President & exec producer
Michael Hoff Productions, U.S.
The longer it takes to get a deal done, the more it’s costing me. When we sell a show to cable networks, there’s no money for development. Nobody cares that you were setting up budgets and updating treatments for two years, and spent money creating the concept and fine tuning the research. That’s never shown in the budget, it’s just the cost of doing business. On paper, our production fee and our margin is 10%, but they never give us money for what are often our real overhead costs. Our true margin is five percent. To run a five percent margin business is very dangerous.
[Also], shows are becoming more complicated to produce. We’re dealing with third entities a lot of times, whether it’s another company or a talent. In the case of a reality show, you might be dealing with a complex logistical or legal situation. The additional insurance complications make everything take forever. And networks now, DCI in particular, are very concerned about locking up talent. That has become a whole new parallel negotiation. A really fast talent deal takes four to five weeks.
The newest stage is everybody wants video, or tasters. Sometimes they’re paying for it and sometimes they’re not. The truth is, you’re always putting in more money than you get back. Demos are loss leaders in order to get the business. You’re trying to get a series, where you hope you’ll make the money, but this can backfire. Should I give out [that value] with such a limited guarantee?
As a producer, I have to become more and more clever about how to produce value and good product for less cost. One of the big challenges for me right now is, is there really more money to be made doing volume versus doing a handful of shows? The cost of creating infrastructure to do high volume is expensive.
President & exec producer
Ferns Productions, Canada
Commissioning editors nowadays are much clearer about what they want, and the deal is more transparent – you know what people will pay for an acquisition, a presale, a coproduction. That it’s clearer doesn’t make it any easier, but it’s not the deal that’s becoming more complex, it’s the market that’s becoming more fragmented. It’s a harder place to be a producer.
There seem to be two kinds of production emerging: the Supervolcano appointment viewing that two or three majors from around the world are going to put together, and the only way you’re going to get involved is as a broadcaster or a super indie; and at the other end of the scale there’s series. If you’re dealing with a Discovery or Nat Geo, they may want to take a lot of rights – maybe all rights – and the producer ends up being more like a freelancer. What’s happening is that the middle is getting squeezed. We’re entering an era where super indies are the people broadcasters are going to look to because they can’t afford to get things wrong. It will swing back again, but we’re in an era of very big or very small production companies.
The challenge in the contemporary factual market is to come up with concepts that will reach more than one audience. It used to be that if you got a premium price in your domestic marketplace, you could finance a blue chip documentary with one or two other players. Now you need three or four players. Getting something that will work for four different slots is a challenge. I think if you can solve it creatively, you’ll be able to solve it in deal terms. The expectations are higher, but we’re in a more competitive marketplace. Fragmentation in any other business puts a downward pressure on costs, so you have to be more efficient, more creative, and more imaginative if you’re going to be able to jump through the hoops.