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Television Networks Finding Ways To Cut Corners

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I've blogged extensively about how the industry-wide decline in advertising is hitting TV networks. Now we're in November sweeps and the networks are developing scripts for next year and we're starting to see TV networks find ways to cut back. I expect to hear about layoffs after the first of the year, but for now it's cuts in areas other than personnel.

One place we're seeing cuts is development costs: expect the networks to buy fewer scripts and make safer bets. We're now towards the end of the window where networks buy scripts for the following fall, which usually starts in the summer and goes until November. Now there's no longer a strict fall TV season, with many of the networks including CNBC's parent NBC shifting to a 65 or 52 week schedule.

So that means there's less pressure on buying scripts during this traditional development period, as the nets move to spread out costs and decision-making over the course of the year. And since it's easier and far less risky, they're sticking with proven concepts (cop drama, etc) rather than taking huge risks. The CW network recently confirmed that it's developing a remake of the popular "Melrose Place" series. A natural fit considering the success of this season's remake of "Beverly Hills 90210." They both offer instant name recognition and the ability to reach a broad audience; the older fans of the original show plus a new generation.

Another source for savings: production costs. NBC Universal said this week it's saving $1 million an episode by shooting "The Philanthropist", which will air next year on NBC, in London rather than Los Angeles. Considering the exchange rate, I'm surprised, but it's being produced by London-based production house "Carnival," which NBC acquired in August.

This year not only are the nets under more pressure from their media conglomerate parent companies (DIS, CBS, NWS, GE ) to be fiscally responsible, but they also face the shift of ad dollars from the tube to the web. To hold on to some of those ad dollars, and to reassure marketers concerned their messages will be TiVoed through, expect more product placement and show sponsorship. Somehow everything goes full circle: it's back to the sponsorship strategy of television in the 1950s.

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  • Working from Los Angeles, Boorstin is CNBC's media and entertainment reporter and editor of CNBC.com's Media Money section.