Competition, independence and the “Golden Age” of TV

At MIPCOM 2013 in Cannes this month The “Golden Age of Television” was one of the dominant themes of the world’s largest television market. It has also become news, at least in the Canadian industry, due to an article by the Globe and Mails John Doyle who suggested that Canada, while producing “good” TV, was missing out on the golden age. The question he raised was why? There may be a simple answer. Perhaps the types of independent channels like HBO and AMC that are driving golden age production no longer exist because of consolidation.

Here are a few thoughts on the golden age from someone who represents the interests of independent producers and worries a lot about the loss of independence on screen –not just in Canada– but in the U.S., because independence is critical to diversity and innovation in programming. While the situations in Canada and the U.S. are different, there are linkages between both regimes and the golden age.

In Canada, we have lost all major independent commercial broadcasters due to consolidation, but still maintain a healthy independent production sector. Conversely in the U.S. the independent producer has been virtually forced off network TV, but the presence of independent broadcasters permits for the production of cutting edge product in competition with consolidated entities.

From a content perspective there is some incredible TV being produced outside of traditional network television from The Sopranos, to The Wire, Breaking Bad and Dexter, Homeland and Justified, House of Cards, The Fall, The Killing, Top of the Lake and Game of Thrones. On the Canadian side of the border Orphan Black, Intelligence, Durham County and Call Me Fitz deserve to be on the “cutting edge“ list in my view. But here’s the thing:

All those cutting edge, golden age shows in the U.S. have three things in common. First, these are not produced as mainstream network (ABC, NBC, CBS, Fox) shows. Second, even though the golden age shows are critically, and often commercially successful, mainstream network shows still draw larger audiences. (More sophisticated ratings data may modify the latter conclusion a bit). Third ,and critically important, is that these shows tend to come out of cable channels (AMC, HBO, Showtime, FX) that are often independent (HBO, AMC) of the main networks or operating as competitive responses to the lead cable innovator, (HBO).

This is an important point in respect of Canada because there are virtually no, perhaps not any, independent cable channels left with big budgets to fund domestic high value serialized dramas. Super Channel and Movie Central (Corus) are independent but don’t have the budgets to produce very many shows on their own.

In the U.S., with the deregulation of broadcasting in the 1990s and removal of the financial interest and syndication rules (fin syn) the independent production sector was crushed along with protections to ensure diversity on screen. And, network broadcast production done by ABC, NBC, CBS and Fox became virtually all in-house (service) work. That, in turn, shifted the balance from producer/director/writer to corporate interest when it came to making creative decisions, with negative impact. There have been wonderful exceptions, of course, to the rule like Lost, but until recently most serialized dramas on Prime Time were cancelled faster than you could build buzz.

Arguably this decision by deregulated US networks to kill off independent production may also have helped speed the decline in conventional TV audiences, as innovative ideas tended to be replaced by a tendency to try to hold a mass audience by keeping content predictable. Conventional TV in the U.S. generally became derivative and often boring as a result for many viewers.

It is therefore hardly surprising that the real innovation and lift for serialized drama happened outside the major networks starting with HBO and ending, so far, with Netflix. And while audiences have tended to be relatively lower on cable versus conventional TV, there has been a steady decline in audience for the top conventional shows. What we are now beginning to see as a result is a shift back to serialized TV in the U.S. in order to stem a steady erosion of viewer to cable or online TV. This competitive dynamic is occurring in the U.S. because even with consolidation there is still room for a level of competition in the U.S. due to the sheer size of the market.

In Canada we don’t have room for both the level of consolidation we have undergone and a healthy independent broadcaster sector. That is an issue of scale.  So, it’s no surprise that the focus of our industry has been producing good shows for prime time audiences because Prime Time is the business.

In the US there has been massive consolidation but the market being 10x the size of Canada continues to have room for independent broadcasters like a standalone HBO or an AMC that is looking to produce cutting-edge marquee shows to guarantee its brand a place on the cable lineup.

There is no HBO scaled enterprise in Canada to fund that level of innovation and our largest Pay TV player (Astral) has been now subsumed by Bell Media. That lack of scale has also meant that bigger budget shows by definition tend to be made for conventional channels like CTV, Global and to a lesser extent City TV.  That has produced benefits. Looking at the metrics for shows like Murdoch, Saving Hope, Flashpoint, Rookie Blue, The Listener, Motive or Cracked, one can argue Canadian production is producing good shows that are better than ever. And lets not ignore the fact these are drawing good audiences. Audience matters; a lot.

Regulators in Canada and, similarly in the U.K., have also had a hand in the balance in recent years by supporting the production of innovative content and increased diversity through either, targets that require a percentage of content be independently produced, and/or terms of trade that protect ownership of intellectual property and limit abuse of market dominance.

But to produce shows that have the edge and budget of the best of the golden age requires more private investment and partners outside of Canada. That is a model in the works not only for Canada but is increasingly being looked at in the U.K., New Zealand and even the U.S. A  great example of that is the Space success (now being carried also on CTV) of Orphan Black, produced by Temple Street with the support of BBC America — or the big budget Copper produced by Cineflix and a cast of international producers and broadcasters.

The shift to the golden age of TV and the need to finance high quality productions will bring about some significant structural changes particularly as VOD, broadband TV and pick and pay reduce margins of some networks.

More co-productions are obviously part of the deal but as margins decline in the U.S. we may also see a shift away from the fully-funded studio back to an increase in independent producers picking up more costs in return for more control over IP. That will allows networks to hedge more bets and reduce financial exposure. That was the case in the U.K. when broadcaster margins declined and ultimately led to an emergence of much larger independent production entities.

If the pendulum does swing back, in part, to the glory days of independent production on conventional TV in the U.S., that may bring back the production engine that created big golden hits like Hill Street Blues and NYPD Blue. It would be a shame if that is the case, to see the decline of independent production in Canada just as the shift globally is to more diversity. That is why it was gratifying to see a recent CRTC notice on benefits highlight the importance of independent production.

TV in Canada has definitely got a lot better because there have been checks and balances between consolidation and diversity through safeguards on independent production. Shows like Murdoch Mysteries, Rookie Blue, Continuum, Mr. D and Republic of Doyle prove domestic shows are increasingly popular with Canadian audiences and that is what matters most. Let’s never forget that these shows are often more popular than the so-called golden age shows because they are really good.

But the talent is also there in Canada to produce critical successes like Orphan Black or another Intelligence. And if we look to Orphan Black for guidance on how to create more success stories for the golden age it may be the scale of the conventional network like CTV balanced with a strong independent production sector and the increased level of participation of an international partner like BBC America that turns out to be the secret sauce that creates more of these success. Stay tuned but let’s not discount those shows that the audience has already signaled they like. To repeat an earlier comment, it’s audience that ultimately matters; a lot.

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