A Preferred Producer: Hoff Productions between Basement and Buyout (Part 2/2)

In this week’s DocumentaryTelevision.com – we continue our detailed profile of Hoff Productions’ path from freelancer to a leading supplier to U.S. factual channels, including Discovery and NGC.

The story so far: Michael Hoff begins from a base in a spare room. He develops a respectable client list for Hoff Productions. But catastrophe always lurks around the corner.

In this post: Hoff builds scale off the company’s ‘WOW! TV’ strategy. What’s next?

• Part 1 is available here
• And here is the Hoff Productions website
• Below we listed the company’s credits through 2009

(Budgets / $’000)

Phase 4: WOW! TV

• In 2003, we expanded from 6,000 SF to 13,500 SF +/-
  • “For the first time I had an office where I could close the door.”
• Bread & butter product:
  • Male-targeted and sensational
  • ‘WOW! TV’
• Hoff’s output grew to 60 hours: 60-70 people
  • Peaked at 100-person staff
• “Our breakeven is 30 hours, or a turnover of $10+/- million:
  • “Specials are loss leaders.”
  • “Single docs aren’t economical.”
  • “But even at this level, every year or so we faced the prospect of a wipeout.”
• Budgets: “From $200 for hour-long series for the diginets to $400+/- for Specials.”

 More Risk: The Co-pro Trap

• “2005 was another set-back year. It was a moment where we could have packed it up.” 
• “We had done mainly co-productions, deficit-financing them so that we would profit from international, DVD and other rights that we retained.”
• “But we realized losses with almost all of our productions. We had to scale back and let people go.”
• “We shifted our strategy from co-pros to work-for-hire commissions, and we got back on our feet.”

 Changing Corporate Practice

• “I personally delegated more of the production oversight and hit the road with our head of development, calling on clients every 3 weeks or so.”
  • “Maybe it’s obvious, but we found that the commissioning execs respond more often with a ‘yes’ the more often we saw them.”
• Agent?
  • “We did work with an agent for a year or so, and he was often helpful.”
  • “But we decided that were we were better off spending the agent’s fees on internal Development.”

 Phase 5: New York! New York!

• “We opened a New York office to be closer to our clients.”
  • “We also wanted to draw on a new talent pool and on different knowledge sets.”
  • “We wanted to be less insular.”
• “Our Development team expanded to five, including two very established executives.”
•  “We are focusing on character- and personality-driven programming. That’s what the networks want and we are delivering.”
• “Our goal is to grow and maintain our traditional base of male appeal ‘WOW! TV’, while expanding into more character-driven programming for men and women, plus compelling formats.”
•  “We are also gaining expertise in 3D production.”

 Programming Trend: From ‘Immersive’ to ‘Personalities-plus-Tape’

The last decade saw a big shift in network programming:

• “In the early 2000’s, we worked on a mix of specials, limited series, and long-running series that weren’t character-driven. Some of them had presenters, but almost everything was narration driven.”
• “About four years ago, every network said that they were looking for ‘immersive’ programs. ‘Immersive’ was suddenly the buzzword on every programmer’s lips. Maybe Crocodile Hunter was their model, I’m not sure.”
• “By early 2009, almost 100% ‘big characters’ and ‘big personalities’.
  • “We used to write pitches that were based on possible people and concepts.”
  • “Now the pitches were based on really strong characters, and on tape that proved it.”
• “Meanwhile, the competition between the channels has become more and more frenzied, and the programmer’s patience to let a show find its audience has diminished.”

 Business Trend: ‘Deals are More Sophisticated Costly’

• “Deals are more sophisticated. People across the production process know so much more about rights and deliverables.”
• “There are more talent-driven deals, and Talent adds a whole new layer to the negotiation.”
• According to Michael Hoff: “Deals have become much more expensive:”
  • “We used to write a single paragraph pitch and not even bother to sign up the talent.”
  • “Now we can spend $25-30 in time, outside counsel and other resources to develop a concept, sign talent, and create the sizzle reel.”

 Hail Mary: ‘6 Mega-series and a few Specials’

We asked Michael Hoff what would change his life:

• “Companies need to grow in order to survive.  It is almost impossible to be a ‘healthy’ company and stay the same size.  Bank loans, pay raises and promotions, increased overheads and health costs, and so on: they all require growth.”  
• “Also, the company needs to grow in order for my job to continue to be personally interesting and to evolve.  My job description changes as the company grows.”
• “For any kind of financial pay-out that would allow me to walk away, the company probably needs to hit about $20 million a year.  This is secondhand info, but we’ve never had any buyer interest at any previous size. I’ve heard that $20 million is the threshold for becoming an interesting acquisition or merger.”
• “That would be the equivalent of six long-running mega-series, plus some Specials and pilots.”
• “So in order for me to maintain an interesting job and secure a reasonable exit within the next ten years, I need the company to grow and evolve to that scale.”
• “Or perhaps, in the short run we can become dramatically more profitable by improving our margins, which is forever a challenge.  Let’s face it, it’s a tough business.  It’s not for the faint of heart.”

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Hoff Productions Credit List

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