The major television networks, in an effort to hold down spiraling programming costs, are cutting the number of TV pilots ordered for the upcoming TV season.
In what many regard as one of the most inefficient rituals of the television business, each year the networks collectively order about 90 pilots from which they select only a handful of shows for their fall prime time schedules.
Fewer pilot orders are only the latest example of the new economics at play in Hollywood, where production costs have been rising faster than inflation for nearly a decade. Under pressure from eroding audiences and weak advertising revenue, all three networks are looking for ways to trim program costs, which represent two-thirds to three-quarters of a network's budget.
Robert A. Iger, president of ABC Entertainment, said ABC would order about 25% fewer pilots than it did last year. The network bought 30 pilots for the current TV season, of which it selected six for the fall schedule.
Iger cited the weak economic climate of network TV as the major reason ABC was cutting back on its pilot commitments. "Some pilots will not get made for economic reasons," he said, speculating that pilot commitments will be down at CBS and NBC as well.
But another reason pilot orders will be lower at ABC next year is because the network has entered into costly exclusive contracts with major producers that commit the network to reserve places on the schedule for their shows. These commitments reduce ABC's need to buy new programs.
A senior executive at NBC Entertainment said the network would perhaps order a "few" fewer pilots than it did last season but added that the network was trying to find more creative ways to reduce development costs, such as shortening the length of drama and action/adventure pilots to one hour from two hours.
Every year, the networks spend $150 million to $200 million to develop TV programs for the following season, which traditionally runs from October through May. Last year, the three networks bought a total of 85 pilots from the major studios and independent producers.
This year, according to studio and network executives, the number of network pilots is expected to shrink at least 20% to about 65. Talent agents report that the networks are also being more resistant to fees asked by actors and actresses. Even relatively minor players can earn $20,000 an episode in a series.
Making pilots is more expensive than producing regular series because the studios frequently hire big-ticket directors and writers to turn out the crucial first episode, which is used to sell the networks on making a series commitment.
A pilot for a half-hour comedy typically costs about $1.8 million, but if the pilot becomes a series, the production costs usually come down to about $650,000 per episode. A pilot for a one-hour show can run to more than $2.5 million, while a one-hour series costs between $1.1 million and $1.3 million per episode.
One head of TV production at a major studio said he was doing about half the number of pilots he did last year because the networks have signaled they will not be buying as many as they have in the past. Pilots that don't get picked up as series are useless and frequently get "burned off" during the low viewing summer months.
"It's an extraordinarily inefficient process," said the production head who did not want to be identified. "We just can't afford to do it any longer."