What Does A&E Pay for Programs?

The ‘Sweet Spot’ for A&E

In our previous posts, we examined Discovery’s ‘Sweet Spot’ for commissions. (See Archive: February 17 and February 24, 2010).

This week we look at A&E, the flagship and parent of the AETN family of channels that includes History, Bio, History International, the digi-nets Crime & Investigation (CI) and Military History, and since 2009, Lifetime.

A&E is distributed to more than 100 million U.S. homes. It is ranked #5 amongst all U.S. cable networks for adult viewing and #4 for adult women.

A&E is the home of many leading non-fiction series, including three Top 20 adult-targeted shows Hoarders, Steven Seagal: Lawman and Intervention. However, A&E is not a dedicated Factual channel: more than half its prime time schedule is dedicated to scripted series, including reruns of The Sopranos and CSI.

A&E’s Factual pipeline (less than 300 new programs a year) is therefore significantly narrower than non-fiction specialists like Discovery Channel (900+) and TLC (800+/-).

A&E describes its principal competitors as USA, TNT, TBS and FX.  Individual A&E factual programs compete with offerings from Discovery, Bravo, Lifetime, TLC, Food, SYFY, Spike and several other networks.

A&E’s digital offspring is CI network, which reruns A&E’s Crime inventory. CI is currently distributed to fewer than 15 million U.S. homes.

Recap: What is the ‘Sweet Spot’?

Every network is steered by an annual programming budget that establishes or implies a “Sweet Spot” for an hour of original programming.
 
This benchmark is based on investment strategies, revenues, the competitive situation, contributions from co-producers and partners, and more.
 
The ‘Sweet Spot’ is the cost that the Director/VP of Development / Programming is comfortable presenting to the final decision-maker, expecting buy-in for an approved idea that meets the channel’s on screen standards.
 
Channels will pay more (‘High’) for premium, promotable programs, for example to anchor the Sunday night schedule, or to remedy a weak rating during weekday primetime. Cost items that push programs into the ‘High’ category include: talent, CGI, extended dramatic reenactments, and payments for access to people, places and archives.

An otherwise standard series could vault into the ‘High’ cost category due to a single line item. For example, The Jacksons: A Family Dynasty proved to be both a costly investment and timely opportunity when A&E secured the rights to classic Jacksons music and stock footage.
 
The ‘Low’ commission cost could be the bargain rate sought by program executives while maintaining their on-screen values.  Or the ‘Low’ cost could be achieved by favorable production conditions – for example, for a format that requires a small local crew versus a large crew that works in harsh and remote locations.

We know of cases where the ‘Low’ benchmark represents a loss leader for a new producer who deficit-funded a production to establish a track record with a channel.
 
High-cost ‘Signature’, ‘Event’ or ‘Showcase’ programs anchor a channel’s major promotions. These are programming events that may occur occasionally or seasonally. Think of the upcoming 12-part History franchise series America The Story of US.

And now for the numbers:

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Coming Soon!
DocumentaryTelevision.com ‘Sweet Spot’ Report

What Do Channels Pay for Programs?
Our Research Findings for Purchase Soon

Our original research findings about the ‘Sweet Spots’ for 25+/- U.S. channels covers:

• Network budget benchmarks for original commissions
• Several levels: Signature, High, ‘Sweet Spot’ and Low
• We cover ‘the biggies’ and diginets

If the data is available, we include:

• Acquisition costs
• Copro contributions
• Benchmark costs for typical genres

The unique and valuable ‘Sweet Spot’ Report covers Discovery Networks, OWN Oprah Winfrey Network, AETN Networks including History, truTV, MTV, Nat Geo and many more.

How to Purchase the ‘Sweet Spot’ Data
Our 2010 archive, INCLUDING NEW RESEARCH FINDINGS, will soon be available for electronic purchase from DocumentaryTelevision.com.  We’re finalizing the purchase details now.

If you need ‘Sweet Spot’ data urgently, please email Peter Hamilton.

Note: This data is taken from recent confidential interviews with producers, network executives, distributors and experts, as well as from published sources. Actual budgets vary from project to project.

What the Sources Say about AETN…

• For decades, AETN has relied on a work-for-hire model for non-fiction commissions, rather than acquisitions or co-productions.
• AETN differs from many channel operators, notably Discovery Networks, in its approach to production supervision. Discovery employs a production management department to closely manage budgets.
• The AETN model is a legacy of its early practice which was to rely on huge output deals with the BBC, Towers Productions and other suppliers. Individual production budgets were not closely supervised.
• Although its sources and channels have since diversified, the AETN legacy of output deals still frames the company’s practices. AETN teams establish, in advance, a rock solid ‘Sweet Spot’ for a series that is affordable for the channel and that properly rewards the producer. AETN commissioners tell their producers to ‘make it work for that cost!’ AETN doesn’t audit productions and collect underages – but watch out, producers, if you incur overages!
• The digi-nets Crime & Investigation (CI) and Military History are rerun channels that do not commission original programs.
• AETN maintained a capable internal production team to create specials and reversion programs for the digital channels and websites.  However, the unit was closed in 2009 and the work farmed out to less costly 3^rd party producers.

… And Specifically about A&E’s Sweet Spot

• A&E’s ‘High’ production cost estimate ($500+) is for an established and successful prime time Reality series.
• Success brings opportunities to expand budgets and improve the on air deliverable. For example, when a Reality show is firmly established, A&E is more likely to approve longer shoots to capture more challenging sequences, step up its payments to key talent, extend time in post-production, or invest in clearing a popular music cue.
• And television programming is a vicious, competitive cycle. Success quickly brings on imitators, driving up original budgets to protect the loyalty of the established audience and keep one step ahead of the competition.
• A&E’s ‘Sweet Spot’ ($325) is for a rock-solid Reality series like Intervention that delivers week after week.  
• The ‘Low’ benchmark ($225) is the ballpark cost for a Makeover format, like Hoarders, A&E’s hit new (2009) series about ‘people whose inability to part with their belongings is so out of control that they are on the verge of a personal crisis.’ Note: we’re not reporting that Hoarders enjoys a $225 budget, but rather that primetime Makeover shows like it are benchmarked around the $225 level.
• A&E does not create occasional ‘Signature’ or ‘Event’ series, unlike The Discovery Channel (Planet Earth, Walking with Dinosaurs) and History (The Universe, America The Story of US).
• AETN will invest in original programs for CI as its distribution increases. AETN sees an opportunity to chase the success earned by Discovery’s Crime-targeted ID network.

Takeaways for Factual Producers

• The bar is extremely high at A&E. The pipeline is narrow because Scripted Entertainment populates about half the schedule. And the non-scripted half is dominated by a handful of series, leaving no opportunities for producers to create single episodes or limited series within established thematic branded strands.
• The upside: the A&E programming team is fully alert, hunting for the needle in the haystack – that fresh, new idea for a series like Intervention and Hoarders that can excel in a fiercely competitive schedule.

More Sweet Spots
Next week: History, Bio, History International and Military History.
Coming soon: Scripps, Nat Geo, Smithsonian, Canadian Channels and much, much more

Thanks!
Many thanks for your clicks, forwards, emails and calls. Traffic is far exceeding our modest expectations. Our readers include senior programming executives at major channels, experienced producers, educators, and many aspiring market participants.

And a special tip of the hat to Melissa Houghton, executive director of WIFV Washington D.C., for helping us reach out to the independent community.