Thursday, July 19, 2007


I wrote this back in 1998 when I was working for Tom Fontana (TV Producer/Writer of OZ, Homicide, etc.). Tom wrote a tv script for a pilot and NBC gave him three weeks and $5 million to produce it so they can see how it would look. How much? Man, that just seemed like a lot of money to spend on a test! How many of these pilots at $5 mil a pop do the networks ante up for? And who gets to see them? Like any logical business person I figured there must be a way to at least earn a profit on the huge investments studios make to find a hit. Tom showed what I wrote to a couple of executives at Rysher Entertainment and one of them replied that for all sorts of reasons there was no way any studio would ever show their hand to the public. Ten years later, the problem still exists, and You Tube is booming. The Rysher executive's comments with my responses are at the end. First, here is the solution I came up with back then that sounds eerily similar to what American Idol does today to find music talent for record labels and to create stars...simply by letting the people choose! Power to the people. Who wants to do this for TV? Anyone, anyone...

the tv pilot channel
June 1998

the tv pil•ot chan•nel (thə pï¢lət chan¢əl). n. 1. an entertainment channel or programming service that airs television network pilots to draw audience and sponsor feedback. 2. a digital tool that empowers real audiences to participate in choosing what they see on TV; a really big focus group. 3. a system that establishes a better cost/benefit ratio for advertisers and studios, facilitating better return on production investments.

The TV Pilot Channel is an entertainment service, operated independently by a programming service provider, and employed by studios and networks to facilitate direct communication with the television audiences they serve. The channel’s main objective is to alleviate the risk studios assume when funding costly development of network programming. Using interactive digital technology via the Internet, The TV Pilot Channel will broaden test marketing beyond narrow focus groups and obtain information directly from real audiences.

Resembling the way information is exchanged on the internet, the channel will monitor real-time demographic and psychographic information, accessed both electronically and by the voluntarily participation of the viewer. Studios and networks can base pick-up decisions on the number of “hits” or “visits” a pilot gets on the air over a period of time. This information is confidential and owned by studios and networks to use as they see fit.

The TV Pilot Channel service will ultimately deliver…
* hand-picked entertainment to audiences
* precisely targeted customers to advertisers
* profitable hit shows to networks and studios

A win-win-win proposition.

Due to The Pilot Channel’s interactive nature, audiences instantly become involved as an important and necessary part of the programming process. As part of this new, emerging interactive culture, they won’t just “rent” television anymore…they will “own” it. Once they “own” it, they will nurture it. The “buzz” for a new show will begin with the pilot, with hype self-generated by the viewers via word-of-mouth, before the series ever hits the air. Priceless.

the expensive situation

In 1998 approximately 130 hours of original pilot programming was produced for network television – costing studios a collective investment of more than 500 million dollars. Roughly 35% of these shows produced are backed by advertisers and make it to the small screen. Out of that 35%, half will be cancelled in the first season, and perhaps one, maybe two, will find a mass audience and live on as a hit – one lucky studio’s cash cow.

which came first…the chicken or the egg…or the cash cow?

Who decides what’s on television? Are we “eating” what we’re being feed, or are we really choosing? Is the media just giving people what they want? Or are we settling for the only thing on the menu? We’re all part of this vicious cycle, and today it’s spinning at warp speed.

We used to be able to rely on the fact that human beings are creatures of habit. We also know most habits are fueled by the environment. However today, since the rate of change is so
dramatic, both the environment and habits are hard to track. Up to this point it has been impossible to work out an equation that creates a “hit” every time. Has the public always been fickle or have they been trained to be fickle?

The burden today is left to the studios that have evolved to the point where they are dependent on numbers that does not accurately define the audience. The gamble is huge and studios continue to forfeit large sums of money in lost investments. In order to reach the “broadcast quotas” necessary to keep the business running, the public has been conditioned to settle for a lowest common denominator, watered-down product that’s contrived for us by some collaboration between Hollywood and Madison Avenue. In “broadcast culture” advertisers have to hit everyone. It’s clumsy and costly. The current system doesn’t work….for anyone.

