Following game-changing upfronts dominated by pickups and renewals favoring owned and co-owned series, the shift carried over to pilot season, with networks picking up projects from their sister studios and co-productions dominating orders from outside studios. The new paradigm led to a dramatic showdown between CBS and 20th Century Fox TV that resulted in the demise of a project that had been Image (1) mattnix__130906152156.png for post 579615Holdenjones)quietly picked up to pilot: a crime drama from Burn Notice creator Matt Nix and Black Box creator Amy Holden Jones. I’ve learned that the project, which originally had a put pilot commitment backed by a large penalty, was ordered to pilot Tuesday contingent on 20th TV agreeing on co-production with CBS TV Studios. While the two sides had already laid the groundwork with a general consensus for a co-production, I hear they ultimately could not reach an agreement on some issues, and the project, which had been gearing up for pre-production, is now dead. Its demise underscores the treacherous waters of the new media landscape where program ownership and digital rights have become more important than ever.

CBS traditionally has been the most aggressive in that area. Starting in the late 1990s, the network would automatically ask for co-production on most projects, ending up co-owning lucrative series that it didn’t develop such as ABC Studios’ Criminal Minds. Yet as of this week, following the cancellation of Angel From Hell, all of the comedy series on CBS’ schedule are fully owned by the two studios that traditionally don’t do co-productions, Warner Bros. TV and 20th Century Fox TV.

CBS Logo 2The network had been sending out feelers to Warner Bros. TV and 20th TV about co-productions, but in the past, there had been no takers. I hear those efforts may have been stepped up this season. There have been rumors about a conversation at a corporate level between CBS and Warner Bros. — which are partners on the CW — that while the biggest packages won’t be affected, on everything else CBS may seek a co-production.

WBTV, one of CBS’ top suppliers with eight scripted series, landed two pilot orders at the network this year — for drama Training Day and comedy What Goes Around Comes Around — down from five pilot orders last season. Of CBS’ 17 comedy and drama pilots ordered, three — the two from WBTV and Universal TV’s Tina Fey-produced The Kicker — are not produced by CBS TV Studios or listed co-productions. While none of the 3 are officially co-productions, there have been whispers about concessions CBS had pursued, possibly successfully, and I hear that some sort of side deals were likely made on some or all of them. The rest of CBS’ pilots include co-productions with Sony TV, ABC Studios and Universal TV.

CBSCBS and 20th TV have had a difficult relationship over the past couple of seasons. After tough talks that resulted in the cancellation of the studio’s freshman comedy Friends With Better Lives and the pass for the How I Met Your Mother spinoff pilot, 20th TV did not have a show on CBS during the 2014-2015 season for the first time in decades.

The two companies opened a new chapter last season with a pilot and subsequent series order for 20th TV’s Life In Pieces, which airs behind flagship The Big Bang Theory. But there was another behind-the-scene battle last fall over the size of the comedy’s back order (it ended up being full-season 22 episodes), which left the two sides bruised.

Things started to look up as the current development season shifted into high gear. I hear 20th TV reached out to CBS indicating that it would be open to co-productions. That led to the pilot pickup of the Matt Nix project, which would’ve been 20th TV’s only CBS pilot this season.

NEW_TCFTV Logo (1)As for the subsequent blowup, it is hard to pinpoint exactly why things went wrong. I hear CBS felt that they had a studio that had offered a co-production but reneged on the offer when the time came to seal the deal. Meanwhile, I hear that while the possibility of a co-pro was on the table, for 20th TV the deal fell apart over issues related to global distribution and stacking. (20th TV has held a hard line on stacking rights, leading to multiple tough negotiations on the cable side. Meanwhile, international rights are important for drama series which traditionally travel well abroad.)

Regardless of what led to the project’s demise, I hear the impact has been hard on all involved because they had worked on the show for months, and the reasons for it not going forward have had nothing to do with creative.

Big 4 network logosBut they have everything to do with the new normal in the TV business, where content ownership is considered paramount.

This season, both ABC and Fox own or co-own more than 80% of their scripted programming (over 60% for CBS and NBC). Owning as many as possible of their pilots has been a guiding principle for ABC, Fox and CBS.

Besides two pilots from WBTV, ABC owns or co-owns all of its other pilots. All five Sony TV pilots at ABC are co-productions with ABC Studios, despite some not being jointly owned at the time of the pickups. I hear Sony TV proactively sought co-production, which a number of outside studios do because that presumably gives a project a better shot if the network has a financial interest in it.

ABC’s imaginary friend comedy pilot from Adam F. Goldberg was originally fully owned for Sony. It is a very expensive, single-camera comedy with CGI elements, and the pilot was slated to film in Canada to keep the budget manageable. When ABC Studios stepped in as co-producer, the project was able to film in Los Angeles thanks to defraying costs.

ABC and 20th TV have engaged in co-production trading the past two seasons. Last season, 20th TV gave ABC Studio half of its ABC drama pilot Runner, getting in exchange co-production on ABC Studios’ Fox comedy pilot Grandfathered, which went to series. This year, I’ve learned that the companies did it again, with 20th TV coming in as co-producer on ABC Studios’ Courteney Cox Fox comedy pilot and ABC Studios joining 20th TV on its Scott Silveri ABC comedy pilot. There also have been conversations about Sony TV’s comedy project What Up Wahlbergs, inspired by the Wahlberg brothers as kids growing up. It was set up at ABC last season with ABC Studios producing. Now it is at Fox and has been considered for a potential pilot pickup but an order has been complicated by the fact that doing a three-way co-production among Sony TV, ABCS and 20th TV is proving difficult.

Besides the co-production on the Courteney Cox pilot and two pilots from WBTV, Fox fully owns all other of its pilots, which come from 20th TV.

NBC has been the most liberal so far, giving some of its best time slots to outside series like Sony TV’s The Blacklist and WBTV’s Blindside and not pushing heavily for co-production at the pilot stage. (The network has been a little more aggressive when series-pickup decisions are made, leading to Sony TV drama Game Of Silence becoming a co-production with Universal TV last May). Observers expect that to change as the corporate push for ownership across all media companies continues to gain momentum.

As TV ad dollars are starting to dry up, ad revenue from a show alone no longer is enough to sustain a network’s profit margins as those margins become slimmer and slimmer. Owning content becomes crucial in the new digital universe where there are so many means of distribution. Of course, there are dangers from self-funding the majority of a network’s slate — with broadcast television’s 80% failure ratio, networks’ in-house studios are taking on a big financial burden, which contributed to the reopening up of the broadcast field to independents after a similar push for ownership a decade ago.

However, with the digital future beckoning, program ownership has become the next primetime frontier, and few see things going back this time.