Fox Television Studios tries new model for network TV

When Emiliano Calemzuk was tapped by Peter Chernin to take over News Corp.'s Fox Television Studios, the media giant's boutique production house, the first thing he did was move its offices off the Fox lot in Century City and away from all the glitz and glamor to a bland building next to an old gas station on Santa Monica Blvd.

"I wanted to get out of the 'lot mentality,' said Calemzuk, referring to the fancy office and fresh flowers approach to entertainment. "We're here to do things differently."

By differently, he means cheaply. After cutting the staff of Fox Television Studios by almost half, he pulled the plug  on shows he didn't think would yield long-term success, such as the TNT drama "Saving Grace."

Fox Television Studios has had a good run as of late producing for cable, with the USA Network hits "Burn Notice" and "White Collar" to its credit. Both are done faster and cheaper than a show would cost on broadcast TV.

Now Calemzuk wants to reinvent producing for broadcast TV. Rather than make an expensive pilot for a network and hope it orders the show, he is partnering with international broadcasters for the bulk of production money and trying to get the networks to commit to 13 episodes right from the start. That way, he skips the pricey pilot competition and the networks don't pay as much because much of the money has been supplied abroad.

So far his track record is mixed. While he was able to get a couple of shows on the networks over the summer, they didn't stick around after 13 episodes. One problem was since the networks had little invested creatively in the shows, they didn't feel as strong a need to market and promote them.

Now Calemzuk is trying his foreign-first approach again but getting his U.S. partners more invested as well. If he is successful, other producers and networks will take note. If he's not, he says he still hasn't lost the money that goes down the drain under the traditional approach to making series.

For more on Fox Television Studios and Calemzuk, please see today's story in the Los Angeles Times.

-- Joe Flint

Photo: Fox Television Studios President Emiliano Calemzuk on the set of the NBC drama "Persons Unknown." Credit: Carlos Somonte.

Discovery board doesn't hear a lot about Oprah

Discovery Communications' board of directors held its quarterly meeting today but anyone looking for news about Oprah Winfrey and her cable network was sorely disappointed.

While some of the cable programming giant's top executives made glowing presentations to the board, neither Winfrey nor her svengali Tom Freston were anywhere to be seen around Discovery's headquarters in Silver Spring, Md. Not even Christina Norman, chief executive of the Oprah Winfrey Network, made the cross-country trek for the meeting. That seems slightly unusual given all the attention around the network. 

Apparently there is little to update on the OWN, hence a song-and-dance from Winfrey, Norman or Freston wasn't seen as necessary. At this point, though, isn't the fact that there is little to update about the channel worth an update? The place has had a revolving door of executives and has been vague on its programming plans. Discovery has already pushed the date of the launch back several times. (Before some Discovery or OWN rep picks up the phone to scream, Webster's defines several as "an indefinite but small number.")

For now, OWN is not saying when it will launch, but already it seems very unlikely that it'll happen in the first six months of next year. There have been many executive shuffles and very little programming in the works so more time will probably be needed to get it off the ground. And then there are those who think ultimately that this channel will never fly.

Much of the channel's fate hinges on Winfrey, who is keeping quiet. Her move last week to dispatch one of her top executives -- Lisa Erspamer -- to Los Angeles to work on OWN set off speculation that Winfrey herself was thinking of moving her daytime talk show to OWN. Winfrey's current daytime TV contract is up in 2011.

A Discovery spokeswoman declined to comment on the board meeting.

-- Joe Flint

Photo: Oprah Winfrey. Credit: Brian Killian / Getty Images

CBS reports third-quarter profit; advertisers 'knocking down the doors,' Moonves says

CBS Corp., which owns the most-watched TV network, released earnings this afternoon that revealed glimmers of hope that the recession's grip on the advertising market finally might be easing.

Higher syndicated rerun sales of its television shows, including "Criminal Minds," "Medium" and "Ghost Whisperer," and an increase in TV ad revenue helped the broadcaster swing to a profit for the quarter that ended Sept. 30.  CBS reported net income of $207.6 million compared with a loss of $12.46 billion in the third quarter of 2008, when the company wrote down the value of its TV and radio stations. 

