Small Screen, Big Money

Television producers are bucking the system by financing new projects themselves.

About a year ago, producer Ami Amir, an owner of the Matar Plus production company, tried to interest the television organizations in Israel in a comedy series that had come across his desk.

Amir, equipped with a script and an enthusiastic creative team, made all the familiar stops: From the Channel 2 franchisees he went on to Channel 10 and from there to the satellite and cable companies. But the answer was always no.

A scene from
A scene from the new comedy "Gavoah and Greenbaum."Nimrod Shragai

Amir's story is indicative of how the industry works in Israel. Since the television market is small and poor, creative people who join together in a production company are subject to the good graces of the few broadcast platforms. Even if the idea wins a producer's full confidence, large sums of money are needed to take it from page to screen. Only Yes, HOT, Channel 2 operators Keshet and Reshet and Channel 10 are in a position to finance new series.

In the end, though, Amir's attempt met with success. In an unusual move made possible by his production company's strong economic backing - the advertising powerhouse McCann is a partner in it - money was invested independently to produce a pilot for the series.

The second round of meetings, with three completed episodes in hand, ended in a completely different way. The series, "Gavoah and Greenbaum," was purchased by Channel 2 franchisee Keshet. Ten episodes, in addition to the three that have already been filmed, have been purchased for broadcast. The director is Daniel Adar and the writer is Ran Appelberg.

The cost of developing the show, including the writing of an episode or two, is between $8,000 and $12,000, the cost of producing a pilot runs from NIS 400,000 to NIS 600,000 and the cost of producing an entire series can cost millions of shekels.

The other side of the equation is the producer's copyright on the finished products. In Israel, unlike in European countries, there is no legislation to standardize intellectual property rights for television works. Therefore, when the money leaves the pockets of the franchisees the producer is likely to discover he has hardly any rights to the final product and he does not receive any income after the first broadcast.

Amir's method of bypassing the usual players to get a pilot, may indicate a sea change in the way things are done. Gradually, though as of now this applies only to the large production companies, the industry is moving in toward international standards.

Joining the list of production companies that have self-financed and come out ahead are Herzliya Studios, which is investing more and more money in developing and producing shows, and the Dori Media group, which created the interactive Internet reality show "uMan," and gambled on the television series "Split."

Protect the copyright

The new trend, say various producers, has to do with changes in the television industry in recent years.

"The system in place at the moment in fact robs the producer of his copyright on the final product," says Yoav Peretz, the CEO of Herzliya Studios. "Maybe he has a share in the profits when the program is broadcast on television but he does not have a share in the copyright. This is becoming particularly problematic nowadays, when a broadcast organization has additional income from broadcasting content on the Internet or on sites with which it has cooperation agreements, on cellular phones or on video on demand. I see myself as the farmer, but instead of buying the fruit, the broadcast organizations want to buy the tree."

Peretz's farmer analogy is well-suited to the story of the production of the successful daily drama "Asfur." Sources in the industry say the producer of the series, Udi Segal, read the reports about his hit series, which has been ordered more than a million times on VOD, but discovered he had no part in the profits coming in from the orders.

"We, as a large production company, know how to put down money," explains Peretz, giving as examples the program "Let's See You," which is broadcast on Channel 2 and was funded by Herzliya Studios, and another drama under development, the entire production of which will be funded without the involvement of a franchisee.

"We realized that in the long run a production company that doesn't own copyrights will die," says Peretz. "When there is additional income today from side media you can't give it up. We invest many millions in development, we look for dramas and sitcoms and we are prepared to fund them without a franchisee. Until now a producer would set out only in cooperation with a franchisee. It's not like that any more."

Even though the risk is huge?

"The higher the risk, the greater the return. In television there is no return nowadays. If you go to a franchisee or a broadcast organization in the usual way, you receive producer's pay up to 10 percent of the cost and you see from the side how the VOD and the websites are broadcasting what you have made. A producer who doesn't have copyrights has no future." Yoni Paran, the CEO of Dori Media Darset, agrees that producers must protect their rights in the changing media landscape.

"Large production companies, with economic backing, are raising the gauntlet. In 'Split' we did go with HOT from the outset but since this was a project intended for broadcast only on VOD, the budget was limited. We could have made do with that funding but we preferred to make an excellent product and we invested quite a lot of money. This was also manifested in the copyright on the final result," he said.

Looking overseas

Creating a higher quality product increases the chances that the show or format will be ripe for international picking. The past several years have been characterized by increasing openness on the part of the international market to Israel formats and programs. The possibility of selling a format to a foreign market is becoming attractive to producers when they have rights to it.

"What Herzliya Studios, Matar and Dori Media Darset have in common is that they're thinking about outside Israel more than the others," says Karni Ziv, deputy CEO for programming at Channel 10 and until recently deputy contents CEO at HOT. "Someone who has started selling abroad on his own, or through a format distribution agency, is prepared to and wants to develop on his own. He sees a chance of covering the risks."

Pushing out smaller fish

However, calling this new trend the norm may be jumping the gun. According to content directors at the broadcast organizations, only a few producers will be able to take the large risk entailed in this kind of work.

If this does become the standard, small or mid-sized production companies could go under.

Even now, say producers, there are a number of prominent production companies able to produce and specialize in a variety of genres, among them reality, entertainment and drama.

The next phase could be production companies that become larger media organizations and leave smaller competitors behind.

"This is a move that requires a number of things from you as a producer," explains Amir. "You have to aim at a product you are able to make and know it is something in your area of expertise, and you have to be ready and able to absorb a loss."

In Amir's case, this entailed an investment of $150,000, which to a large extent was made possible thanks to the partnership with McCann.

Throwing some cold water on the enthusiasm, deputy CEO for content at Yes, Yona Wiesenthal says, "There's a big difference between investment in a drama and investment in the Internet. When that happens here in Israel, it is welcome but it isn't really happening in this country. Few organizations have deep pockets. There is hardly a production company today that is able to do this. I don't see this as the start of a trend, but rather as an exception that proves the rule."

"To get to a franchisee with a pilot is an advantage, but also a disadvantage," explains Ziv. "On the one hand, it is easier for the franchisee to make a decision when he sees a finished product. On the other hand, broadcast organizations in Israel want to be partners on the creative side and they don't like getting a cassette because they feel, and rightly, that they know their viewer at least as well as the producer does. The system of 'take a cassette and broadcast it' works less well in this country."

What will this do to the small and mid-sized production companies? "In the world of scripted dramas the big money isn't the development or the pilot. At the end of the day the broadcast organization invests a lot of money in the production of the series. No producer is able to do this alone. When a broadcast organization decides to invest a good several million, on the bottom line the thing that will play a role is whether there is a good story. If someone has already invested in development or a pilot this might make the processes move a bit faster. If it's half-done that could help but if it isn't good enough, nothing can convince a franchisee to choose it."