FX finished with the 10/90 experiment

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FX "Probably" Won't Continue 10/90 Show Strategy, CEO Says
by Georg Szalai

FX Networks and Productions CEO John Landgraf told an investor
conference Wednesday that "we have really now achieved a scale that
allows us to truly compete with Netflix and HBO," predicting further
ratings and financial upside for his group that is part of Rupert
Murdoch's 21st Century Fox.

Speaking at the Bank of America Merrill Lynch Media, Communications
and Entertainment Conference in Beverly Hills, he also said the
company will likely stop acquiring shows under so-called 10/90 deals,
such as Anger Management with Charlie Sheen, George Lopez's Saint
George and Partners with Kelsey Grammer and Martin Lawrence. The model
works like this. If the first 10 episodes of a show hit certain
audience targets, it gets a guaranteed renewal for 90 episodes.

"The business of renting programming is nonsense," he said in
explaining how the company has been looking at content before going
into the 10/90 model. "Charlie's show has been solid, but the other
two not particularly solid. And nothing has been really a juggernaut.
To tell you the truth, I look at this as probably an experiment we
won't continue in the long run." Instead, the company will focus on
its premium brand, he said.

Landgraf also promised that his team would in the future work to
"raise the bar at FXM" after focusing on putting FXX on the map over
its first year. He didn't share immediate details on the strategy for
FXM, or FX Movie Channel.

Discussing subscription VOD, Landgraf once again said that FX has had
some concerns about Netflix's lack of branding shows it licenses,
which means that FX hit Sons of Anarchy is "becoming essentially a
Netflix original series" on the streaming service. "We need
significant branding," he said, adding that Netflix chief content
officer Ted Sarandos "is starting to come around."

But he said compared to Amazon and Hulu, Netflix has had more power.
"They are bigger, they are more stubborn" and "a little tougher about
promoting us," he said.

Asked about growth drivers for FX, Landgraf said most will come from
affiliate fee increases, while he sees advertising as "slow-growing"
revenue. Content revenue will also be a good growth contributor thanks
to, for example, growth in transactional home entertainment, he said.

Asked about parent company 21st Century Fox's recent bid for Time
Warner, which it later dropped, Landgraf said he understood the
rationale, saying it could have created a company with "unique, really
unparalleled scale."

Asked about the benefits of being part of Fox, he cited talks with pay
TV giants. "Distributors are tough and bigger. What really makes you
must-have is when you have Fox News, regional sports networks" and the
like in the same group. "You can actually have a conversation about
the value of a channel."

[James28]

How about this 10/90 experiment for television series gets banned from television altogether, cable or broadcast? I have always thought that it was such a terrible concept.

[mets82]

The 10/90 seems such a risk. What if the first 10 or even 20 episodes are good but the rest stink? Then your stuck with a lousy show.

[Mace Dolex]

Yeah and so what if Charlie Sheen has been in the media spotlight recently nobody really wants to see him in yet another POS of a show.

[comedyfreak]

So Partners isn't going to get picked up I gather. It was a heck of a lot better than Saint George.