So the goal is to succeed among the masses; but we know that is extremely rare. People simply aren’t wired that way. Most television shows find smaller, segmented audiences and live on for years, barely breaking even. But, what if we can make these smaller shows highly profitable, by matching audiences with content they want and advertising they need – we can make them all cash cows!

give people what they want

Putting people in a position to “choose” is actually the first step in a long transformation that will change the way we’ll all view television in the future. The personal computer (PC) has permanently enhanced our options, and no one is going back. This is not the end of television; it’s actually the answer to greater profitability for everyone involved. No longer tied to arbitrary numbers dictated by out-of-synch focus groups and advertisers, it’s a special kind of deliverance for creators.

Chasing numbers never puts you ahead of the curve. You can never recoup the losses. It creates a culture that feeds on our mass market basic instincts, like fear and violence. The PC has been able to break free of this constant diet of junk food, and gives people choices -- similar to book culture. In book culture you get your first choice. You walk into Barnes & Noble on your street corner and get the book you want. If first choice is an option, it will always prevail. The new television system should target our unique interests, special ambitions, and hobbies, and above all, entertain. If you want it, its there; everything from Homicide to The Jerry Springer Show. Eliminate the guesswork, give the people what they want, and make it profitable.

the system must be fixed before content can be king

In a digital world, all content providers are created equal. That is the future. The competition is no longer other networks, it’s the people. Viewing on-demand will eliminate the need to choose between Homicide and 20/20. People can watch both according to their schedule. Ratings go up across the board, and ad rates follow. (“Deliverance” for the studios.) The average person does not go out and buy a book because HarperCollins published it – or buys a CD because it was just put out by their all time favorite record label. If Ally McBeal moved to NBC, would people stop watching out of loyalty to FOX? Today’s network branding campaigns are an expensive band-aid solution for a distribution system that’s bleeding internally. Brands are only as good as the content you provide, and the system must be fixed before content can be king.

beyond nielsen

The disproportionate Nielsen Ratings sample (5,000 households containing 13,000 people) has been qualified by comparing it to a pot of vegetable soup. “You don’t have to taste the whole pot to know it’s all vegetable soup.” Perhaps 20, even 10 years ago in America, that statement might have been true when we were all eating the same thing. However, in the last 5-10 years since access to information has dramatically increased, and will continue to increase, a system designed to ascertain real qualitative numbers must be put into place to meet the new demands of a very hungry public. Mother’s have always known this – not everyone in the family likes to eat the same thing.

The Federal Communications Commission requires the affiliates of the top four networks in the top 10 markets to be on the air with a digital signal by May 1, 1999; and the top 30 markets on the air by November 1, 1999. The top 30 markets include 53% of television households. By the year 2000, when people begin to plug into TV the way they do the PC, viewing may be monitored the way “hits” or “visits” are counted on the internet. This information can be accessed in the form of simple demographics, such as how many people watched (like the Nielsen ratings), or brought one step further, giving viewers the option to participate in reviews, electronic surveys, or queries. This type of voluntary interaction by the viewer can provide studios with valuable psychographic information, such as reaction to show content, what type of products they buy, etc.

This information can be used to package programs more effectively catering to specific audiences and advertisers. Advertisers in turn sell more product because they are talking directly to their customers. Efforts to broaden consumer markets are no longer pushed onto the consumer. They’re pulled by empowered consumers and viewers armed with information to make decisions. Word-of-mouth will create a cost-effective (free!) endless ripple of human generated publicity brought directly to new consumers by people they trust and know. Ultimately this cut-rate system of advertising will create broader, stable markets for new products.

free is key…higher margins by lowering costs of guessing

“Free” predestines access. The object of this game is to attract the largest audience possible to watch and rate the pilots. Subscription and pay television fragments the audience. The entertainment provided must be free, or at least offered as a free segment of a subscription service, in order to bid for the audiences valuable participation. In return, studios get information.

Low cost media will reap big rewards for the people who supply them. Just as the cost of MIPS and bits dropped 10,000 fold over the last decade, the market for computers didn’t demolish -- it exploded! In the same way, as the ability to deliver entertainment, and the cost of bandwidth collapses over the next decade, it will not destroy bandwidth suppliers -- it will make their business the central nervous system of the world economy. As things drop in price, they generate more profits even at higher margins by lowering operational costs. It’s the secret of enterprise in this era – you triumph by selling more units…smarter.

