determine - indirectly - what we see on TV?

"No, they don't run the business," Yudin responds. "They will buy what is available to them. They don't really dictate content, but the income they represent - and the need to have that income at a time when the networks see themselves in a financial squeeze - certainly plays a significant role."