Commentary

TV/Movie Content Producers Push High-Quality Shows As Solid Business Plan

Media content producing studios  -- TV and movies -- think of themselves as valuable to the entire entertainment ecosystem. But are they really more abled soldiers of the good fight?

Michael Burns, vice chairman of Lionsgate, on Tuesday talking on CNBC, reiterated a discussion he and John Malone, a major investor in Lionsgate, made years ago. Being a content provider is akin to being an agnostic business partner -- with some ammunition of sorts -- to any and all TV distributors.

This includes any linear TV networks, traditional pay services selling bundles of linear TV channels; digital on-demand subscription platforms, or other kinds of TV apps -- all to help all parties make lots of money.

“All of these places have the same issue: What are they going to put on?” said Burns. “Seventeen years ago, John and I came up with a simple strategy: be the benevolent arms dealer.”

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Burns also referred to a recent investor day, where Malone and legendary media investor Gordon Crawford talked about “predator and prey in terms of where on food chain content fits.” That all sounds like a possible battle plan for some.

For its part, Lionsgate has 16,000 films in its library and has 90 different TV shows on 40 U.S. networks. Currently, it is spending $2 billion in new movie/TV projects, including TV-movie productions for its recently acquired Starz premium cable network group.

Burns says Lionsgate -- which is enjoying a critical and financial success with its theatrical film release “La La Land,” totaling $132 million in worldwide box-office revenue so far -- is no Netflix. Netflix is spending $6 billion in content development in 2017.

Whether a big or medium-size growing TV-media company, the strategy is clear when working in the premium TV-movie game. Spend heavily on TV-movie production dollars for high-quality programming and the buyers -- traditional and new platforms -- will show up.

Even in China. Burns says in 2016, Lionsgate had its best year ever in terms of selling its theatrical movies in that country -- up 65%.

Generally, few media content producing companies have problems with countries like China: They are net exporters. But considering recent combative talk concerning trade with China by President-elect Trump, might that change? Burns wouldn’t comment.

Right now movie/TV companies have the guns. But can they continue find new friendly bullets?

1 comment about "TV/Movie Content Producers Push High-Quality Shows As Solid Business Plan".
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  1. Ed Papazian from Media Dynamics Inc, January 18, 2017 at 2:21 p.m.

    Wayne, every program content supplier, be it a broadcast TV network, a cable channel or a SVOD service, tries to obtain "quality" programming, whatever that means? Indeed it seems to mean different things to different people. To some, "edgy" dramas about vampires means "quality"; to others, it's shows like "Law& Order" and its many clones, spinouts, etc; still others---some might call them, "the deplorables", probably believe that "The Jerry Springer Show" offers a "quality" experience. The problem arises, not just in defining exactly what is meant by "quality content" but also what the development and production costs of such a show might be, how many of the right kind of viewers , hence ad dollars it will attract and, most important, its appeal in the syndication/SVOD rerun aftermarket, where the real profits are generated. Seeking "quality content" that delivers profits at an affordable cost  should be the cornerstone of every content supplier's---or wannabie's-----business plan, but it's not an easy goal to attain. Just ask the broadcast networks who've been trying the required balancing act for decades, they'll tell you how difficult----and risky---such a strategy can be.

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About the Author

Wayne Friedman is West Coast Editor of MediaPost. You can reach Wayne at wayne@mediapost.com.