Revenue of $3.35 billion for the quarter was flat compared with the year-earlier period.

"There is no question that we are seeing strong evidence of a recovery right now," CBS Chief Executive Leslie Moonves said during a conference call with analysts Thursday afternoon. "Obviously nothing going forward is certain, and we must be mindful that the economy is still somewhat volatile."

Still, the CBS chief was bullish, saying he expects CBS' TV advertising revenue to grow this quarter and into 2010. During the third quarter, however, the company's radio and billboard division generated lower sales, further demonstrating that among media companies, local advertising has been hardest hit by the recession.

The heart of the company, the CBS television network, has gotten off to a solid start for the new fall prime-time season, and that has helped drive demand for commercial time, Moonves said.  Last summer, when CBS sold the bulk of its commercial inventory for this season, the economy was weak, consumers were wary and advertisers were holding back spending. Consequently, CBS did not sell as much network advertising time in advance of the season as it has done in previous years.

But holding back commercial inventory several months ago is now paying off. The company is commanding dramatically higher prices -- about 25% more -- for its commercial time than it did just a few months ago, Moonves said during the conference call. There is so much demand for commercial time, he noted, that CBS is jettisoning promotional spots to make way for paying customers.

"They are knocking down the doors," Moonves said. "There is a great deal of demand for our spots. Some of the other networks are not in the same position. So we are a very good buy."

CBS' total audience has grown 1% this season; it has been averaging 12 million viewers a night in prime-time. Although CBS' prime-time audience is down 6% among ages18 to 49 -- the demographic most prized by advertisers -- two other networks have seen even steeper declines. ABC's 18- to 49-year-old audience has fallen 9% this season and NBC's is off 13%.  Fox, which has had the strongest start of the broadcast networks, is up 16%.

-- Meg James

Photo of Leslie Moonves by Justin Sullivan / Getty Images

Seth MacFarlane is too much for Microsoft, but 'South Park' and 'Two and a Half Men' are no problem

When Microsoft made the decision this week to drop out as the sole sponsor of Fox's upcoming special "Family Guy Presents: Seth & Alex's Almost Live Comedy Show," the software giant said, "The content was not a fit with the Windows brand." 

The special from "Family Guy" creator Seth MacFarlane and Alex Borstein, who also works on the animated show, featured skits and bits with jokes about the Holocaust, feminine hygiene, bowel movements and incest. In other words, it was much like a typical episode of "Family Guy."

But since Microsoft has problems with that sort of stuff and seemed surprised that MacFarlane's humor knows no limits, we thought we'd look at some of the other shows on which they've been buying commercials. That way they can determine whether the programs are a good "fit with the Windows brand." We gave a list of some shows to TNS Media Intelligence, a consulting firm that tracks where companies spend money, and the results were, well, quite interesting.

Microsoft, which spent $3.2 million last season buying commercials on Fox's "Family Guy" (and an additional $1.4 million on reruns of the show that ran on TBS and Cartoon Network), really likes CBS' "Two and a Half Men." The company spent more than $4 million on it last season, according to TNS. Although it's no "Family Guy," the sitcom can get pretty racy. In one recent episode titled "Laxative Tester, Horse Inseminator," there were jokes about condoms, teenage boys being aroused and the benefits to using a bidet. We'd quote some of the lines directly (and they were crude, but funny), but odds are they wouldn't be a good fit with our editors.

Other shows Microsoft helped bankroll include AMC's "Breaking Bad," a violent drama about a teacher who becomes a crystal meth dealer after he learns he has cancer; FX's "Nip/Tuck," which usually has enough sex to make Hugh Hefner blush; and "Rescue Me," which also loves its bathroom humor. Oh, and Microsoft likes Comedy Central's "South Park," where it dropped more than $1 million on commercials.

We're not pointing any of this out in the hopes that Microsoft will stop buying commercials on these shows, some of which are critically acclaimed and very worthy of commercial support. But we know how much big companies hate surprises, and since MacFarlane's brand of entertainment seemed to shock Microsoft, consider this a public service.

As for what sent Microsoft over the edge at the taping of the MacFarlane special, that may never be known. The company was involved in the program from the get-go so nothing should have been a shock. Who knows, maybe hearing those "Family Guy" style jokes coming out of the mouths of real people instead of cartoon figures was just a little jarring. Or it was that one bit about Miley Cyrus and her dad ...

