FX Network's Unique Business Strategy
Ben Laing
In recent years the basic cable network FX has become a major
player in the television industry when it comes to producing original content. The network started back in 2002 with the
police drama The Shield, which became
a breakout hit. The network has developed an identity for taking risks and
often pushing the envelope of what can be shown on television with their
original shows. CEO of the network, John Landgraf said, “We tried to build a
business that is based on risk-taking and to have a culture that embraces
artists who want to try audacious things,” (New York Times). FX has developed a
niche in the current saturated television industry. A majority of FX’s original
content caters mostly to young men whom marketers are now paying a premium to
reach. In 2012, “marketers spent $506 million to advertise on FX, compared with
$367 million in 2008” (New York Times).
FX has set themselves apart from other cable networks and
even premium networks. In December of this past year, 146 critics’ released
their best-of lists, “in which HBO and FX tied for the highest percentage of
inclusions, with 15 percent a piece” (The Hollywood Reporter). Netflix followed with 13 percent. The major
key to the network’s success when it comes to original series consists of
luring creative, talented people with the promise of artistic freedom as
opposed to a financial bonus. FX has become a home for creators where ratings isn’t
the primary concern. A prime example of this is the half-hour comedy Louis. Creator, Louis C.K. was getting
offers from other networks to develop a sitcom for upwards of seven figures. Instead,
he took FX’s offer of $200,000 to have total control over his show. During the
production process of the pilot episode FX executives had zero notes for the
comedian. The network conducted a focus group to test the show, which is a
common practice in the television industry. Louis C.K. remembers after the test
was over Landgraf told him, “Here’s the strongest data we’ve got, and as the
network president, I’m urging you to ignore it” (New York Times).
One of the most intriguing aspects of FX is how they produce highly
successful anthology programs. This has directly gone against the traditional
television industry business model. Historically if a network produces a
successful show, which more difficult than ever currently, they ride that money
train for as long as possible. FX does have shows that have stood the test of
time, like It’s Always Sunny in
Philadelphia, which recently premiered the show’s eleventh season, and the
majorly successful Sons of Anarchy, which
lasted seven seasons. More recently however, FX has strayed from this
traditional path. The network has developed a niche for producing anthology
series. These shows either intentionally air for one season, or they completely
change the story from season to season. FX stepped into the new method of television
storytelling with the very successful American
Horror Story. The show has been renewed for its sixth season. One of the
coolest aspects of the show is that there is a completely new storyline each
season, while using the same actors from season to season. The network took the
classic story of Fargo to the little
screen as well in 2014. In this case new actors in each season similar to that
of HBO’s True Detective. This month,
FX premiered one of the most talked about shows of the year with the
star-studded American Crime Story: The
People V OJ Simpson. The second season is currently in development and will
reportedly focus on Hurricane Katrina.
Golden Era of TV?
FX Networks CEO John Landgraf believes that we are currently
in the ‘peak TV’ era. Landgraf sparked a bit of controversy this past year at
the Television Critics Press Tour. He looks at the television industry through
an economic perspective, and believes that the recent explosion of television production
could be a bubble. "My sense is that 2015 or 2016 will represent peak TV
in America," he said, "and that we'll begin to see declines coming the
year after that and beyond” (Broadcasting & Cable). There is currently a
record number of scripted series right now. “According to the crack research
team at FX Networks, a whopping 409 scripted comedies and dramas aired on
cable, broadcast, and streaming outlets in 2015” (Vulture). FX conducted the
research in the middle of December. There were actually three more shows
premiering after the count to close the year out. In 2015 there literally wasn’t
enough hours to watch all of the television produced. With networks continuing to pump out original series year after year no downfall can be seen on the horizon. One thing is certain however, FX Network will continue with their out of the box decision making.
Ben Laing
MSS 495
Burns
Works Cited
Adalian,
Josef. "There Were Over 400 Scripted TV Shows on the Air in 2015." Vulture.
N.p., 16 Dec. 2015. Web. 13 Feb. 2016.
Chozick, Amy, and Bill Carter.
