The program development process is changing in ways that are very consequential for the profitability of independent producers.
That’s the message from Michael Hoff, founder and CEO of Hoff Productions, based in the Bay Area since 1993.
Michael has been a great friend and valued supporter of this newsletter.
We have been sharing notes about the ‘mega-gig economy,’ his phrase to describe the new business environment for both producers and channel execs as the Cable/Satellite Era enters its slow sunset during the rise of online video solutions.
- Listen to my conversation with Michael Hoff here (20 minutes)
Snapshot: Hoff Productions
- Delivered more than a thousand hours to dozens of clients:
- Cab/Sat channels: 90%
- Commissions: 90%;
- Copros 10%
- Sponsored Content: 5%
- Broadcasters: 5%
- Longest returning series:
- Popular posts on Hoff’s business journey:
EVOLUTION OF THE PITCH PACKAGE
Michael’s highlights of the evolving development process are as follows:
- The same “Big Three” success factors have always ruled every pitch:
- The Idea
- The Company
- The Price Point
- The presentation materials have constantly evolved as the channels require more complexity, nuance and sophistication in the pitch:
- We used to pitch with a one-sheeter.
- Then we’d add pictures and graphics.
- Channels began asking for longer and longer treatments, sometimes 20 pages.
- Low-cost video tasters came next, 2-3 minutes, selling the concept.
- Then that evolved into a talent-focused video presentation.
- Buyers tended to stop reading pitches unless they could see something of the show on screen.
The Ever-expanding Sales Tool
- Development deals have replaced pilots.
- Pitch videos must look more like the final product… even better than the final product.
- Often a 5-minute sizzle reel
- 2-3 day shoots and 3-5 day edits are typical for a sizzle.
- For Docu-Reality and character-based series, “pitches must arrive with signed talent. Nothing can be speculative. Everything must be known.
Networks are tending to launch new series with limited promotional budgets. Meanwhile there is so much noise out there, it’s extremely difficult to gain traction with new programming. That’s why so often they just re-up the already successful series, but of course that can lead to a “Trading Spaces” like catastrophe where a network has bet the farm on one show and it collapses. So they are relying on placements within their schedule to generate flow to new shows. There is no patience for building growth. If a series doesn’t pop in three weeks, it can be pulled. Therefore, new ideas are rigorously screened, and re-screened. It’s threading a needle for everyone. Michael Hoff
Cost of Sale
- Between research, field and post-production costs, and legal for locking down talent, a typically solid development pitch costs us about $30,000.
- Channels may contribute from nothing to $15,000, and sometimes up to $40,000 to fund further development and tape, but most of the time we fund on our own.
- The network’s contribution rarely if ever covers the cost.
- And the IP is tied up, restricting simultaneous pitching to other channels.
- The network’s message is: “We don’t fully understand this idea, and we need a completely realized pitch package so that we have the confidence to green light it. If you want our business, give us all the answers, and if comes out of your pocket, so it goes.”
If your sales batting average is maybe one in every six or eight pitches, you can do the math: to generate $10,000,000 of business a year, it would be very easy to spend $500,000 and probably more just in sizzle production. That’s the “Cost of Doing Business,” as they say. Michael Hoff
What’s Happening Inside the Channels
- General topic areas are more flexible for networks.
- But pitch materials and entry points need to be precisely tailored for each network.
- Demographic targets have narrowed: Age, Race, Location, Income, Education
- We often pitch to teams with limited authority to greenlight. There’s been a rise of group decision making.
- Buying seasons are flatter – and money flows in unexpected gurgles.
- “The challenge is to adapt to the constantly evolving volume of work while guaranteeing quality and maintaining healthy relationships with network teams: Development, Production Management, EPs, Legal/BA, and more.”
Uncertainty is Infectious
- Network consolidation and mergers are driving internal restructuring of management teams.
- Job uncertainty and rounds of layoffs impact decision-making.
- Greenlighting is slowing down.
- There is increasing emphasis on projects that arrive with baked in promotion, marketing, or social media support.
- Programming strategies have been volatile at some channels.
The Strategic Question
We are now in the era of thousands of channels. That means price-points and volumes are going to be all over the place. The difficult thing for companies like mine is to figure out how to target resources. Do you focus on the tried and true when the cable industry is contracting? Or do you focus on the new era of video streaming that lacks a business model, infrastructure, and consistent systems that can deliver return on development investment. Michael Hoff
- Thanks to Michael for so generously sharing his experience of the business processes.
- And congrats, Michael and Julia: A happy day coming up. Delighted to be your friend.
- Read my Takeaways in my next post.
What’s Next? I’m forever challenged by the scaling issue. I feel like I’ve been talking about it for 25 years. Networks expect certain services. They want experts on your team that match experts in each of their departments. That’s expensive. Now consider a world where business revenues are constantly dramatically rollercoastering, even more than in the past. How do you deliver consistent services? I think the answer may be more temporary alignments, partnerships, and service agreements. I think, at least for me, it may be more like you imagine movie directors who have a “bungalow” on a studio lot. They have a limited office support, some development support, and they only create additional infrastructure when they go into production. And by the way, I think that hurts me. I have one of the best producing and post-production teams in the country. We are better, faster, and, dare I say it, deliver better value than anyone around. But… maintaining all that is costly. Michael Hoff
Hoff Productions: Recent Series & Specials
- Animals Gone Wild S3 (NatGeo Wild)
- Detroit Steel (History)
- Sharkatraz (NatGeo Wild)
- Jeremiah Bullfrog Forks It (Complex)
- Rocky Mountain Animal Rescue (NatGeo Wild)
- Texas Homewreckers (HGTV)
- Killer Swarms (Animal Planet)
- Weird True & Freaky S4 (Animal Planet)
- Ted Bundy: Serial Monster (Reelz)
- Alcatraz: The Greatest Escapes (Reelz)
Our posts on how Hoff managed — and responded to the business cycle are among our most insightful most popular all time:
- A Preferred Producer: Hoff Productions between Basement and Buyout (2010).
- And our update in 2015: An Independent Producer Manages the Ups and Downs.
- Read my classic 3-parter with Stephen Harris: How to Pitch & Sell Your Project to a Network. Case Study: A&E.
Hoff Productions is one of world’s elite creators of documentaries and docu-reality content. Over the last 25 years Michael Hoff and his team have developed and produced more than a thousand hours of powerful, entertaining, and globally distributed programming. Some new and recent series include NatGeo Wild’s “Rocky Mountain Animal Rescue,” Animal Planet’s “Weird, True, & Freaky,” Reelz’ “Ted Bundy: Serial Monster,” History Channel’s “Detroit Steel,” Complex Network’s “Chef Jeremiah Forks It,” Science Channel’s “What Could Possibly Go Wrong?”
Headquartered in the San Francisco Bay Area with a development office in Los Angeles, Hoff Productions has an experienced staff of producers, directors, writers, editors, and program developers. Some of Hoff’s clients include Animal Planet, NatGeo Wild, History Channel, Netflix, Complex Networks, National Geographic Channel, Travel Channel, Science Channel, Discovery Channel, A&E, Investigation Discovery, FOX, TLC, PBS, Velocity, and HGTV.
See the current Hoff Productions company profile here.
My Upcoming Markets & Conferences
- SUNNY SIDE OF THE DOC
- La Rochelle, France. June 25-28
- Panel: “The Future of Pubcasters: Adapt or Die”
- NEWF: Nature, Environment & Wildlife Filmmakers Congress
- Durban, South Africa. July 16-18.
- Director Noel Kok has organized a great program that combines conservation and wildlife film-making.
- Make it your reason to come to Africa. More to come….