A+E Networks Showers Its ‘Preferred Producers’ with Valuable Information, Luxury and RESPECT! Why?

Were you invited to the ‘Big W’?

  • We’re not referring to the Royal Wedding
  • But to the W Hotel in trendy Miami Beach

That’s where A+E Network’s senior executive team recently poured on the RESPECT for their ‘preferred producers’

  • 20+/- top companies were invited
  • They were thoroughly briefed on strategies for the major channels: A&E, History and Lifetime, as well as the digital channels led by Bio 
  • And as they left for the airport, they were handed a nice check to develop an idea for AETN

Two Big Takeaways

  • Now that’s RESPECT!
  • Producer feedback: “AETN is light years ahead of the competitors in marketing itself at the 1st call to make when we come up with a great concept for a series.”

Recap: The Preferred Vendor System

So why do networks concentrate their luxury weekend getaways – and commissions  – on ‘preferred producers’?

Reliable Execution

  • Successful producers enjoy a reputation for delivering successful programs on time, on budget, and with the minimum drama

Access

  • Established producers enjoy day-to-day interaction with their commissioners
  • Success creates access and opportunities to pitch
    • They know the channels’ audiences – their composition and flow
    • They can see where their clients are hurting
  • They take advantage of the numerous informal opportunities to pitch concepts that will strengthen the schedule

Efficiency

  • Each new producer brings along a supporting cast that includes outside counsel, talent and agents, and inside staff from legal/business affairs, production, finance and so on
  • By working with proven production companies, the channels limit the circle of outside professionals with whom they must establish relationships.
    • Networks want their reliable producers to stay in business
    • They don’t want to ‘educate’ new production companies year after year

Stability

  • Networks want their reliable producers to stay in business
  • They don’t want to ‘educate’ new production companies year after year

Scale Economies

  • Channels achieve lower costs when producers apply their staff costs and other overheads across multiple projects

Financial: Access to Credit

  • Networks used to pay producers 45+/- days, provided that the contracts/ invoices/ workflows/ and mysterious corporate omens were aligned
  • Payment terms have since slipped.
    • And slipped! 120+ days is common
  • Producers rely on crews of staff and freelancers, who tend to live from paycheck to paycheck
    • Waiting for 4 months is not an option
  • Producers cashflow all the other operating costs
  • Production companies also need credit lines for large equipment purchases
  • Banks are stingier in offering credit than in working memory
  • Only ‘preferred producers’ enjoy the scale and stability to qualify for the $1+/- million line of credit needed to cashflow series for the systematically late-paying networks

Minor League System

  • Fortified by the stability of the preferred vendor model, the networks freshen up their pipelines by trying out a handful of new producers each season
  • They typically start them on Specials and digital channel projects

Keeping a Paycheck

  • Development is a risky environment in which managers above all want to keep their jobs
  • Few new programs succeed, much less become hits
    • Bosses probably won’t yell at a development team if Original Productions delivers a bomb
    • They are less understanding when a development exec champions a promising new producer who fails to deliver

The Parachute

  • Programming executives enjoy notoriously brief careers
  • Many of them build relationships with producers who may employ them after they get the boot in the inevitable corporate reorg

Want an Invitation to the Next ‘Big W’ Party?

Don’t despair! The ‘preferred vendor’ system is not a one-way street:

  • Successful producers seek a premium from the channels
  • They say:
    • “Look at our track record! We can make you a hit. Or we’ll save your job if your show  idea bombs
    • “And because we have these special qualities, we deserve a premium
    • “We want you to pay us 10 percent more than you would pay a non-star producer for the same series
    • “And let us retain music publishing rights, a larger share of international sales, and a few other benefits.”

Networks – like all businesses – become anxious and unhappy when their vendors exercise such leverage. They say ($,000):

  • “Hmmm. The ‘real’ cost for this 12-part primetime series is $400/episode.”
  • “The 10% premium for the entire series is $40 x 12 = $480!”
  • “Plus those other backend benefits!”
  • “That’s a lot of money that we can spend on upgraded sizzle reels, pilot segments, temps, lost margin, weekends at the W … whatever!”
  • “We want options!!”

And so the networks are always grooming tomorrow’s ‘preferred producers’ (See above: ‘Minor League System’)

  • The emerging stars are thankful when they earn their big step up in scale
  • And in their gratitude, they would never angle with their corporate mentors for a 10 percent premium
  • Until …

Essential Reading

Preferred Producers

AETN / Development Processes

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Tribeca Film Institute Grants

  • The TFI has announced award winners and grantees for the Tribeca All Access Program, Latin America Media Arts Fund and the TFI Documentary Fund
  • Twelve films were selected and a total of $125,000 was awarded in funds
  • And watch for our upcoming posts on the TFI’s grant-making programs

SPEAKING ENGAGEMENTS: Toronto, Chicago, La Rochelle

TORONTO
Hot Docs
Broadcasters Revisited
Check in with key broadcasters and hear exactly what is new, what is not,
and what you need to do to work with them
Anna Miralis, Channel 4 UK
Craig Colby, High Fidelity HDTV Canada
Ed Hersh, Discovery Emerging Networks U.S.
Simon Kilmurry, POV U.S.
Tuesday, May 3, 11:00A
Hot Docs Rogers Industry Centre
Email to arrange a meeting with Peter Hamilton in the Big TO

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CHICAGO / MID-WEST PRODUCER WORKSHOP
Thursday, May 19
Don’t miss our Chicago workshop!
What are the key trends in the Unscripted industry?
Where are the opportunities?
What are the networks looking for?

Pitching secrets! And much, much more!
Presentation by Peter Hamilton
Guests speakers: Jonathan Towers & Mike Schmiedeler, Towers Productions
Mix and mingle with other television professionals from Chicago and the Midwest
Hosted by Michelle De Long and Tim Horstman
Thursday, May 19
Location: Fletcher Chicago
1000 N. Northbranch St
Chicago, IL 60642
5:00PM-6:45PM Mix, mingle, eat and drink
6:45PM-8:45PM Educational Session and Guest Speakers
8:45PM- 10:00PM Mix and Mingle
NATAS and WIFC members receive a special discount.
Click here for more information!

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LA ROCHELLE
Sunnyside of the Doc
La Rochelle, France
June 21-24
Watch for details!

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