"A Rough and Bawdy Ad Magnet." The New York Times. The New York
Times, 26 Mar. 2012. Web. 13 Feb. 2016.
"FX Chief on 'Louie's' Future,
Netflix's Ratings and Streamers' Lack of Profits." The Hollywood
Reporter. N.p., n.d. Web. 13 Feb. 2016.
James, Meg. "2015: Year of 'peak
TV' Hits Record with 409 Original Series." Los Angeles Times. Los
Angeles Times, n.d. Web. 13 Feb. 2016.
Malone, Michelle. "Golden Age of
TV Fights to Stay Golden." Broadcasting & Cable146.1
(2016): 17. ProQuest. Web. 13 Feb. 2016.
Chris La Bella
ReplyDeleteAfter reading Ben’s post I decided to look into the cable ratings from 2015. I noticed that FX was ranked 11th, behind AMC, when it comes to primetime viewers (Patten). Aside from the network’s 13% drop in viewers from 2014, and the fact that FX is not within the top 10 networks this year, I believe it is very fair to say that FX is an underrated network considering its amount of high quality shows produced.
If one takes a minute to consider the popular original content produced on FX, he or she may think of programs like Always Sunny in Philadelphia (now on FXX), American Horror Story, Louie, and Sons of Anarchy (just to name a few). Not only do these shows cover a solid amount of ground amongst diverse genres and themes, but they also captivated their respective audiences to a large extent. With this said, it seems as though streaming services like Netflix and Amazon Video garner the most attention relating to creative and original content given the success of shows like House of Cards and Transparent. We commonly hear about how streaming services are the future as they continually dish out largely popular shows with unique plots and diverse casts. But, at the same time, I believe that many ignore the fact that existing networks like FX are undeservingly overshadowed in the process. Much like what Ben stated in his post, FX is notorious for taking risks and producing shows that are quite different from “the norm.” In my opinion, FX is the “streaming service” of cable television when it comes to originality and inimitability within shows. Consider the shows above, and ones like Fargo and Archer (on FXX now) and tell me you don’t receive that revolutionary vibe you feel when you come across a new show on Netflix. While the massive amount of attention given to streaming sites is warranted, I believe the content on FX stands out among the plethora of average shows on basic (and cable) television. In Adam Levine-Weinberg’s article, “5 Things Netflix, Inc. Management Wants You to Know,” he states: “Original content is just one driver of growth” (Levine). FX definitely has the originality to take off even further.
As Ben said, I think the ability of FX to create anthology programs is what makes the network’s content successful, entertaining, and promising moving forward. The ability to start watching a popular program at any given season without vitally needing knowledge from a previous season is something special. For example, I only heard great things about American Horror Story, yet it took me until the latest season to finally watch live. I didn’t feel hesitant to watch at any point because I knew that the season was essentially a fresh start. This allows for new viewers to join ship at any time, while also catering to individuals who have been loyal to the show from the start. All in all, I couldn’t agree more with Ben regarding FX. I think it is an excellent network, with excellent content that can easily rival any other network or streaming site.
Works Cited
Levine-Weinburg, Adam. "5 Things Netflix, Inc. Management Wants You to Know -- The Motley Fool." The Motley Fool. The Motley Fool, 27 Jan. 2015. Web. 14 Feb. 2016. .
Patten, Dominic. "Cable Ratings 2015: Fox News Rides GOP Debates Almost To Top, Discovery & AMC Rise, A&E and MTV Down." Deadline. Penske Business Media, LLC, 22 Dec. 2015. Web. 14 Feb. 2016. .
I agree with what you are saying with TV today. Networks that take risks and let creators have control over what they want to make can very well lead to big rewards for the company. Your post makes me realize that FX is very much like my favorite network Adult Swim. They both take risks, give complete creative control and have the same young in demand demographic. The main difference though is that Adult Swim is mostly animated content.
ReplyDeleteWith over 400 scripted TV shows last year, only five to ten percent of those were animated shows for adults. (Adalian) This is just an estimate as I could not find how many new animated shows came out for adults last year. in a sea of so many shows, being an animation-centric channel for adults is the best way to catch my attention. Adult Swim has put out so much great animation that no other network can even compete with them. Adult Swim does not only have one but two niches that catch my attention. it has adult cartoons which I love and it is also the only network on TV to show anime but only saturday nights starting at midnight.
