Wednesday, July 18, 2018
TV and Media

America has never had so much TV, and even Hollywood is overwhelmed

Rich "RJ" Rappaport barely remembers the days when he wasn't busy renting out truckloads of sham guns and fake cocaine.

His vast prop warehouse on the outskirts of Atlanta used to see a trickle of local filmmakers, maybe a dozen a month. Now, he sees more than that every day, many of them rushing to equip the massively complicated, big-budget shoots of television's new golden age.

His shop, RJR Props, now makes more than five times the money it did a few years ago, handling demands from not just traditional broadcast networks, but a corps of cable and web titans — a jet interior for Amazon Video; a fantasy arsenal for IFC; and, for Netflix, a 100-foot-tall stack of counterfeit cash.

The spending spree has also jolted the entertainment industry, setting off a scramble among the casts and crews racing to film the next big hit.

"It's become intensely, fiercely, cutthroat competitive. Just to keep our place, I put in 90 hours a week," Rappaport said. "It's a business that chews people up and spits them out. I've never seen anyone work so hard in my life."

The TV business is facing its biggest explosion of new productions in the medium's history, sparking a billion-dollar arms race between established TV networks and a deep-pocketed insurgency of online streaming giants.

That boom is reshaping the industry from Atlanta to Hollywood, where even washed-up actors are suddenly in high demand and open studio space is the holy grail, said Henrik Bastin, the executive producer of Bosch, a gritty cop drama on Amazon, based on Tampa author Michael Connelly's Harry Bosch books.

Craftspeople, who once went months without a gig, are now fought over and recruited for shows that have become so ambitious, expensive and intricate they're "like making a movie each week," Bastin said.

"There's literally no studio space in the L.A. area right now. Cameras and equipment are flying off the shelves," Bastin said. Studios, he added, are locking in every cast and crew member they can with a clear message: "Don't go anywhere."

Desperate for buzz and worried over their survival, those networks are spending heavily in hopes of launching a prestige franchise — a Game of Thrones or Breaking Bad — that can captivate distracted audiences and pierce America's increasingly saturated marketplace for must-binge TV.

But the wild spending is stoking fears about whether or when TV's financial bubble might burst. The glut of scripted dramas and comedies has dramatically boosted budgets, but it has not solved the industry's most dire dilemma: The lack of a functioning business model for a new era of TV.

"The overall television ecosystem can't sustain this," said Eric Schrier, president of original programming for FX Networks, home of Emmy winners such as The Americans and The People v. O.J. Simpson: American Crime Story.

"There are networks (investing) in original programming and scripted TV that are trying to justify their existence by being in that business," Schrier added. "And as the consumer can't consume all this content, the strong will survive and the weak will not be able to exist."

• • •

The old duels of the television business were simple: Big broadcasters and smaller cable channels tussling over a single box, the living-room TV set.

Now, the business is packed with new competitors, including online streaming's expanding empires, and looking shakier than ever. Millions of "cord-cutting" American households are trimming their cable-TV bills or shifting their viewing to computer, cell-phone and tablet screens altogether.


Alfre Woodard on the set of Marvel's "Luke Cage," filmed in New York.

The number of original scripted TV shows has roughly doubled since 2010, to more than 430 series this year, industry research from FX Networks show. Over the same period, the cost of filming and promoting the typical episode has climbed 20 percent, to more than $4 million an hour, as competition for actors, studio space and audience has intensified.

Broadcast and basic-cable networks drove the new-show surge, but web outlets' rapid-fire debut of high-profile franchises egged them on. In 2010, online streamers aired four original series. In the first half of this year, they aired 49.

Streaming's biggest behemoths, Netflix and Amazon, have more than doubled their yearly spending on original programming since 2013, to $7.5 billion last year, more money than the film industries of entire countries, including Australia and South Korea, data from investment researcher IHS Markit show.

Those companies are spending "shock-and-awe levels of money," as one cable executive said, in hopes viewers will abandon old-school TV and embrace their web-first universe. Netflix says it will produce 1,000 hours of original programming next year, up from 600 hours this year.

Half of America's TV households now have access to a streaming service, Nielsen data show, and new distractions arise all the time. Tech powerhouse Apple, the most valuable company in the world, began work this summer on its first original series, a celebrity-filled reality show called Planet of the Apps.

