The Documentary Channel: Cash Positive and a Sweeter ‘Sweet Spot’

At Westdoc, we met with James Ackerman, president and CEO of the Documentary Channel (DOC). We knew James in a previous life, when he was a respected executive at Sky UK.

Documentary Channel is a 24-hour niche television network ‘devoted to documentary films and the independent documentary filmmaker’.  The tagline is Lights. Camera. Action.

History

  • Founded in January, 2006
  • Launched as a public-interest channel on DISH only
    • The FCC public-interest remit bars the sale of commercials
    • LinkTV, which programs quality, issue-driven docs, operates under this rule
    • LinkTV has been supported by leading philanthropies, including the Bill and Melinda Gates Foundation
  • Documentary Channel sold PBS-style underwriting messaging or packaged some of its films in sponsored blocks.
    • But it was unprofitable
  • DOC converted to a full commercial network in August, 2009
    • It launched on DirecTV in March, 2010

Financial
According to James Ackerman, DOC is now on a solid footing:

  • “We are unrated, and rely on revenues from direct response ads, as well as limited brand advertising.”
  • “Twelve months following our relaunch as a fully commercial network, we are producing a cash profit.”
  • “We have a small team and we invest all the available resources in primetime programming.”
  • The channel is owned by numerous investors, and is based in Nashville.

Distribution
Documentary Channel is distributed to over 25 million full-time homes via DISH and DIRECTV

  • “Several cable affiliation agreements are in various stages of discussion.”

Pipeline

  • New hours  – 2011: 180+/-
  • October 2010: 13 films premiered in primetime

Categories
“Feature documentaries from independent filmmakers dominate our schedule.”

  • “They comprise more than 70% of our hours acquired and of our scheduled hours.”
  • “The remainder is made up of shorts, our own original productions, and an ‘Other’ category of sponsored documentaries.”

Schedule
“DOC schedules, eclectic and award-winning documentary films of all lengths and genres.”

  • Features are premiered every Saturday night
  • “Programs start either on the top of hour or at the half”
    • “Films are not cut for television, though they are for commercial breaks”
    • “Since the feature docs are of varying lengths, we have a strong appetite for shorts.”
  • Thematic stunts are organized around leading filmmakers and topical events
    • A recent stunt was based on the Pennebaker-Hegedus library
    • And a current stunt in this mid-term election season focuses on films about elections

Sources of Acquisitions

  • “Library package deals provide around 50% of our acquisitions.”
  • “The others are acquired as individual programs, either from individual producers (around 30% of the total) and distributors (20%).”
  • “We attend major markets and festivals, like HotDocs, where we actively acquire features and shorts.”

Exclusivity

  • DOC programs that are U.S premieres        70%
  • Reruns (off HBO, IFC, PBS, etc.)                    30%

Signature Series

  • DocTalk is our signature series and is produced by Documentary Channel Original Productions.” 
    • According to the press release, ‘The weekly 30-minute series takes a compelling, inside look at the modern world of documentary film by delving deep into the experience of the industry’s top documentary filmmakers as they bring various subjects to life.’
  • “We recently began investing in completion financing of a select few films, notably KimJongilia.”

Library Deals
The Documentary Channel enjoys output deals with Image Entertainment, 7th Art, The Film Sales Company, and other distributors.

A multiyear pact with Image Entertainment for 16 library films includes:

  • Academy Award-winner Born Into Brothels, Oscar nominees Spellbound and Murderball, plus Emmy nominees Boys of Baraka and Trials of Darryl Hunt
  • Film festival honorees such as Bus 174, Untold Story of Emmett Louis Till, Blindsight and Festival Express

License Fees:  Is That Really a “Zero”?
We asked James what the Documentary Channel pays for programs, including its ‘sweet spot’, that magical internal benchmark for the cost of a production or acquisition.

  • “Our license fees for acquisitions start at zero. That’s right. Zero! Some filmmakers license their films to us at no cost in order to secure a U.S. release.”
  • “Our ‘sweet spot’ to acquire a completed feature doc is $5-7,500.”
  • “And we have begun to contribute completion financing for unique projects, up to $35,000.”

Sweet Spot
(Feature docs)

Low                         $0
Sweet spot            $5,000 – $7,500
High                        $10,000+/-
Signature              $25,000 – $35,000 for completion finance

Program-based Marketing Initiative

  • DOC is engaged in a programming venture with Procter & Gamble and its Eukanuba line of dog food
  • Eukanuba Extraordinary Dogs is a 13-episode series that ‘showcases how dogs have been trained to capitalize on their keen senses of smell, sight and hearing, plus their loyalty, agility and other traits.’
  • The series premieres in 1Q’11

Takeaways
The Documentary Channel is a niche yet growing channel.