This business model has proved highly successful, again and again, especially in the last few years. “HotMail”, which provides web based email directly to customers, has built a user base faster than any other media company in history (25 million active accounts in 2 years). Why? Because it’s free. HotMail will always be free to customers because it is advertiser supported.


It’s no secret the effectiveness of advertising on television has diminished drastically. The broad, overcrowded markets are noisy, and no one is listening because we’re all too busy “searching”. Just as with programming, there is a need to move towards highly targeted marketing, with fast two-way reactions, and a high level of precision and integration.

As a service, The Pilot Channel will restore a better cost/benefit ratio to advertising. Based on the number of “hits” a pilot gets on the air, combined with “viewer feedback”, advertising platforms can be assessed, and costs per spot determined. Advertising will become more streamlined and less clumsy. Lowest common denominator or mass market advertising can virtually be eliminated. Advertisers can focus directly on their customer because they’ll have a direct open line of communication with them -- bringing better ROI, and more bang for the buck.

The Pilot Channel, in an analog format, offers advertisers the ability to reach customers in the traditional way with spots placed based on genre, etc. A digital format greatly enhances the experience by fostering interactivity. As a pilot of a particular genre or subject matter is chosen, related product advertising can be delivered along with the pilot, enabling the advertiser to reach his customer directly, and right then and there, even close the sale.


The Pilot Channel can be presented in two ways, depending on the technology available. A traditional analog programming format would resemble a music video channel, such as VH-1. Pilots would air in a continuous, rotating loop (like music videos), with ads placed according to traditional genre and market segment demographics. The looped schedule would prevent conflicts with network programming and viewer’s loyalty to other shows.

In an interactive digital format, either on it’s own, or associated with a programming service, The Pilot Channel would resemble a prevue channel or TV guide, with a continuous loop of promos and previews. Icon menus would appear on the screen, listing shows and advertisements for your selection. A software “agent” can promote specific pilots to you via email based on your previous selections and interests. As you make a selection, the pilot is delivered to your monitor along with pertinent advertisements and advertising icons.

appointment viewing eats profits

Some recent moves made by the networks, argues they are purposefully, albeit subconsciously, fazing out appointment viewing. Production costs are simply to high to produce shows 22 weeks out of the year, let alone 52. Today, with so many choices, customers get bored with repeats and stray to cable or the Internet. That weekly appointment with The X-Files is easily broken, and new habits form in its place. Networks are still competing against other networks,
when their real competition now, are the people. With their own dramatic flair, broadcasters look to “stars” as their link to stay connected to the audience they fought so hard to get. Cha-ching!

$13 million an episode x 22 weeks per year = a lot of money for a small slice of audience. But to really win this fight would take $13 million x 52 weeks a year, and that number = absurdity. Broadcasters are losing big trying to please a constantly changing fickle public. Assessing the needs of a huge fragmented audience has proved impossible. The best strategic move now is to let the audience come to you.

test model for interactive tv

The Pilot Channel is the kindergarten class designed to introduce people to the future of digital television. It will look like TV, but it won’t act like TV. It will be a user-friendly programming tutorial, outfitted to get people’s feet wet, while gently driving them beyond the passive habits television has created. Simultaneously, it will give broadcasters an opportunity to see the power of communicating directly with their viewers, while providing them an alternative distribution outlet for these finished products to earn advertising revenue. Once the benefits are established on both sides, this valuable, digital information exchange model can be applied to all future programming. On its own, or attached to a programming service or distributor, The Pilot Channel will not only launch new successful programming, but will get people plugged into the process – where we need them.


