FX’s John Landgraf, the designated oracle of the TV industry, closed the two-week marathon of TCA presentations with a speech about the threats to the TV ecosystem, including the rise in monopoly of video distribution, the continuing increase of number of original series, and the strategy of unlimited spending on programming.
After very brief pleasantries, he quickly addressed “the elephant in the room at TCA — the massive transformation, disruptions the business is undergoing.”
While he previously had called out Netflix as a monopoly that threatens the TV business, he refrained from addressing the streaming giant by name this time, instead using a lot of metaphors and allegories, including comparing himself and traditional network toppers like HBO’s Casey Bloys and AMC’s Charlie Collier to chess master Gary Kasparov fighting supercomputer Deep Blue, used as a symbol of the Silicon Valley giants that are invading the TV space. Said Landgraf, “I want humans to win against the machines” in what he described as “titanic struggle.”
He also used the word “tsunami” and an image of a person pinned to a wall by a water cannon like those used by riot police to illustrate being “shot in the face by money every day,” a reference to the extraordinary amount of money thrown at original programming by Internet giants like Netflix and Amazon.
Again without naming names, he compared the $7 billion FX parent 21st Century Fox makes in profit annually to the negative $2.5 billion balance sheet of an Internet company that spends big on original programming. Landgraf mused for a moment what he might do with an additional $9 billion available to spend, before saying that that does not appeal to him and that he likes a smaller-scale, more personal approach to programming.
“I am not interested in the world’s biggest leap of faith, I’m interested in more tightly curated quality control,” he said, praising diversity, which “allows to access exciting talent.”
In his semi-annual Peak TV update, Landgraf revealed that 2017 to date, some 342 scripted series have aired, up from 325 over the same period last year. The increase once again was driven by streaming services, responsible for 62 series this year to date compared to 51 last year. Landgraf noted that there are 79 series announced by streaming services that are yet to air this year.
“And that is before Apple has made any dent,” Landgraff added, referring to the Silicon Valley mammoth’s entry into original scripted programming with the high-profile hire of Sony TV’s Zack Van Amburg and Jamie Erlicht. So the peak of Peak TV continues to be a moving target as the number of original scripted series “is going to continue to grow,” Landgraf said.
Weighing in on Apple’s pending entrance into a crowded TV series field, Landgraf warned, “Wait for the epic titanic fight for talent.”
This was one of two “epic” references made by Landgraf when talking about the current state of the TV business under assault. “Beyond television we’re all watching an epic battle unfold for who will control human attention. For who controls attention, controls its monetizing.”
Landgraf spent a long time on the topic of monopoly, using a slew of examples of how monopolies in various industries have crushed local entrepreneurship, which has been the backbone of a prosperous middle class, stemming wage growth.
He used a parable about a company that starts business selling $100 bills for $90. “Soon it becomes the most valuable company on earth while losing money. Why do investors value that while devalue businesses that are profitable? Because the government lost the ability to regulate monopolies; scale has become the only measure of value in the current economy.”
He extrapolated that to video distribution and the new battleground of broadband.
“There should be an alternate broadband system,” Landgraf said.