  • It offers an important outlet for independent filmmakers and their feature docs and shorts.

A veteran producer attending Westdoc commented:

  • “DOC is currently unrated. But Bravo Channel’s infamous U-turn shows that it is a challenge for a network to stick to quirky, independent programming when Nielsen comes knocking.
  • “We all hope that the Documentary Channel remains faithful to independents as it inevitably expands its audience and profit expectations!”

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Sheffield Doc / Fest
 PANEL
‘What Do US Broadcasters Want?
How Much Do They Pay? Who? When?’
Alex Graham, Wall-to-Wall Productions
Tom Koch, PBS International
Dawn Porter, AETN
Lisa Heller, HBO Documentaries
Moderator: Peter Hamilton, DocumentaryTelevision.com
Saturday, 06 November 2010, 10:00A

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From Our Business and Legal Affairs Desk
by Pamela Jones, Attorney

1. Rough Waters for Deadliest Catch

It’s been reported that Bering Sea boat captain and star of Discovery’s epic-rating property, Deadliest Catch, Sig Hansen, is quitting the series along with the Hillstrand brothers, just prior to the start of filming Season 7.

In a written statement jointly issued to THR.com, the reality-television stars announced that “given the current situation with Discovery we are unable to continue participating in Deadliest Catch”.

The ‘current situation with Discovery’ refers to the complaint filed by Discovery on September 15th at 12:42pm against Time Bandit Productions LLC and Johnathan Hillstrand with the Maryland Circuit Court.

The basis of the complaint is a breach of contract action stemming from a freelance talent agreement entered into by the Hillstrand’s with Thom Beer’s Original Productions producers of Deadliest Catch on April 15, 2010.  The Hillstrand’s had agreed to participate in the filming, production and distribution of a 2 hour special to be called “Hillstranded”.  The agreement reputedly contained an inducement clause signed by each of the Hillstrands individually.

The facts set forth in the complaint indicate that the brothers satisfactorily completed 14 days of principal photography after commencing work on June 12, 2010 and producers assembled a 100:00 rough cut.  The complaint used a nautical reference to describe what transpired thereafter.  The defendants “reverse[d] course’ and thereafter ‘refused to render the services necessary to complete “Hillstranded’.  In essence they failed to show up to do the work necessary to complete the special.

One can only conjecture the strong ratings and substantial ad sales revenues Discovery network programming executives expected the Hillstrand special to attract from its premier and significant re-airings cleverly stunted by Discovery.   The complaint indicates that the network is looking for $3 million in economic damages as well as attorney fees.

This may turn into a casebook example of when restraint in dealing with reality television stars is the best course of action inspite of a ‘good’ case. 

  • Deadliest Catch represents a blockbuster cash cow for Discovery 
  • This past July the series generated almost 7 million viewers per episode
  • Discovery has masterfully scheduled this series loading its line-up with ‘DC’ marathons and capitalizing on the death of Phil Harris. 

Deadliest Catch is one of the network’s most riveting and valuable properties.   With it, the fish ‘is on’ as they say.  Stay tuned to find out if this one gets away.

2. Music File Dissemination

Tuesday was good day for media companies. 

A decision was handed down by the Second Circuit Court of Appeals with far-ranging financial implications for traditional and new media companies interested in engaging in the practice of disseminating music files. 

In one of the most important recent legal cases to affect the entertainment industry, the Court has ruled that ‘a download of a musical work does not constitute a pubic performance of that work’. 

The performing rights society, ASCAP, argued that the transmission of an electronic file, containing a digital copy of a musical work, sent from an on-line server to a local hard drive constituted a public performance, even though the musical work is not audible during the transfer process. 

Had the court ruled in favor of ASCAP, the performing rights society would have been well-positioned to enjoy a windfall in public performance royalty payments from new media uses. 

But the appellate court didn’t buy the argument sparing media companies e.g. record labels, television networks, etc. the possibility of having to pay huge blanket public performance license fees. (US vs American Society of Composers, Authors and Publishers decided September 28, 2010 Docket No 09-0539-CV).

About Pamela Jones, Attorney
Pamela Jones is a transactional attorney specializing in television, digital media, music and entertainment. 

Ms. Jones has managed legal and business affairs departments at leading broadcast and cable television networks including CBS Entertainment, MTV Networks and BBC Worldwide Americas where she handled all program sales for the western hemisphere.

Ms. Jones is co-editor and co-author of Counseling Content Providers In The Digital Age:  A Handbook For Lawyers published this past June by the New York State Bar Association.