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Deal or no deal: Ten's studio contracts are a red herring in the blame game

Michael Idato

Sifting through the headlines of the last two days, a familiar narrative starts to write itself: one which finds the third-ranked Ten Network on its inevitable financial deathbed, its bystander billionaire investors weeping innocently by its side.

"Alas, our frailty is the cause, not we, for such as we are made of, such we be," said Shakespeare's Viola, who would surely have been a Ten personality were she not silly enough to settle for being a sideline player in a Shakespearean masterpiece.

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Advice at #FixNetworkTen

Joking that the power had gone off at Network Ten, Pete Helliar comments on the financial woes of the company, while fix-up advice comes from Twitter.

Above the bed, we are told, stand two US studios - Fox and CBS - holding programming output deals that amount to dual Swords of Damocles, harbingers of certain doom to the weakened, defeated Ten.

It's a magnificent piece of financial theatre, but in real terms it's about as sound as some of the programming gems to pop out of Ten's management meetings in the last decade.

Remember Wake Up? Everybody Dance Now? I Will Survive? There's a headline to be wrung out of every one of them.

Output deals are, essentially, the rented furniture of a television network's display home. They adorn the many rooms, they impress the visitors and, as needed, they provide the couch used in the metamorphosis of viewers into couch potatoes.

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But the rented furniture is no more responsible for the management of a home owner's mortgage than the contents of the refrigerator, the books on the shelf in the library or the tools in the garden shed. (No disrespect to The Living Room.)

It is admittedly tricky when the balance sheet shows the value of the furniture exceeds the value of the property which encases them - as is the case here - but inscribing Ten's epitaph with anyone else's name is a little premature.

And more than slightly off the mark.

Output deals are a mainstay of the global television business.

In Australia they became a key chip on the roulette table of American studio output in the 1990s and 2000s largely because our market is small, highly competitive and, for the longest time, was simultaneously rich in cash and lacking in innovation.

By securing the bulk of US output to such deals - at its giddy height Warner Bros (and Sony and Lionsgate) went to to Nine, Disney (and NBC Universal) to Seven, and Fox, and later CBS, to Ten - our television executives were mostly spared the onerous task of actually spotting emerging hits.

Instead programmers acquired content like children at The Royal Easter Show: each was doled out a series of showbags and, upon returning to Sydney from the annual May Screenings, would spread the spoils out on the living room floor, hoping that among the Phantom comics and sample-sized chocolates there was a hit TV show.

In essence, these deals lock up a studio's library for the slate of a single broadcaster and, for the most part, they deliver strong ammunition.

Nine's deal with Warner Bros may have come with a half-billion dollar price tag but it delivered Nine ownership of long-running blue chip hits like Friends, ER, Two and a Half Men and The Big Bang Theory. Ditto Seven with Home Improvement, Desperate Housewives, Lost and much more.

Ten's arrangements with Fox and CBS have, across two decades, delivered an embarrassment of riches, from The Simpsons, The X Files, Glee and Modern Family to NCIS, Medium, Madam Secretary and The Good Wife.

But here's the rub: they were not just multi-million dollar paydays for US studios, they were also vessels through which Australian networks have raked in millions of dollars in revenue. (While, it might be noted, they went cap in hand to the government complaining of excessive licence fees.)

They also kept Ten's program schedule alive during periods where local program commissioning - outside of Ten's strong drama slate - was a patchwork of misfires and stunning flops.

So what has changed?

Significantly, there has been a paradigm shift in the last decade as US studios have integrated vertically with their own broadcasters, launched their own international channels businesses and became stakeholders in other platforms, such as Hulu and Seeso, which compete with their own sales clients; some, such as HBO, now also sell content directly to consumers.

Compounding that is the arrival of a new digital landscape which landed in Australia with the force of a dinosaur-obliterating asteroid, bringing with it new channels, platforms and content sources which seem to be reproducing like rabbits.

But Ten isn't alone in shouldering the blame for that: Australia's television business has historically been light on innovation and has frequently used government regulation to hold back the tide of change; the net effect is that as artificial barriers dissolve what they let through more resembles a tsunami than an ordinary wave.

The chorus of commercial broadcasters complaint about the ABC's prominence in the streaming space, for example, is a hoary old script, but in truth the ABC's iView platform was born in the vacuum created when the commercial sector tried - successfully, for a time - to hold back the clock hands of evolution.

What is more, when you sift through the clippings, the last decade of Ten's mismanagement unfurls itself like a B-grade horror movie: a succession of CEOs, a disruptive and poorly aimed reframing of Ten's brand by billionaire investors, and some astonishing programming misfires which are well documented in the media.

Ten is now at flashpoint, but it has been there before. The last time the way forward was to find and foster a segment of the audience which is now lost by television to newer platforms such as YouTube and Netflix.

But it also survived because of the sheer tenacity of its workforce; not the billionaires whose distorted vision has bruised it so badly, but the rank and file whose passion and intimate understanding of the Ten brand has been proven time and time again.

Originally published on smh.com.au as 'Deal or no deal: Ten's studio contracts are a red herring in the blame game'.