Studios fret over online crack in cable window

The majors have been worrying for a long time about flat domestic box office and plummeting DVD sales, but there's a newer area of big concern: the coin from the lucrative basic cable window. Increased online exposure for film product -- via Netflix, iTunes, Vudu and the proprietary site of premium cablers, such as HBO Go -- could cause basic nets like FX, TNT, Comedy Central and others to cut back on acquisitions. And billions of dollars are at stake.Time Warner corporate chief Jeffrey Bewkes says his conglom's TNT and TBS would reduce purchases of some theatricals, though features would still remain a force. "The big movie packages, particularly really expensive, giant movies, are a little weaker because they are getting seen so many places," Bewkes told a Sept. 22 investor conference. He added that the company will fine-tune how it acquires films, focusing more on "certain evergreen titles and genres that are essentially in the sweet spot."Even such mildly discouraging words have seldom been heard in the two decades that theatricals became ever-increasing mainstays in the schedules of many basic networks. Bewkes' comments are particularly significant because his company is both a buyer and seller of movies. For the congloms' studio arms, revenue from cable has long been critical to their economics -- with premium subscription services and ad-supported basic channels both playing a major role. Every film that's part of a pay cable output deal generates a wad of cash in the first premium window. And while payouts may be reduced for a film's later, basic cable window, basic cable networks actually spend more overall dollars for film product than do the premium nets, because there are so many more basic channels with so many more slots to program. Plus, basic cable airs the full gamut of movies, ranging from recent high-budget blockbusters all the way to films that have finished their first-cycle telecasts -- so-called library or catalog titles -- which appear far less often on premium services. According to SNL Kagan, basic cable channels in the U.S. will fork over more than $2.8 billion licensing theatricals in 2011, compared with the just-under $2 billion spent by premium pay channels for theatricals.A lot of the movie spending is concentrated in a dozen basic channels such as FX, Syfy, TBS, Turner Classic Movies and Comedy Central. These heavy users of movies are critical to the economics of the basic window. (Theatrical slots have even appeared on basic networks such as Animal Planet and the Weather Channel in recent years, but those dedicated movie nights didn't stick.) Addressing Bewkes' statement, Deana Myers, senior analyst at SNL Kagan Research, says, "If one major buying basic cable network says it's not going to acquire as many films, that's going to have an impact. Pricing will come down if you have fewer buyers in the marketplace. Then it depends if other networks step in to buy films."According to one school of thought, however theatricals won't suffer much loss in basic cable, because their star power makes them easy to promote and repeat. In the multichannel cable dial, big stars and glossy production values prompt America's nomadic channel surfers to pause. Even better -- and perhaps flying in the face of the idea of online viewing devaluing a film -- familiarity has its own cache."Basic cable networks deliver reliable ratings by way of quality brand-centric content that people love to watch over and over," says Ken Werner, president of Warner Bros. domestic television distribution. "It's like spending time with an old friend."And while it can be argued that theatricals increasingly are taking a back seat due to original cable series gobbling up time periods and program budgets, first-run cable series remain an expensive proposition, especially if they flop. On the other hand, movies are usually licensed after their theatrical premiere, when they are known quantities, with predictable pricing tied to box office, and are generally much cheaper than original fare and provide high-quality fodder to fill cablers' vast 24-hour schedules.Jim Packer, Lionsgate president of worldwide TV and digital distribution, adds yet another positive: "Films not only rate well, but will provide each network with a promotional vehicle for their originals." Still, if online viewing adversely impacts ratings for a film on cable, the result could hit basic cablers harder than the premium outlets, simply due to their different business models. The top-grossing theatricals command about the same price from premium pay outlets like HBO and Starz as they do from basic, which these days is around $25 million per title. But basic cablers are partly ad-supported, -- as opposed to the ad-free, subscription premium networks -- which means that any reduction in ratings would cause a similar reduction in revenue.And basic cablers buy films differently that the premium channels do. Premium nets lock in all the films of a major studio for multiple years in output deals, committing to most films sight unseen. But basic networks generally buy only a handful at a time, making their deals only after films reach the theatrical window and their box office is known. Perhaps some basic cablers will want to look into online viewing trends for specific movies as well. Contact the Variety newsroom at news@variety.com

Game 7 around the world Series Bumps Fringe, Interferes with NBC Premieres

David Giuntoli, Josh Jackson Peter Bishop's return to Fringe will have to wait another week. Have a look at what's on tv inside our records guide Game 6 around the world Series was pressed back every day because of rain on Wednesday. On Thursday, the St. Louis Cardinals beat the Texas Rangers to pressure a tie-breaking game being carried out Friday evening. Consequently, Fox will push new cases of Fringe and Kitchen Bad dreams or nightmares to November. 4.Fall TV: Have the lowdown on all the new shows Game 7 may even disruptthe final season premiere of NBC's Chuck (8/7c) together with the series premiere in the network's new mythic cop drama Grimm (9/8c). Over on CBS, A Gifted Guy, CSI: NY and Blue Bloods are actually transformed by repeats. Will you watch baseball or have a look at regularly scheduled television?

