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..Gary Dretzka
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March 18, 2003

Last week, the business section of the Los Angles Times finally caught up with a trend that the Calendar section's prolific video columnist, Susan King, has been reporting on for nearly three years now: the avalanche of TV-to-DVD titles now available to consumers.

I'm not quite sure what the news hook was, except to point out that TV anthologies now represent a "white hot" 10 percent share of the $8.7 billion DVD sell-through business. Still, Meg James' article did a nice job summarizing the known facts.

For all the attention the Times' business section has been paying to the movie business lately, it's still a bit slow to grasp the nuances of less sexy aspects of the industry-at-large.

Monday morning's Golden State column, on the "sluggish diffusion" of TiVo/Replay recorders, provided yet another classic example of the Times' reporting only half the story.

Yes, this revolutionary technology should have attracted more attention from cable companies and consumers, by now (even if Jay Leno and other celebs have started using "TiVo" as a verb). But, perhaps, other agendas are in play.

Columnist Michael Hiltzik failed to question the odd marketing strategy of maintaining a basic price tag of $600 per personal video recorder, by constantly adding additional hours of storage to the hard drives, instead of discounting perfectly good older models. Neither did the column mention the current availability of PVRs from Panasonic and other manufacturers that combine all the pluses of TiVo/Replay with an ability to archive shows on DVD.

Yes, as the column points out, manufacturers are practically giving away DVD players, and that's helping drive sales of pre-recording discs. But the $49 price tag for low-end units is something new.

I don't think enough credit for the phenomenal success of DVDs is being directed toward the creative community.

Digital discs didn't start flying off the shelves until filmmakers embraced the features that added value to the consumers, and, moreover, could be used as tools to enhance their reputations and seduce their fan base. One of the reasons the music industry is in such a doldrums is that, compared to DVDs, CDs are shockingly overpriced for what the labels deliver, and, thus, piracy is considered to be a justifiable act of revenge.

In James' piece, she quotes an executive of Twentieth Television on the question of how the proliferation of these TV-to-DVD packages might hurt the studios' syndication business. His diplomatic response was that he thought complete-season DVD sets - of 24 and The Shield, for example -- actually could enhance a show's value in syndication.

Maybe. But, that remains to be seen.

There probably are a few programming executives from independently owned, non-network-affiliated television stations who don't relish the idea of seeing entire seasons of their re-run menu available on video, complete with special features and minus commercials. In the last week, I've received boxed sets of the complete first season of CSI: Crime Scene Investigation, the third season of Friends and outtakes from The Real World/Las Vegas.

As someone who covered the NATPE convention for 10 years, these packages (and a pile of others on my desk) made me wonder how programmers felt about the TV-to-DVD trend. After all, before some of today's most popular network shows even enter the syndication market and can be shown on local stations, they're being sold in full-season bunches to their most devout fans.

Pilots and individual episodes of hundreds of classic shows -- The Twilight Zone, M*A*S*H and Twin Peaks, to name a few -- have been available on videocassette for many years now, of course. It wasn't until 2000, however, when Fox released the first season of The X-Files in a seven-disc set, that Hollywood studios began weighing the financial benefits of syndication against the enormous potential of DVD.

Without waiting for the jury to return with its verdict, HBO released a season's worth of The Sopranos and Sex and the City, Paramount started tapping into its Star Trek franchise and Fox came back with The Simpsons and Buffy the Vampire Slayer. The off-TV category has gone from zero to $1 billion in a heartbeat.

One executive at a major stations group compared this new trend to a "toothache," and wished it would go away.

Until recently, the syndication business was conducted according to a time-honored formula. If a prime-time show could reach the 100-episode milestone, it stood to make a bundle in the off-network syndication market.

The NATPE convention was where representatives of local stations met with their counterparts in companies that packaged programs for syndication. The highly competitive bargaining sessions were intense and openly combative, and clearance deals were announced with great fanfare.

Companies that owned stations in several markets had less trouble making package deals than independents, but some producers of original programming preferred going with feisty little stations, like Chicago's WPWR-Ch. 50, because they did a better job of marketing niche shows. The competition for hot shows prompted some syndication companies - most notably, King World - to demonstrate their willingness to go the extra mile by throwing grandiose parties and importing A-list artists to entertain.

It usually took four or five years for hot network sitcoms and dramas to start showing up in syndication. The series that failed to go the distance became the answers to trivia questions, instead.

The heyday of wheeling and dealing at NATPE pretty much came to end in the late '90s, or around the same time that CBS bought out the wild and woolly King brothers.

By then, laws prohibiting networks from owning all or part of a series were eliminated, and producing studios were given different marching orders from their partners. Anticipating a relaxation of FCC guidelines, the networks and certain major station groups - including Tribune Broadcasting -- became very aggressive in their pursuit of new properties.

When cable channels joined the fray, by competing with broadcasters for original and fresher off-network fare, the magic number of 100 was dramatically reduced. Even if they failed to reach half that number, repeats of Sports Night and other troubled series found new homes on niche channels.

The improvement in quality of original syndicated adventure, fantasy and sci-fi series (Xena, V.I.P., The Highlander) and an unprecedented willingness to run infomercials in previously sacrosanct timeslots, also cut into the time available for traditional reruns. (Two years ago, networks also began "repurposing" select shows by rerunning them on their cable outlets within days of their debuts.)

Eventually, neither the syndication companies, nor the major station groups, could afford to wait until NATPE to conduct their business. Deals were cut sometimes months prior to the event, and these clearances were used to convince the stragglers of the need to fish or cut bait.

This effectively put an end to the big parties, and most of the reason people attended NATPE.

Just when it appeared as if the major station groups were cutting into the studios' ability to bully them, however, Fox put the entire first season of The X-Files on DVD, and asked Chris Carter to add some commentary, trivia and a video game. It was anything but a no-brainer, though, as cassettes of individual episodes of TV shows rarely made any money.

These "collector's edition" packages weren't cheap - a whole season could go for $150 or more -- but they offered fans commentaries, biographies, games and other features. More importantly, perhaps, they took up far less space on a bookshelf than an equivalent number of cassettes or could displayed like a coffee-table book.

Different studios have taken different approaches to this segment of their overall home-video business. Sony, for instance, has yet to package a show that hasn't already started to run in syndication.

On the other hand, some serial dramas -- including 24 and The Shield -- were being sold in DVD after their freshman year, if only to promote the second season of the series. The same strategy could be used this summer to exploit American Dreams, if the NBC drama is picked up for a second year.

I couldn't find anyone who would agree to comment on the record about any internecine squabbling that might have occurred over the repositioning of a studio's TV assets. Maybe it never happened. The way Hollywood operates these days, the only thing that counts is the number on the bottom line (unless one's Christmas bonus hinges on year-to-year gains in productivity).

Among the most popular DVD titles are The Simpsons: Season One, at 1.6 million units sold; HBO's Band of Brothers, at 1.4 million; The Sopranos and NBC's Friends: Season One, at 1.3 million; and the first year of Sex and the City, at 1.1 million.

Even by Hollywood standards, that's real money.

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