This is one of the main reasons I don't watch TV. its because there is not enough content on TV that I like but there is a whole backlog of adult Cartoons and regular cartoons to choose from. it is also why I started watching more anime is because there is an insane amount of variety in anime that simply does not exist with animation in America. There are Sci-Fi, Comedy, Drama, Action and every other genre there is in American television. Streaming services like Netflix are becoming a destination for original content. (Yarow) This is also true for the anime services I subscribe to such as Crunchy Roll and Funimation. These services allow for tuning into a new shows premiere completely online.
Netflix does have a lot of anime on its service but it is still Netflix as in it does not get the latest shows and I need to subscribe to the other services if I want to see new shows as they come out. TV today is much like the longtail because TV networks only have so much time in the day to show stuff and only show stuff that gets the best ratings. with the internet's unlimited space anyone could access the whole back catalog of shows and watch things that were not shown on TV or have not been shown on TV in a long time. This allows for internet services to have a huge catalog of shows and not worry if they are pulling their weight.
works cited
Adalian, Josef. "There Were Over 400 Scripted TV Shows on the Air in 2015." Vulture 16 Dec. 2015. Web.
Yarow, Jay. "An Investment Banker Made This Epic Presentation on The Future Of TV." Business Insider. 6 July 2014. Web.
I posted the wrong source for the second one. it should be
Delete"5 Things Netflix, Inc. Management Wants You to Know." The Motley Fool. 27 Jan. 2015. Web.
This comment has been removed by the author.
ReplyDeleteBen,
ReplyDeleteI think that this was an interesting approach and I agree that taking risks is what will get a network noticed. I remember back in my junior year of High School my English teacher told our class that taking creative risks with our writing is something that will separate us from those that play by the rules. This statement has stuck with me, and I believe that it applies to more than just writing. In order to maintain an audience and keep people coming back for more a show needs to demonstrate that it is different from the others – it is the neon pink blouse in a sea of black. For example the show that comes to mind is American Horror Story. Right off the bat, I want to know why that name was chosen, what the show is about, but more importantly – I want to watch it. It is said that there is no original idea, and while that may be true it is what a network does with the unoriginal idea to make it unique that’s important.
As far as television hitting its peak in 2015 or 2016, Terence Kawaja does not believe this to be the case. He says, “TV spend shows no sign of slowing down. Linear television, the one everyone says is going to die, is a growth industry. In fact, television is growing more in absolute dollars than the size of the entire digital video industry” (Yarow). He is an investment banker, and so he thinks like a businessman. Linear television isn’t dying, but it is going to have to be strategic with the alliances and partnerships that it wishes to explore in the future. FX must also consider this since its shows are in line with the content produced on Netflix. Maybe if they were to create an uncensored show and partner with Netflix to publish the content they would see an increase in viewership. FX already takes more risks than most networks, so using Netflix as insurance may help sustain their growth.
Netflix, in my opinion, has become a significant leader in the creation of original content, and so if FX was the first network to team up with them it could be beneficial for their overall standing. According to an article, “Analyst Mark Mahaney asked why Netflix needed more capital if it expected to stay profitable for the next two years and then become even more profitable thereafter. The answer is that Netflix is investing heavily in new original content” (Fool). Netflix has seen how successful their original content is, and so by creating new shows they will appeal to mass audiences. If I was a cable network then I would take Terence Kawaja’s advice and I would start thinking up a merger.
Works Cited:
"5 Things Netflix, Inc. Management Wants You to Know." The Motley Fool. 27 Jan.
2015. Web.
Yarow, Jay. "An Investment Banker Made This Epic Presentation on The Future Of
TV." Business Insider. 6 July 2014. Web.
Ryan Miller
ReplyDeleteI chose to respond to Ben’s article for one primary reason: FX is far and away superior to any network it competes against. That’s a big claim I know, but in so many way it has shattered the mold of what traditional television is so greatly that it can only be copied by its competition. Ben made several points that I strongly agree with, but I would like to further evaluate the greatness of the show Its Always Sunny in Philadelphia, as well the show Man seeking woman, an unbelievably original comedy from the mind of the great Lorne Michaels.