The money has touched off a feeding frenzy for TV studios such as Lionsgate, where executives refer to themselves as "content mercenaries," pursuing projects for broadcasters, cablers, streamers, video sites and anyone else willing to pay up.

The studio, which produced series such as AMC's Mad Men and Netflix's Orange is the New Black, is now working on nearly 80 shows for 40 different networks, including a science-fiction series for Hulu, a drama for the Oprah Winfrey cable network OWN, and a Ben-Affleck-produced reality show for Verizon's video-streaming app, go90.

Kevin Beggs, chairman of Lionsgate's television group, said he has seen a flurry of networks and streamers eager to buy their own attention-grabbing TV franchise. But the overwhelming pace and competition has also made it tougher for any one show to stand out.

"So many networks need their defining show, and we've made a business of doing that," Beggs said. But "you've got to work a lot harder to get everyone's attention ... You never know which one is going to be the one."

• • •

Much of that cash has flowed to the armies of decorators, drivers, caterers, painters and other workers who are irreplaceable behind the scenes. Edmond Brown, the business agent for a chapter of the International Alliance of Theatrical Stage Employees, a union of nearly 6,000 craftspeople around L.A., said some members were on pace for "the best year they've ever had in the industry. ... We can barely keep up."

Amazon Studios

Actor Titus Welliver, right, films an episode of the Amazon series "Bosch" in Los Angeles.

A new generation of TV talent is grateful for the chaos. After Tom Bernardo, a former lawyer, quit his job and moved to Los Angeles in 2014, he found work fetching coffee and researching scripts as a Bosch writers' assistant making $600 a week.

Within months, he was promoted to staff writer and, now, co-producer for the new 10-episode season, with an agent negotiating his per-episode pay rate and more money that he doesn't "have the time to do anything with."

"It's a gold rush," Bernardo said. "I don't think I would have had that opportunity without this many outlets doing work."

The boom has further energized film hubs such as Atlanta's "Y'allywood," where generous local tax incentives have become financial catnip to studios. In New York City over the last five years, TV-production spending has doubled, to more than $4 billion, and the number of primetime shows being filmed has nearly tripled, city records show.

"Five to 10 years ago, we were dealing with a small number of networks doing TV," said Julie Menin, the city's commissioner of the mayor's office for media and entertainment. "Now, we've got over 20 (networks), and people are consuming the content in a completely different way."

In film hubs such as Vancouver, taping new episodes has become an exercise in constant improvisation. Squeezed by sold-out studios and overbooked crews, some teams have filmed in old supermarket warehouses or gone scouting for temporary workers hundreds of miles away.

TV's soaring spending and cachet have drawn in a new wave of stars and directors from the rarefied air of feature films, further boosting the ranks for a medium once derided as less prestigious than Hollywood.

But that star power has only added to the growing costs and complications of getting a series on air. "When we're working on a film, we're creating a family," said Laray Mayfield, the casting director for The Social Network and Netflix's Luke Cage. "When we're working on a television show, we're creating a city."

• • •

Even TV's top players think the industry can't stay so hot forever. FX president John Landgraf has for months forecast an imminent downturn of what he calls "peak TV," predicting production will crumple in the coming years due to an oversupply of unprofitable, little-watched TV.

The networks are gambling big in a risky industry where only the most prominent shows survive. While top-rated hits can garner millions of viewers, FX research found that the bottom 20 percent of shows averaged around 380,000 viewers, a daunting prospect for networks who depend on big audiences for ad revenue.

But networks have worried that even moderating their budgets could leave them vulnerable to their free-spending rivals. Michael Nathanson, a senior analyst at MoffettNathanson Research, said of Netflix, "It's tough for the media industry to compete against a company that burns $1 billion a year."

Industry watchers now worry TV could be ripe for a day of reckoning. To win back cord cutters, cable providers are increasingly offering "skinny bundles," with lower prices and fewer channels — effectively, a death sentence for the networks left behind.

Some in the business say they're too busy to worry about an upcoming TV depression, including Suri Bieler, who owns Eclectic Encore Props in New York. On one recent afternoon, she had just finished fulfilling prop orders for a dozen shows, including Persian rugs and a refrigerator for Orange is the New Black.

"With a business like this, there's nothing that's usual," Bieler said. "Every day we can rent another rug, that's what we do."


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