SYNDICATION

Syndication is the practice of selling rights to the presentation of television programs, especially to more than one customer such as a television station, a cable channel, or a programming service such as a national broadcasting system. The syndication of television programs is a fundamental financial component of television industries. Long a crucial factor in the economics of the U.S. industry, syndication is now a worldwide activity involving the sales of programming produced in many countries.

A syndicator is a firm which acquires the rights to programs for purposes of marketing them to additional customers. The syndication marketplace in fact provides the bulk of programming seen by the public. For the internal U.S. market, for example, syndication is the source of the "reruns" often seen on network television, and of much material seen on cable networks. Internationally, large amounts of American television programming are sold through syndication for programming alongside material produced locally. Material not available in syndication includes current network prime time programs, live news programs and live coverage of sporting and other special events. Even current U.S. programs, however, may be syndicated in international markets, and American viewers may sometimes see imported programs, usually from England, currently programmed in other countries.

The price for a syndicated television series is determined by its success with audiences and the number and type of "run" in which the program appears. A national run is the presentation of a film or program one time to a national audience. This notion of national run has been borrowed from the history of distributing theatrical films. Any number of theaters or communities may be included in the first run of a production. But as soon as any location receives a second presentation, the second national run has begun. Generally speaking, the cost of rights to present a television series declines as it is presented in later and later runs although, as indicated below, that rule does not always hold in the international market.

Repeated sales of television programs, both within the United States and throughout the world, has long been central to the profitability of the American television industry. Soon after U.S. television production shifted from live performance to film in the late 1950s, shrewd sales personnel realized that television products had additional life. Audiences would, in fact, watch the same program a second time, and perhaps return for repeated viewing. Moreover, many countries found it far more economical to purchase the syndicated rights to American television programs than to produce their own, opening a vast market for American products.

The cost of U.S. television programming in the international market place is generally based on whatever those markets will bear. Costs for programs in Europe are often far higher than in Africa or Latin America. No matter how small the syndication fee, however, the sales of programming produce additional income for their original production companies. In abstract economic terms this is an example of "public good theory," in which new profits are gained at no additional costs or at the marginal costs incurred in the marketing process.

Historically, syndication, whether domestic or international, served to underwrite the risky process of producing for American network television. From the late 1960s through the mid-1990s special regulations (the Financial Interest and Syndication Rules) governed relations between television networks and independent production companies. Under these rules ownership of the rights to the programs reverted to the producer/production company after a specified number of network runs. Profits from any other sales, including syndication, generally benefited the production community. For this reason many production companies were willing to produce original programs at a loss, betting on the enormous income that might rise from successful syndication. Many "failed" programs could be created with the profits from one or two successfully syndicated shows.

One way of classifying television programs in the syndication marketplace is by the first national run of the program. If the first run of a program was as part of a national network schedule, then as the program is marketed for subsequent runs to other programmers, it is referred to as "off-network syndication." Thus a cable programmer who buys the rights to presentation of a situation comedy presented by NBC is buying off-network syndication. Dallas, presented in first run on CBS in the 1978 season, was heavily programmed throughout the world as an off-network syndication.

If a program is initially made to be sold to programmers other than the major networks, however, then the program is known as "first run syndication." An example would be the weekly program, Star Search with Ed McMahon, produced by Television Program Executives (T. P. E.) and Bob Banner Associates. Similarly, Paramount Television's Star Trek: The Next Generation and other Star Trek spinoffs are produced for first run syndication. On occasion, a television program originally developed for network programming will be shifted into the first run syndication mode. This is the case with Bay Watch, a program that failed to attract a sufficient audience when programmed by NBC in 1989, and was canceled after a single season. It then went into production as a first run syndicated product and has become enormously successful in international markets.

 


Annual NAPTE syndicators convention
Photo courtesy of NAPTE

First run syndication is often the origin of programs presented as programming "strips," that is, at the same time Monday through Friday. This is the case with Entertainment Tonight, another Paramount production and also with numerous programs in the "tabloid TV" genre, game shows, and cartoons.

Barter syndication is a financial arrangement that supports a growing segment of the syndication marketplace. In barter syndication an advertiser purchases in advance all or some part of the advertising opportunities (commercial spots) in a syndicated program, no matter where the production is to be seen in any run. The advertiser benefits from the barter arrangement by insuring a friendly program environment for ads. The programmer--an independent station or a cable programmer--benefits because advertising slots are presold, assuring that the cost to acquire the program is at least partially covered. While this practice may reduce opportunities for the programmer to sell advertising time, the trade-off is considered a favorable one. The producer of the program also benefits because the prior purchase of advertising opportunities provides funds that may represent an important part of the production budget.

Increasingly, syndication is part of the worldwide television marketplace and here the producers are not always part of the U.S. industry. Brazilian, Venezuelan, and Mexican telenovelas are programmed throughout the Spanish-speaking world and even in less predictable contexts such as India and Russia. British programming is seen in the United States and throughout Europe and the rest of the world. In these cases and many others, syndication is seen as an economic benefit. As in the American context, the profits generated by syndication can be used to produce other material on a speculative basis and to bolster the production of the first-run production process. As television distribution channels proliferate throughout the world and the demand for product to fill those channels grows, it is likely that more and more producers in more and more contexts will create materials for sale to the syndication market.

-James Fletcher

FURTHER READING

Blumler, Jay G. "Prospects for Creativity in the New Television Marketplace: Evidence from Program Makers." Journal of Communication (New York), Autumn, 1990.

Covington, William G., Jr. "The Financial Interest and Syndication Rules in Retrospect: History and Analysis." Communications and the Law (New York), June, 1994.

Fletcher, James E. "The Syndication Marketplace." In, Alexander, Allison, James Owers, and Rod Carveth, editors. Media Economics: Theory and Practice. Hillsdale, New Jersey: Lawrence Erlbaum Associates, 1993.

"Glossary of Syndication Terms." Advertising Age (New York), 16 April 1990.

Kaplar, Richard T. The Financial Interest and Syndication Rules: Prime Time for Repeal. Washington, D.C.: Media Institute, 1990.

Lazarus, P.N. "Distribution: A Disorderly Dissertation." In, Squires, J.E. The Movie Business Book. Englewood Cliffs, New Jersey: Prentice Hall, 1983.

"Syndication in the 1990s." Advertising Age (New York), 10 April 1995. "What is Syndication." Advertising Age (New York), 16 May 1994.

Wildman, Steven S. and Stephen E. Siwek. International Trade in Films and Television Programs. Cambridge, Massachusetts: Ballinger, 1988.

 

See also Cable Networks; Financial Interest and Syndication Rules; International Television Program Markets; National Association of Television Programming Executives; Prime Time Access Rule; Programming; Superstation; Reruns/Repeats; Turner Broadcasting Systems