As noted in the article by Vulture, “According to the crack research team at FX Networks, a whopping 409 scripted comedies and dramas aired on cable, broadcast, and streaming outlets in 2015” (Adalian). With so many options and scripts to be gobbled up by consumers, it takes a great deal of talent and individuality to make a hit. Rob McElhenney and the rest of the gang have exactly that in Sunny. Their 11th and quit possibly their best season is at its midpoint, and I’ve noticed something that is currently happening that Ben noted in his article. The show is making more and more references to past gags and jokes that have been so loved by the fans in the past. This nods to his idea of the anthology. While sunny is not an entirely new plot line each season, it does allude to its past and the core of material that fans love, similar to many other shows on their network. I one time was watching a behind the scenes of Sunny and they acknowledged that without the boldness of FX, their show would not have been able to survive for as long as it has with as much success.
A newer show to the FX family but one with a great deal of success is Man seeking woman. This show taxes an unorthodox approach to show people the lives of young adults searching for meaning in the realm of love and work. It is in my opinion FX’s attempt to hit a millennial market that is craving the weird and the bold in their television. “"Millennials are bound together by a core group of values: the idea of perseverance, inner strength, self-confidence and bravery” (Rose). It is true that the heavy influence of millenial’s weighs greatly on the decisions that networks must make in regard to programing, and I truly believe that FX has put itself into an excellent position to stake their claim at the top of the television market.
Work Cited
Adalian, Josef. "There Were Over 400 Scripted TV Shows on the Air in 2015." Vulture. N.p., 16 Dec. 2015. Web. 16 Feb. 2016.
Rose, Lacey, and Michael O'Connell. "USA Network Goes Darker to Court Millennials." The Hollywood Reporter. N.p., 8 June 2015. Web. 16 Feb. 2016.
This comment has been removed by the author.
ReplyDeleteI think FX has the bright idea. They have started in a direction that will ultimately be successful for them, and as it has shown thus far it has been. I think other channels will recognize this when Netflix and other streaming services take more of their business away then they will be able to handle financially. Although the TV industry is still super successful as the investment banker Terence Kawaja said during his presentation on the future of television, "TV spend shows no sign of slowing down. Linear television, the one everyone says is going to die, is a growth industry. In fact, television is growing more in absolute dollars than the size of the entire digital video industry" (Yarow). The confusing part to us viewers is… who’s missing out? Streaming services or traditional broadcast or cable TV network?
ReplyDeleteWell streaming services like Netflix are recording high earnings in their last Q4 but still worrying about staying profitable in the next two year (Fool). This may be partly because of what you’ve said Ben. FX and other channels are finding their niches. When they find their own way of differentiating themselves from other networks or channels they pool in an audience that often grows through popularity. Your best example, American Horror Story. Another channel that has recently rebranded to bring in new viewers is ABC Family’s now Freeform. Like FX attracts mainly young men, you could say Freeform is it’s gender counterpart. ABC Family’s President, Tom Ascheim, was interviewed by The Hollywood Reporter and the article mentions that “ABC Family is coming off its best financial year on record and has remained No. 1 in its core women 18-49 demographic for the second consecutive year” (Rose). “So, why mess with a good thing?” he asked, and then answered, “We, like any business, need to grow, and growth only comes from two places: You make your core customers happy and you get new customers” (Rose).
Just as FX has found their niche and is taking advantage of that just as Freeform now is. ABC Family changed their name due to its connotation and the viewers that connotation was holding back. The network television part of the television industry is starting to take on a different form for the future so it seems. With all the other competition that is popping up, either on the television or on the computer screen, it’s going to be important for the stations that want to survive to really understand their audience. TV channels and networks like the History Channel and Animal Planet have already started to do this. Competition within the industry will be less about having the same content and which viewers will watch but more about who’s content is in their niche and more worthy of watching on live TV. That’s where companies make their Ad money. FX and Freeform are moving in the right direction. Although successful, they understand that acquiring new viewers is the way to go but hopefully they don’t try and cater to a new audience they see coming in. That is the potential mistake that a network could make. Attracting a new audience but then catering to that new audience. They would eventually end up without their original audience. If the network brands itself it must stay that way for a while. Constant rebranding will lose all of its viewers because nobody will know what they channel is actually about.