-- Joe Flint

Previous posts:

Microsoft shocked, shocked by "Family Guy" special content

Photos: Top, "Two and a Half Men." Credit: Ringo H.W. Chiu / For The Times. Bottom: Seth MacFarlane. Credit: Peter Kramer / Associated Press.

Disney plans new soundstage and production facility in Santa Clarita Valley [Updated]

The Walt Disney Co. today filed plans to build a sprawling soundstage and production complex on the northwest corner of its Golden Oak Ranch in the Santa Clarita Valley.

The proposed Disney/ABC Studios at the Ranch would occupy 56 acres of the sprawling, 890-acre ranch just off Route 14 at Placerita Canyon Road, just south of Santa Clarita. Plans call for six pairs of soundstages, talent bungalows, administrative and production offices, storage and a commissary and other amenities.

The project would be a much-needed boost to Los Angeles' entertainment-industry economy, which has been buffeted by a production slowdown triggered by the recession and the decade-long outflow of film and TV jobs to other countries and states such as New Mexico, Lousiana and New York that offer generous tax breaks and credits. Disney-owned ABC moved its own sitcom "Ugly Betty" from Los Angeles to New York last year, which helped spur the state Legislature to implement its own film tax credit program this year to curb so-called runaway production. Still, as Disney's announcement attests, the bulk of television production remains in Los Angeles.

Richard Ballering, executive director of production for ABC Studios, said the project would address the studio's shortage of production facilities.The network can have as many as 16 to 23 television productions taking place during the height of pilot season. With only seven soundstages on the Walt Disney Studio lot, production ends up scattered at facilities throughout the region, he said.

At the same time, Ballering said audiences are demanding more varied settings for prime-time dramas like "Brothers & Sisters," which now occupies four of Disney's seven soundstages. With indoor space at a premium, Ballering said, more and more production is taking place on location throughout Los Angeles -- a costly proposition, at a time when ad revenues are shrinking.

These needs set the stage for ABC Studios at the Ranch, whose 216,000 square feet of soundstage space -- 18,000 square feet per soundstage -- could accommodate four established shows or six freshmen series.

"This will help us to better manage our portfolio of shows," Ballering said.

Shopping 'Southland'

So the folks behind the recently canceled "Southland" are working the phones today, hitting up every cable network they can think of that might be interested in the cop drama. 

First on everyone's list for taking the departed NBC drama is TNT. For starters, "Southland" is produced by Warner Bros., which like TNT is owned by Time Warner, so there is a family connection. Second, while "The Closer" is still going gangbusters for TNT, the network recently lost "Saving Grace," and its other dramas, including "Dark Blue," have not been setting the world on fire.

While "Southland" certainly would be a good fit on TNT, it remains to be seen if the network would want to buy someone else's castoff. With six episodes of "Southland" already in the can, TNT may be able to negotiate a decent price, and since Warner Bros. will already be getting paid for those shows by NBC, it might be willing to cut a slight break on the license fee. Then, if the show were a success for TNT, it could ask for more money. NBC was paying about $1.5 million per episode for the show, people close to the production say. That is not a huge fee for a cash cow like TNT.

Another likely network would be A&E. However, we're told A&E has already passed. And A&E is partially owned by NBC, so that might have been a problem politically even if it did want it. USA Network is totally owned by NBC and "Southland" is much too dark for them, so that's out.

That brings us to AMC, home of "Mad Men" and "Breaking Bad." They like to spend money there, but everyone thinks they are the new HBO, so they might not want to sully their image with a show from a (cough) broadcast network.

FX already has a ton of programming, and while "Southland" may be gritty (there's that word again) for NBC, it's "Mr. Roger's Neighborhood" for FX. 

People will say it should go on HBO or Showtime, but it's not nearly quirky enough.

So unless Food Network or The Weather Channel (whoops, that's NBC again) want to go in a completely different direction, the only real candidate out there may be TNT.

Let's see if blood is thicker than money.

