FX's President John Landgraf at TCA: "The Biggest Challenge We Face is Lost Ad Sales Revenue."

Pasadena CA amp8211 Perhaps more than any other senior network executive who appears at Television Critics Association tours FX Networks and FX Productions CEO John Landgraf always steps right up and tells it like it is And he39s always here starting off his networks39 days with press conferences in which he speaks with a candor that is simply not common among his peers This is just one of many reasons why TCA members look forward to FX Networks39 days at their twiceyearly gatherings You read that right FX Networks has an entire day at each TCA tour one which it never fails to fill with a compelling blend of panels for new and returning series on FX and FXXLandgraf also consistently finds interesting new ways to discuss subjects that have been discussed before For example he began his session yesterday by talking about the everexpanding competition all television networks face from each other and from streaming services and other entities But the many other choices viewers have don39t comprise his greatest concernquotIncreased competition is not our biggest challengequot Landgraf asserted quotCompetition certainly raises the bar but if we make a great show people are still likely to find it and watch itquotThe biggest challenge we face is lost ad sales revenuequotThis was quite an admission to the many critics and reporters in the room who rarely hear the truth about the damage that DVRs are doing to the television businessquotSixty million US homes now have DVRs so as well as our shows are doing in Live7 we and other channels are losing as much as 40 percent of ad sales revenue on some of our most valuable seriesquot Landgraf revealed quotFor example 39Sons of Anarchy39s39 primary airing on Tuesdays at 10 pm averages over five million adults 1849 in Live7 but only two million of those viewers watch the show live and only three million actually watch the commercials That39s a lot of lost revenue for a show that39s very expensive to makequotLandgraf was quick to characterize the situation as a challenge rather than a defeat quotWe need to find new opportunities to mitigate those losses and we39re doing thatquot he continued He went on to talk about FX Networks39 new TV Everywhere service FXNOW which was announced yesterday at TCA and is available to authenticated multichannel video programming distributor customers in approximately 50 percent of homes in this countryFXNOW Landgraf noted will allow FX Networks quotto begin rebuilding our advertising businessquot In addition to FX39s original series it will offer over 200 theatrical films that are not available on any other streaming video service and every episode of Fox39s longrunning hit quotThe SimpsonsquotPerhaps one reason Landgraf isn39t so worried about competition is that so many of his shows quotseem to keep hitting alltime highs every yearquot He mused that quotat some point it would seem that the pie we eat keeps getting sliced so thin that the slices should be too thin This is something we think about a lot when we39re developing shows When I started in this business 10 years ago we were in ad supported television It still felt like more or less a disposable medium in other words the primary reason we were making the show was for the audience that would watch it the night it aired Now I think we39re making shows for posterityquotIt39s not unlike a movie in that yes it does matter what the first weekend39s domestic US box office for film isquot he continued quotBut if a film is really good it has a chance of having a long creative and financial life People can still be discovering it enjoying it and you can still be earning money based on it five 10 15 years after you make it That39s the thing that39s most exciting to me about television It seems like a medium that has a long life Therefore it39s worth making things that not only galvanize an audience the night they air but might be useful to someone 15 or 20 years later And of course we own most of our programming so we39re benefiting from both those revenue streamsquotThe idea of making content for posterity and having to wait years to realize the full profit of that work is a new one and not without its concerns That39s why new technology like FXNOW is so important quotWe39re going to work hard to complement our linear channels with not only nonlinear services but an advertising model built around those nonlinear servicesquot Landgraf said quotWhen I look at the larger financial picture of a large business like the FX Networks advertising is very important Affiliate sales meaning the subscription rates that come to us are very important But increasingly ownership of content is a really important part of it tooquotThere have been a quotnumber of timesquot when FX faced challenges on the ad sales front and quotownership of content has bailed us outquot Landgraf said quotIt39s a nice thing actually to have some sort of more certain long tail revenue that undergirds a more volatile thing like advertising sales When I look at the picture of all those various components it makes me feel very bullish about the business even though the advertising business is stressed right now because of DVRrelated lossesquotCheck us out on Facebook at MediaBizBloggerscomFollow our Twitter updates MediaBizBloggerThe opinions and points of view expressed in this commentary are exclusively the views of the author and do not necessarily represent the views of MediaBizBloggerscom management or associated bloggers MediaBizBloggers is an open thought leadership platform and readers may share their comments and opinions in response to all commentaries

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FX's President John Landgraf at TCA: "The Biggest Challenge We Face is Lost Ad Sales Revenue."

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