COREY’S QUESTION: If serialized TV shows are rarely profitable, how do they get made?

Today's question comes from Corey, a young actor I met several weeks ago when I gave a talk about Small Screen, Big Picture
at the Actor's Network here in L.A. Corey writes...

Given that heavily serialized TV shows like "Lost" and "Battlestar Galactica" aren't profitable because they don't play well in syndication, how do these shows get made at all? Is it the advent of DVD sales, and the popularity of box sets in particular? Are the DVD profits great enough that a series can make its money back even without much syndication? Or do you think we're about to see tightly serialized shows start to vanish again?

Well, Corey-- DVD sales and box sets certainly help make up for the costs of funding a serialized TV show, but DVD sales rarely come close to syndication money. True Blood's first season, for instance, is this year's top-sellng TV show on DVD, bringing in over $57 million. And while that seems like a hefty chunk of change, it's peanuts compared to syndication money. A couple years ago, NBC sold "The Office" into syndication (a shared window with FOX and TBS) for over $130 million... which isn't even a huge syndication deal! Some shows, like "Friends," "Seinfeld," and "King of Queens," have become multi-billion dollar franchises thanks to their syndication afterlives. (Also, DVD sales tend to decrease over time, while shows can be sold into syndication over and over again. Syndication numbers may decrease, but they're still substantially larger than shrinking DVD numbers.)

Many shows have also started landing syndication deals even before becoming bona fide hits on network television. CBS's new "NCIS: Los Angeles" was sold to USA for $1.9 million per episode... after only 7 weeks on the air! "CSI: NY" and "CSI: Miami" were also sold (to Spike and A&E) during their first seasons. These deals aren't necessarily as lucrative as syndication deals to local broadcast stations or station groups (like "The Office" deal with FOX and TBS), but they're advantageous because they usually don't rule out broadcast syndication deals, and they're up-front money.

Of course, if you look at syndication numbers, you'll notice they're not only usually bigger deals than DVD sales, they're going to standalone shows-- comedies, procedurals, etc.-- not serialized shows like "Lost" and "BSG." So back to your original question...

If DVD sales don't equal syndication sales, how do these serialized shows even get made? Why would a network or studio take a chance on something that has such a small chance of making a profit... or even breaking even?

The truth is: a lot of them don't. Sure, a handful like "V" and "Flash Forward" are still popping up, but they're much rarer than they were back in the days when everyone was trying to find a serialized hit... remember "Surface," "Threshold," "Invasion," "Reunion," etc.? Even "V" and "Flash Forward" are far from being hits... they're floundering in the ratings, and each has had its share of tribulations. ("V" had its showrunner replaced; "Fast Forward" has had production shut down.") So the networks are still learning the same lessons they always learn: when these shows are good they're good, but these shows are hard to make work.

So there are a couple reasons these shows get on the air at all:

1) They're based on pre-existing properties, like "V" or "Battlestar Galactica," that lead execs to believe they'll be successful again. They figure either there's a built-in fan base, or the concept has already proven itself attractive to audience... and will again.

Or 2) There's a major showrunner/writer/producer attached, someone trustworthy that the networks believe will be bankable. "Flash Forward," for example, came from Brannon Braga (Star Trek, 24) and David S. Goyer (Blade, Batman Begins, The Dark Knight), both heavy-hitters in the world of sci-fi TV and movies. The original "Lost," in fact, wasn't developed by Damon Lindelof and J.J. Abrams. It was written and developed by Jeffrey Lieber (a relatively unknown screenwriter) as a serialized soap set on an island... but Lieber was eventually fired and replaced by Abrams and Lindelof, who gave the show it's sci-fi bent. What's this tell us?... Networks are always nervous about highly serialized shows, but when J.J. Abrams says, "Trust me-- I can pull off this high-concept serial," they listen more closely.

In short, these serialized shows are ALWAYS huge gambles... so networks only pick them up (and studios only develop them) when there's a powerful element involved-- either a popular pre-existing property or a strong showrunner/producer.