"5 Things Netflix, Inc. Management Wants You to Know." The Motley Fool. 27 Jan.
2015. Web.
Yarow, Jay. "An Investment Banker Made This Epic Presentation on The Future Of
TV." Business Insider. 6 July 2014. Web.
Rose, Lacey. "ABC Family President Talks Freeform Name Change, Ditching 'Hallowed' Brand Association." The Hollywood Reporter. 9 January 2016. Web.
Christie Lynch
ReplyDeleteI am very interested in Ben’s post because I recently have discovered my love for anthology programming and FX does it so well. American Horror Story is the first anthology program I had ever watched, and I am fascinated by the vastly different and original stories they produce with each passing season. This allows for a growing audience because with the seasons unconnected, you can go back and watch different seasons that have already aired completely out of order, and not be left behind. The creative mind that is allowed to overstep the boundaries of basic TV is going to allure millennials with ease, as we like to be the first to experience something new. In the Hollywood Reporter article USA Network Goes Darker to Court Millennials, USA president Chris McCumber reveals his opinion on what values millennials hold which included, “the idea of perseverance, inner strength, self-confidence, and bravery.” These assets are displayed in AHS through the constant overcoming of gruesome struggles by the main characters. When I think about anthology programming, my mind immediately goes to FX, which is a unique quality of the network that they should be proud of. I agree with Ben’s point that FX has developed their own identity known for taking these risks and it has rewarded them with growing popularity. I feel as though anthology shows are also good for the impatient TV watcher. If you are someone who doesn’t feel they have the time to start a new show to follow along for seasons upon seasons, then anthology programming is the perfect way to keep your attention and get through a storyline much faster. Another thing I have found is that with anthology programming you are getting more out of a TV show from its creators than you would have before. This programming pushes the drive for new content more often, allowing more ideas to be followed through with that give the show its own creative freedom. This reminded me of another point of Ben’s I agreed with that says the major key to a networks success in dealing with original series is enticing creative, talented people with artistic freedom rather than more money. This allows for shows to be created out of passion instead of the basis of ratings.
In the article by Adalian, it says that,“Landgraf and other industryites have predicted a bubble and slowdown soon, but so far, it’s hard to see any sign of that on the horizon.” I do not think the prediction is a good one, seeing as the TV industry is really pushing the envelope these days and even trying to reestablish the way people watch TV. FX keeps dishing out programs that I am impressed with, the newest one being American Crime Story: The People V OJ Simpson. The hype behind this program was what first got me interested, but the actual show made me keep coming back for more. The idea to create this mini-series was an excellent move by FX because it is such a controversial and public court case. This is a show that sparks conversation so quickly that it almost advertises itself. Many people I have come in contact with asks “have you seen that OJ Simpson show yet?” FX has really outdone itself as far as pushing the envelope on original TV programming, and I can't wait to see what the future holds for the network.
Works Cited
Adalian, Josef. "There Were Over 400 Scripted TV Shows on the Air in 2015." Vulture. N.p., 16 Dec. 2015. Web. 13 Feb. 2016.
Rose, Lacey, and Michael O'Connell. "USA Network Goes Darker to Court Millennials." The Hollywood Reporter. N.p., 8 June 2015. Web. 16 Feb. 2016.
I cannot lie I don’t really watch FX except for their shows that are on Netflix like “The League”, “Its Always Sunny in Philadelphia” and “American Horror Story.” Compared to other broadcast networks and their shows I can definitely tell that FX isn’t traditional in sense that their shows are more out there than most. I agree with Ben’s statement, “The major key to the network’s success when it comes to original series consists of luring creative, talented people with the promise of artistic freedom as opposed to a financial bonus.” I think FX really separated themselves from the rest with the new series “The People v. O.J. Simpson. The O.J. trial is one of the most talked about crime stories to date and with this new FX series it gives an extremely realistic play by play of what actually happened over 20 years ago. Even my 15-year-old sister would ask questions about the O.J. trial and now her and her friends are watching this new series. For live television networks there is a limit of creative freedom for shows. It is rare and great that a big time TV network like FX has given its creators as much creative liberty as they possibly can give but it still doesn’t compare to the creative freedom that Netflix creators have.