Sky Deutschland picks up TMG package

BERLIN -- Steven Soderbergh's revenge thriller "Haywire," starring Gina Carano, and "The Twilight Saga: Breaking Dawn -- Part 1" are heading to Sky Deutschland as part of a film rights deal inked with Herbert Kloiber's Tele Muenchen Group. The agreement, announced Wednesday, also includes such high-profile pics as Phyllida Lloyd's "The Iron Lady," with Meryl Streep; Robert Schwentke's action comedy "Red," starring Bruce Willis and Helen Mirren; and Yasemin Samdereli's local hit "Almanya." The deal also provides Sky with new rights for the feevee's expanding product line, which includes services such as Sky Go and Sky Anytime that allow customers to access content in a variety of ways. Contact Ed Meza at staff@variety.com

'Fear Factor' returns 12 ,. 12

NBC has set coming back date for "Fear Factor." Peacock is returning the venerable reality skein for any two-hour premiere at 8 p.m. 12 ,. 12. Show, that will run for eight days, will fill the Monday timeslot vacated by "The Sing Off," that will have ended the prior week. Premise of "Fear Factor" is to determine what participants can endure probably the most stomach-churning endeavors. They that wins makes a $50,000 prize. The show broadcast on NBC from 2001-06 and was located by Joe Rogan, who'll go back to his emcee responsibilities for that second go-around. "We now have taken the 'Fear Factor' franchise that lots of fans remember fondly and also have ramped up to really make it much more challenging and competitive than in the past,Inch stated NBC alternative topper Paul Telegdy. Skein is created by Endemol USA and professional created are Matt Kunitz and David Hurwitz. Contact Stuart Levine at stuart.levine@variety.com

Bop Decameron or Nero Fiddled: Which Woody Allen Title is More Problematic?

Some of Woody Allen’s best films have had simple, straightforward film titles (Annie Hall! Crimes and Misdemeanors! Hannah and Her Sisters! Even Midnight in Paris…). But you know, I thought there was really something catchy to Bop Decameron, the former title of his current Rome-set next flick. Apparently, I may have been the only one who liked it; as Anne Thompson reports, Allen’s changed the title to Nero Fiddled. Riiiight. There was something so romantic, so Fellini-esque about Bop Decameron! Who cares if no one “got” it, as Woody lamented. Reports Thompson on Hollywood: “‘I couldn’t believe how few people had heard of The Decameron even in Rome,’ [Allen] says. ‘And the few that did assumed the movie was based on Boccaccio’s tales which it’s not.’” Well, fine. But Nero Fiddled? Here’s what comes to mind in free association: - Nero…. neurotic. No thanks. - Nero fiddled. Fiddled with what? - Nero plays a fiddle? What kind of movie is this, again? But you tell me; which is the better title for the pic, set in Rome and starring Roberto Benigni, Alec Baldwin, Ellen Page, Jesse Eisenberg and more? Woody Allen Ditches Decameron Title for Nero Fiddled [Thompson on Hollywood]

Analyst: Fox Could Get Around $750 Million in New Syndication Revenue After 'Simpsons' Cancellation

NEW YORK - Ironically, a potential cancellation of animated hit show The Simpsons could open up additional revenue to the tune of around $750 million for News Corp. and its Fox unit, RBC Capital Markets analyst David Bank said late Tuesday. Plus, it could add to the company's stock price by boosting financials, he said.our editor recommendsFox Threatens End of 'Simpsons' if Voice Actors Don't Accept 45% Pay Cut (Report)'Simpsons' Money Battle: Biz Model not Sustainable, Says Fox "The original syndication deal (struck about 17 years ago) prevented Fox from selling the show into any other distribution mechanism but local broadcast," he wrote in a research note entitled "D'oh! Possible Cancellation Of The Simpsons Could Result In Windfall For News Corp." PHOTOS: Best and Worst TV Dads: 'The Simpsons,' 'Modern Family' "Ironically, the cancellation of the show would allow News Corp. to finally sell off-network syndication rights into cable channels (and potentially to online distributors)," he explained, calling the potential windfall for Fox "massive." After all, cable was "relatively insignificant" in terms of off-network syndication at the time of the original deal, Bank said. "But over the ensuing years, cable grew to be as big an opportunity as (if not bigger than) local broadcast." Fox's TV studio had said earlier on Tuesday that the financial model of the Simpsons wasn't sustainable anymore. A report said the studio was looking to cut voice actors' salaries by 45 percent. Canceling The Simpsons could allow Fox to "essentially abrogate" the original syndication agreement, "potentially allowing for about $750 million of incremental content monetization," Bank said. He estimated that cable syndication and maybe online distributors could fetch $1 million-$2 million per episode in what is a library of 506 episodes. "We believe Fox would probably only have the rights for about 15-17 seasons initially (with the rest tied-up in the original broadcast syndication cycle) and we'd imagine Fox would spread the delivery of episodes across a number of years," Bank suggested. Overall, this could create 10 cents per share-plus in stock value for News Corp. shareholders when assuming $1.5 million per episode and 60 percent profit margins, according to the analyst. A lack of a positive resolution of a labor dispute between Simpsons cast members and the Fox TV studio and a potential resulting cancellation of the show "could be more positive for News Corp. stock than one might think," Bank concluded. Email: Georg.Szalai@thr.com Twitter: @georgszalai Related Topics The Simpsons News Corp.

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