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In defense of syndication, with a little help from Jeff Bewkes

I’ve covered syndication since 2004 so I can say with some authority that the category is often treated as the television industry’s less attractive, perhaps plumper and pockmarked, sibling. The one you don’t talk that much about and don’t bring with you to parties.

I understand why. The genre is full of shows that pull in small ratings and get cancelled quickly, never to be heard from again (no examples given here so as to save myself unnecessary flames in the comments, but you know who you are Keith Ablow and Greg … dang, I already forgot his last name). It also includes some of TV’s less, shall we say, high-minded fare, and that leads to criticism and scoffing.

But in truth, syndication is the financial engine of the television industry, and to some extent, the entertainment industry as a whole.

Time Warner announced its third-quarter earnings results today, boasting profits of $822 million, nearly a 60% increase (take that, Euro zone!) compared with the same period a year ago, and revenues of $7.07 billion, an 11% improvement over last year.

Harry Potter gets to take some of the credit for that, with worldwide revenues of $1.3 billion for Harry Potter and the Deathy Hallows, Part 2. (A truly excellent film, by the way.) Other Warner’s films, including Horrible Bosses and Hangover 2 (neither nearly as excellent but still plenty profitable), also did some nice business for the company.

But Time Warner CEO Jeff Bewkes took the opportunity today to boast about what’s happening at Warner Bros. in syndication:

“We have never had so many successful comedies on the air at one time. For all the change in the TV business, in the last decade the Holy Grail of TV production is still a hit 30-minute comedy,” Bewkes said. “Not only do successful comedies set substantial prices and syndication, they can run for multiple cycles and become multi-billion dollar annuities. We’ve got four of the top seven on all of television.”

To be clear, he’s speaking of Two and a Half Men, The Big Bang Theory, 2 Broke Girls and Mike and Molly (three of which are produced by Chuck Lorre so imagine that guy’s paychecks). Of those four, Two and a Half Men is already a multibillion dollar franchise and Big Bang Theory is well on its way.Warner Bros. also has The Middle – Patricia Heaton’s quiet sitcom that everyone who’s watched loves – and that has potential to do some business in syndication. Twentieth’s Modern Family is already sold for 2013, and The Middle would pair nicely with that show. (I’m a journalist, so of course I do not take commissions for creating excellent sales pitches.) And Warner’s produces ABC’s new sitcom, Suburgatory, which is fitting right into that new Wednesday night comedy line-up.

But it’s not all about sitcoms. Warner Bros. is excited about CBS’ Person of Interest, which just got a full season order. Dramas don’t do much business in broadcast syndication, but they can command as much as $2.5 million an episode on cable.

And syndication now includes digital distribution, a phrase that is more easily understood if you label it Netflix or Hulu or Amazon. Warner Bros., in partnership with CBS, just cut a huge deal for CW programming with both Netflix and Hulu (worth as much as $1 billion at Netflix, according to analysts). Shows such as Gossip Girl, Vampire Diaries, Nikita and Ringer that previously had almost no domestic back-end value, can suddenly be counted as rich syndication assets. As digital distribution grows, more such deals are expected to be forthcoming.

Syndication might not be the prettiest girl at the party, but she’s rich. Given the choice, who would you marry?