ReplyDeleteAll in all, I would probably take Netflix over FX any day. I think it is create the FX is separating its self from typical television but cable TV is on a major decline while Netflix is progressively growing. “Let’s face it... cable television is on its way out and the “death of TV” (Levine-Weinburg 1). I completely agree and I don’t think one network is going to save cable television. “While basic cable has driven most of the content boom during the ’00s and ’10s, streaming outlets — mostly Netflix, but also Amazon, Hulu, and Crackle — represented the largest growth segment this year, both on a percentage basis and in total new series” (Adalian 1). I think president John Landgraf should think about working out some sort of deal with Netflix instead of trashing their shows. It’s not a secret that cable is on a downward spiral, he should be careful the bridges he burns.
Works Cited
Levine-Weinburg, Adam. "5 Things Netflix, Inc. Management Wants You to Know -- The Motley Fool." The Motley Fool. The Motley Fool, 27 Jan. 2015. Web. 14 Feb. 2016.
Adalian, Josef. "There Were Over 400 Scripted TV Shows on the Air in 2015." Vulture. N.p., 16 Dec. 2015. Web. 13 Feb. 2016.
Ben’s post is a little difficult of me to respond to considering I am pretty ill-advised when it comes to business talk. I am aware of the obvious success that FX has gained over the years. Ben mentions how FX’s shows withstand the test of time, and successfully lasts for more than five seasons. Their success is obviously coming from their anthology mind-set. It’s a collection, it’s miscellaneous, and it’s constantly fresh. That is what will keep people glued to the Television; the same characters, in different situations and crises. Shows like American Horror Story and Sons of Anarchy have set their ground to have diverse themes and plots throughout their seasons, keeping the audience on a constant cliffhanger. This is an apparent way to keep viewers coming back, which makes their business tactic successful.
ReplyDeleteFor their newest hit show, The People vs. OJ Simpson, one thing really stuck out for me: the actors. In this show you have some of the greatest Hollywood actors, such as John Travolta, Cuba Gooding Jr., Selma Blair, Courtney B. Vance, etc. This is huge for television. FX has taken one of the most talked about crime investigations that the media has ever seen, and is portraying it through respected Hollywood actors. If this was made into a movie, there is no way they would see the kind of success they are seeing now. It was named the number one rated show in delivery of adults 18-49 and adults 18-34 for consecutive weeks.
The show immediately dives into the bloody discovery of the bodies of Nicole Brown-Simpson and Ronald Goldman. The story is intense, the camera movement is fierce, the acting is spot on and the absurdity of the Ford Bronco chase is adeptly re-created. This is all to be expected on FX. Marc Berman, from CampaignLive.com says that if this show wasn’t on FX, the story would not be done justice. “This is a tremendously entertaining program that addresses many critical and societal issues that are at the forefront of the current national dialogue," promised FX’s John Landgraf at the recent Television Critics Association Press Tour. "Included is race, domestic violence, gender discrimination, the 24/7 news cycle, celebrity, class, and our sometimes broken criminal justice system” (Berman 2016).
This show will continue to rise to the top because it is not only accurately and flawlessly portraying a timeless tragedy, but it is also courting millennials in the viewing process. "Millennials are bound together by a core group of values: the idea of perseverance, inner strength, self-confidence and bravery” (Rose 2015).
WORK CITED:
Rose, Lacey, and Michael O'Connell. "USA Network Goes Darker to Court Millennials." The Hollywood Reporter. N.p., 8 June 2015. Web. 16 Feb. 2016.
Why only FX could do justice to 'O.J. Simpson'
http://www.campaignlive.com/article/why-fx-justice-oj-simpson/1383786. Marc Berman. 2016. Web.