-- Joe Flint

Deciphering NBC's Southland move

NBC axes `Southland'

NBC and 'Southland' producers worried about the bleeping FCC

Photo: "Southland" Credit: Richard Foreman/NBC Universal

L.A. schools are learning the Hollywood game

L.A. schools are getting an education in Hollywood: It pays to be film-friendly.

Half a dozen films and TV series filmed in the Los Angeles Unified School District this summer, contributing nearly $1 million in revenue to the district. That's double the amount of film revenue the district collected this time last year, according to FilmL.A., the film permit group that has its own manager who coordinates filming in schools.

"We are seeing more family and school-situation scripts being penned and scenes filmed,'' said FilmL.A. spokesman Todd Lindgren. "School officials also are recognizing that filming revenue can offset some of their budget challenges."

The LAUSD charges $2,600 a day in use fees, with $2,000 going to the school and $600 that the district distributes among other schools. That does not include custodial fees or any donations that schools many receive from filming.

"The Secret Life of the American Teenager," the popular ABC Family drama starring Shailene Woodley, Daren Kagasoff and Molly Ringwald, will shoot a dance scene next week at John F. Kennedy High in Granada Hills (see accompanying chart). The show, in its second season, normally films exterior shots at Grant High School in Van Nuys, but the gym was booked that week, said location manager Mike Beche.

Kennedy High was eager to accommodate, Beche said. "They've moved volleyball games for us. They've gone way beyond what they should have."

"The Secret Life" is just one among several TV series that have filmed in L.A. schools this summer. Among them: "Three Rivers," the CBS drama about organ transplants;  "Men of a Certain Age," the TNT series starring Ray Romano; and the Fox comedy "Glee."  (The best-known high school TV show, "90210," mostly shoots its school scenes in Torrance and El Segundo, but also films in LAUSD schools.)  The just-released movie "Fame," an update of the 1980 musical, was shot at Le Conte Middle School in Hollywood. 

"When schools are flush with money, they are not as film-friendly," Beche said, "but all these schools need money and they know we're a great revenue source."

-- Richard Verrier

DVR usage growing fast, and that's good and bad for TV

Digital video recorders are a double-edged sword for the broadcast networks and a single-edged one for cable channels, according to a lengthy report from Sanford C. Bernstein Co. media analyst Michael Nathanson.

With DVR penetration near the 30% mark, Nathanson investigates who is using the technology and what it means for the entertainment industry. Though some of his findings are expected (the wealthiest are the biggest users of the technology), others are surprising (consumers record more broadcast shows than cable shows). Even more provocative is Nathanson's pitch that broadcasters and cable networks should push for a cut of the revenue cable and satellite operators get from selling cable boxes with DVR capabilities.

"The emergence of this technology over the past decade has quickly altered the economics of the television industry," Nathanson wrote. The bad news is that overall, live television viewership dropped 4% in the 2008-09 season. Nathanson doesn't attribute that drop entirely to DVRs, but it is probably a factor. More disturbing is that the big four broadcast networks had declines of 13% in live viewership.

The good news, Nathanson said, is that the gradual change in ratings to include DVR viewership is helping broadcast television more than cable. DVR viewership has boosted broadcast ratings by 17%, and the skipping of commercials even went down a little this year compared with last year, according to Nathanson. "Our analysis shows that consumers are overwhelmingly 'DVRing' broadcast content compared to cable network content," he said.

Content companies, Nathanson argued, should try to use the growing popularity of DVRs as leverage to squeeze money out of the cable and satellite companies that sell the service to consumers. "DVRs are being sold to watch content," Nathanson said in an interview.

That's true, but somehow we anticipate that distributors will respond that programmers asking them for a cut of the revenue they get from DVRs would be like auto manufacturers asking gas stations for a piece of the revenue they make from selling fuel.

-- Joe Flint

Disney's Iger needs to move quickly to name new studio chief

Walt Disney Co. Chief Executive Bob Iger needs to act quickly to replace studio head Dick Cook if he wants to avoid further destabilizing Walt Disney Studios. Cook's abrupt departure has been a source of anxiety and distraction for the thousands who worked for him, not to mention the many stars and filmmakers who crave stability and need assurances that their projects will stay on track. The company is also trying to figure out how to integrate its pending $4-billion acquisition of Marvel Entertainment into its own operations and be attentive to its recently struck distribution deal with Steven Spielberg's DreamWorks.