The TV Pilot Channel…

  • is an information tool used to gain better return on pilot investments
  • tracks the habits of viewers through an “agent” or software that delivers viewing results to studios to make programming decisions
  • funnels audiences directly to advertisers based on viewing habits and interests
  • provides invaluable information for advertisers quantifying rates, target markets, etc.
  • delivers valuable, up-to-the-minute viewer data from “real” audiences in a perpetually changing entertainment environment
  • provides access to pyschographic information from viewers through voluntary e-mail reviews, consumer product surveys, queries, etc.
  • is structured so studios maintain control of information specific to their pilot(s)
  • leaves final interpretation of the data to the discretion of the studio/network
  • offers relatively low operational costs for the service vs. high forfeited investments producing programming that will never generate information or revenue
  • creates an exclusive buzz with the audience that promotes new shows by word-of-mouth before the series ever hits the air
a studio executives comments (IN CAPS) and my responses


  • People watch “one-time only” movies on television all the time.
  • The exclusive, one-time nature of a pilot is fascinating to the public.
Weekly schedules will one day be a thing of the past. Episodic television will be packaged or bundled and delivered. On-demand formats will eliminate scheduling conflicts and division of market share. This will give audiences tremendous access to programming and ratings across the board will increase. The Pilot Channel is the kindergarten class of a system designed to introduce people to television of the future – the near future.


  • Only the pilots studios want on the air, will go on the air. This is a service to obtain viewer information.
  • Good is in the eye of the beholder and sometimes people love a “train wreck!”.
  • Viewers understand pilots are not always finished products. It will be one of the reasons they watch The Pilot Channel.

  • Make them “real”, or make them finished. For $5 million a piece why aren’t they finished?
  • The current attempt to move away from a seasonal pilot schedule will eliminate rush jobs and slim pickings with regard to actors and directors.
  • The system should work to enable creators the time and resources to produce a good, finished product. Or capitalize on the more realistic look…low cost/bigger profits.

  • This will be like a big “ad or “preview” channel. Pilots would be aired in a continuous, scheduled loop, (like music videos) not to conflict with network programming and viewer’s loyalty to other shows (think VH-1).
  • In the future (the near future) there will be a lot more channels and the need for a lot more content. If we become a 1000 channel universe, you may need two pilot channels, and an entertainment search broker.

    A future version of The Pilot Channel would resemble a Prevue Channel or TV Guide with a continuous loop of promos and previews. Formatted directly on the screen would be icon menus listing shows and advertisements. Viewers click on an icon and served their selection directly to their monitor (just like you do on the internet). Ad Icons are be grouped and displayed in targeted areas and delivered along with the pilot or program. If interested in a related product, or something you see displayed on the program (product placement on steroids) you click, get the information, and if you choose, buy it right then and there. Pull marketing. Viewers don’t feel interrupted or invaded. Advertisers talk directly to interested customers, and pay fees to the Pilot Channel based on number of hits.

  • Studios pay a “fee” to air their pilot on The Pilot Channel and receive a reports and data on viewership monthly.
The looped schedule will eliminate the need to agree on time periods. The system is designed to be fair for all studios involved. Competition among studios divides market share, which at this stage, you can no longer afford. Today there are too many viewer options. The larger picture of the future involves a system free of schedules to eliminate this division of market share.

If nothing happens, eventually the system will alter itself. The Big Flood. People will be empowered with options – and with new gadgets enabling them to access and even produce their own entertainment. Computers have already dramatically lowered the cost of film and video production and it will continue to decline. This opens up the flood gates and lets everyone in – and most have no training. It’s up to you, the experts, the studios, to rework your position as filters and to use whatever tools are available to meet the high scale demands of the future. The process needs to be easy, effective, fast, and flawless.


  • The idea is to use information from viewers to allow studios and networks to make the best creative and economic decisions. The Pilot Channel is a tool for you.
  • What do you gain by keeping pilots under wraps? Of course you wouldn’t lay down your cards before the bets are in. But at this stage, haven’t you already negotiated deals with your creators and producers, and invested money in the cost of production?

Exactly. Nielsen will be out of business in 5-10 years. The best strategic move right now, given today’s technology, is not to chase down the audience, but to let the audience come to you. You are the source – you give the audience access, draw them in by delivering good service and good content at good prices, and measure the information that comes to you. Digital technology enables this type of direct communication with your audience. It’s up to the studio to decipher this information at its discretion. Web site servers monitor internet traffic of millions of people daily, and it’s growing. With today’s technology, measuring sources of information is the easy part. Changing the current business model to one that works is the hard part.