Monday, April 13, 2009

"Wait, so you can make money from hit shows?"

Defamer has a little post on the state of NBC's financials: USA network is its most valuable property.

Defamer also complains about USA being relegated to "the nerd table," implying that NBC flagship folks look down on their stepbrother network. But this bahavior is somewhat justified.

Follow my logic: NBC's "flagship" station is basically a very expensive show testbed in which hit shows are identified and some of their value captured. Then, only the successful shows are programmed on USA, which then serves as the cash cow that's milked for the remainder (probably 95%) of each show's value.

What impact does this have on employee pay/status for both networks? Well, the NBC flagship folks are the main innovators, who take all the risks and hunt down the winners. Their costs are huge, their profits probably small, but they represent talent that's probably hard to find and they provide the only basis for growth within the company. So they are probably very well-rewarded.

The USA people? Even though they're bringing in the cash, how much skill do you think it takes to maximize value on a roster of hit shows? That's right: next to none. I could probably run that network (Law & Order: SVU marathons all month! Set your Tivos).

So USA set historic ratings records? Of course it did. It's like the 1997 Marlins. Someone's bought it a can't-lose roster. And they should keep it up. Unlike the 1997 Marlins, this is a very sustainable business model.

1 comment:

Dori said...

I think TV stations should follow the USA Network model for success, which includes abundant programming of House and Law & Order: SVU reruns, with the occasional comedy movie thrown in. What is NOT to love. Of course they're doing great!