Iger would presumably have someone in place for the upcoming board meeting in a couple of weeks.

While Iger's not whispering in our ears, one candidate that's a source of speculation within Hollywood is Disney Channels Worldwide President Rich Ross.

Ross' star has been on the rise within the entertainment company since his successful rehab of Disney Channel, once an also-ran pay cable network that now reaches nearly 100 million households nationwide  and has generated such billion-dollar creative franchises as "High School Musical" and "Hannah Montana."

The 47-year-old executive is well regarded within Disney for being a forward-thinking and strategic executive who is also a good manager. As someone who began his entertainment career in the mail room of the William Morris Agency, Ross has always appreciated the value of strong talent relationships. He has also helped Disney Channel forge relationships with the company's other divisions, so a popular TV property like "High School Musical" can generate additional revenue for the company through sales of music CDs, movies, merchandise, stage shows and theme park attractions.

Such cross-divisional collaboration and "brand management" is a high priority for Iger, who often extols the work of Disney Channel on calls with Wall Street analysts.

To be sure, Ross has had limited experience on the movie side of the business (he was involved in the theatrical projects based on Disney Channel shows), having spent his entire professional career in television.

Ross could not be reached for comment.

Another highly touted prospect for the top studio job is Pixar and Disney Animation Studios chief creative officer John Lasseter, who directed the critically acclaimed films "Toy Story" and "Toy Story 2." Lasseter is also principal creative advisor for Walt Disney Imagineering, the group that develops attractions for the theme parks.

Then again, Iger could effect a restructuring and split Cook's job among two or more executives.

-- Dawn C. Chmielewski and Claudia Eller

Photo: Rich Ross. Credit: Michael Robinson Chavez / Los Angeles Times

Ad spending 2009: Even media is buying less media

How brutal is the advertising market? Even big media isn't spending as much on big media.

Advertising tracker TNS Media Intelligence this morning issued the grim news that ad spending plummeted 14.3% to $60.87 billion during the first six months of 2009 compared with the first half of 2008. The second quarter of 2009 became the fifth consecutive quarter to post year-over-year declines.

Among those cutting back on advertising was media itself. Walt Disney Co., News Corp. and Time Warner Inc. all reined in ad spending in the first half of the year. Spending by Time Warner was down 11.1% to $574.3 million; Disney expenditures were down 11.7% to $517.6 million; and News Corp. cut its ad spending by 6.9% to $672.3 million.

The cuts were partly because their movie studios released fewer films in an effort to lower marketing costs. TNS said that General Electric Co., which owns NBC Universal, was the only media firm to boost its advertising budget for the first six months of 2009, raising it by 5.1% to $548.3 million.

Not surprisingly, automotive, financial services, real estate, tourism and retail businesses took a cleaver to their marketing budgets. Even spending to promote basics such as food and candy was down. Oh Henry!

Newspapers, magazines, television and radio all felt the pain of a dismal first half. Newspaper ad spending was off 24.2% compared with the first half of 2008; radio spending plunged 24.6%; television spending (including national network, local station, syndicated and Spanish-language outlets) was off 10%; magazine spending dropped 20.9%; and billboards and other outdoor media saw their ad revenues tumble 15.7%. 

Meanwhile, Verizon Communications Inc. surpassed perennial leader Procter & Gamble Co. to become the top advertiser by shelling out $1.19 billion during the first half of the year. Procter & Gamble, which cut its ad spending by 20%, came in second place at $1.18 billion. P&G pared its television ad budgets by a whopping 30% but it spent the same on magazine ads, TNS Media found.

The only growing media sectors were Internet display advertising and free circular inserts in newspapers. Internet display advertising increased 6.5% compared with the first half of 2008 while newspaper insert spending climbed 4.6%.

"The market has been steadily tracking at around 14% declines for several consecutive months and this represents billions of lost revenue," said Jon Swallen, senior vice president for research at TNS Media. Swallen said that early data from the current quarter "hint at possible improvements for some media due to easy comparisons against distressed levels of year ago expenditures."

-- Meg James