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Network Chiefs Talk the 'Inefficient' Model of the Upfronts

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 as part of
the first of this year's HRTS Newsmaker Luncheon series, held in Beverly Hills.

"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 commented. 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."