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Broadcast Network Chiefs: We Need to Rethink Our Business Models

With the entertainment business changing as rapidly as it has in the past several years -- content that was once limited to one screen is now distributed to many others -- broadcast networks need to rethink its business models, especially the upfront season, as its "choreographed" dance is "inefficient and wasteful."

That is according to Kevin Reilly, president of entertainment at Fox Broadcasting Company, during a panel discussion featuring the five broadcast network entertainment presidents as part of the first of this year's Hollywood Radio & Television Society's Newsmaker Luncheon series Oct. 11 at the Beverly Hilton in Beverly Hills, Calif.

"There's a holistic way of looking at the business that would be better if we didn't all bottleneck up at once," Reilly said. "When you sit back and watch the end of the season -- the vast pile of product that's made by the world's best in entertainment - some of it is kind of embarrassing...Creative is difficult, but there is inefficiency that's not good for the creators and it's not good for the entities themselves."

Part of the industry that is changing the most rapidly is content distribution, with businesses like Netflix, Hulu and Amazon opening up new revenue streams and distribution channels. Making their content available via online models could also "cannibalize a part of [the] core business," said CBS Entertainment President Nina Tassler. 

But the distribution of content to other platforms, including online models, can "create a sort of viral storm," Paul Lee, president, ABC Entertainment, added. Releasing parts of a show before its premiere date can create a buzz surrounding the series, as viewers "have a conversation that goes across YouTube, and the Twitter feeds and Facebook pages. Where it's incremental, you do it; where it's cannibalistic, you need to walk away from it," Lee said.

As content continues to move from the television screen, networks are also eyeing ratings as a gray area, with a large portion of the audience viewing the show not on its premiere date, but at a later date on DVR. Mark Pedowitz, president of entertainment for The CW, said even with great Live+7 ratings, "we don't get paid for that. You have to look at -- how do we get paid for that, and how do we find a better measurement system that's more accurate?"

Even with television's entertainment moving away from the actual television set, Tassler said, "It still starts on broadcast. For us, it's still about a big network hit show. That's the business we're in."