Networks Tap Into Television Production : Entertainment: Hollywood producers worry that the trend could cost millions.

Hollywood TV producers got a troubling glimpse at their future when ABC announced its new fall lineup last month.

Two shows that appeared on the schedule were to be produced in-house by ABC Entertainment, instead of the usual outside suppliers. Both shows were scheduled in the final hours, reportedly at the behest of senior Capital Cities/ABC executives.

The news was significant because it highlighted the increasingly intense battle between the networks and suppliers over who creates programming. At stake are potentially hundreds of millions of dollars in future syndication revenue when reruns are sold to TV stations and cable networks.

TV production has historically been a big source of profit for Hollywood’s major studios, but recent regulatory changes make it easier for ABC, CBS, NBC and Fox to make their own shows.

“This is not the year of the sitcom. Nor the year of the drama. It’s not even the year of the family-values show,” observes Alan Berger, executive vice president and head of the TV department at International Creative Management. “It’s the year of in-house production, which has really established itself as a major force on the networks’ schedules.”

The numbers support Berger’s view.

Next fall, in-house productions will account for 27% of the three major network’s prime-time schedules, up from 12% five years ago. Including news programs, CBS will produce 39% of its prime-time schedule, compared to 35% for ABC and 25% for NBC. Fox, which schedules 15 hours per week of prime-time programming compared to 22 hours at the other networks, is producing 20%.

In remarks last month to shareholders, Capital Cities/ABC Inc. Chief Executive Daniel B. Burke said in-house production was a “key objective” of the company, declaring that ABC’s “most important future opportunity lies in expanded program production and ownership.”

This season, ABC’s in-house shows include a Paula Poundstone comedy hour, a half-hour comedy titled “Joe’s Life” and a one-hour drama co-produced with Columbia Pictures titled “Do the Strand.” CBS is producing the comedy “Dave’s World,” based on humorist Dave Barry’s syndicated columns, and has financial interests in five returning prime-time series.

NBC will produce “Saved By the Bell Goes to College” and “Fresh Prince of Bel-Air” for prime time along with its late-night franchise of “The Tonight Show,” “Late Night” and “Later With Bob Costas.” Fox, after having its dramatic show “X-File” rejected by CBS, put it on its own schedule.

The reason for all the stepped up in-house activity is simple: money. The networks, under persistent economic pressure, are looking for new sources of income to offset stagnant advertising revenue. And they no longer want to be at the mercy of capricious producers.

“We can schedule shows without asking permission and all that goes with that,” says John Agoglia, president of NBC Productions. “It also does away with extortion in renegotiations.”

Typically, after a hit series reaches its fourth year on the air, the producers are free to take it to another network, forcing the incumbent network to pay a hefty fee in order to keep the show. Hit series such as “The Cosby Show,” “Cheers” and “Roseanne” extracted costly renewal deals from their networks to prevent them from jumping to the competition.

In addition to the major studios, independent producers will be hurt by networks ordering less programming. They worry that they are competing on an uneven playing field and that, presented with two potential shows of equal caliber, the networks will choose their own, since the people pitching in-house shows work for the same company buying the shows.

“This is systematic programming apartheid,” complains Leonard Hill, an independent producer of made-for-TV movies. “The networks have become the umpire in their own game.”

One producer cryptically notes that the head of CBS’ 18-person in-house production staff works only a couple doors away from chief CBS programmers Jeff Sagansky and Peter Tortorrici.

And in a scheduling move that irked producers competing for the same time period, CBS placed its own in-house produced show, “Dave’s World,” in the enviable Monday time slot between “Evening Shade” and “Murphy Brown,” thus greatly improving its chances for success.

The networks, however, insist that there is no bias in either direction.

“Network programming decisions are primarily based on the shows themselves and how (the programmers) like them,” says Brandon Stoddard, president of ABC Productions, the network’s in-house production unit.

“We have to fight to sell our shows just like anybody else.”

Doing It Themselves

Since 1989, the amount of in-house produced news and entertainment programming among the three major broadcast networks has increased to 27% from 12% of weekly prime time schedule. Each week ABC, CBS and NBC schedule 22 hours of prime-time programming. Fox this season will be producing two hours of entertainment and one hour of news in-house for its 15-hour prime time schedule. Average amount of hours of in-house-produced programming per week

1989

News: 5

Entertainment: 3

1990

News: 5

Entertainment: 2

1991

News: 5

Entertainment: 6.5

1992

News: 7

Entertainment: 9

1993

News: 9

Entertainment: 9

Source: Lorimar Television