SNL Kagan Study Shows More Cable Networks Turning to Original Programming

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Basic cable networks are putting more first-run shows into production, following the lead of pay network HBO.

More networks have jumped into originals in the past year, like AMC with 'Mad Men,' allowing for increased viewers and ultimately increased revenues from advertising and secondary windows.

A new study from SNL Kagan reveals that while broadcast TV networks still spend far more on original programming, both basic and pay cable networks are generating more attention in this area. Cable has taken a different approach to the traditional 22 episodes per season, ordering just 13 episodes each year, while benefiting from lower production budgets and license fees compared to broadcast networks.

This latest SNL Kagan report also explores how the model for a network show has changed significantly in the past 10 years thanks to new revenue streams, while international market sales have slowed for all but the biggest hit shows.

"Original programming allows networks to really differentiate their brands," says Deana Myers, SNL Kagan senior analyst. "More networks have jumped into originals in the past year, like AMC with 'Mad Men,' allowing for increased viewers and ultimately increased revenues from advertising and secondary windows."

HBO changed the landscape for cable networks forever with the debut of "Sex and the City" in 1998 and "The Sopranos" in 1999, establishing the long-term viability of original series. More recently, the original movie "High School Musical" helped Disney create a franchise with a sequel (the highest-rated basic cable network program in history), CD sales, DVD sales and other merchandising revenues.

SNL Kagan's Original Programming study contains data on select budgets for special features and TV series, as well as original programming expenses for broadcast, basic cable and premium networks. Also included is the probability of sitcom and drama renewals for broadcast networks and originals as a percentage of total programming budgets for pay networks.

Networks depend on this data to benchmark themselves against competitors, while new players use this report to understand the business metrics of originals. Production companies and distributors, along with equity analysts and investment bankers, can see what the networks are spending in this area.

SNL Kagan's Original Programming study is available exclusively as part of the SNL Kagan Information Service. For more information on the report and other media & communications data sets within the SNL Kagan Information Service, call 866-296-3743 or e-mail SNLKaganSales@snl.com.

About SNL Kagan
SNL Kagan is the ultimate resource for complete financial intelligence on the broad and dynamic media & communications sector, including the broadcasting, cable, entertainment, motion picture, telecom, wireless, satellite, publishing and new media industries. The SNL Kagan suite of products integrates breaking news, comprehensive data and expert analysis into an electronic database available online and updated around the clock. SNL Kagan combines the 38-year heritage of Kagan Research with parent company SNL Financial's 20 years of experience in providing essential guidance to Wall Street and to America's top corporations. For more information, visit http://www.SNL.com or http://www.Kagan.com.

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