Does it seem like every time you turn on the TV you see the same movie playing?
It's not your imagination. A new study by IHS Technology is reporting that while the quantity of movie content on U.S. basic cable hit a three-year high last year, fewer unique movies were broadcast in 2013 than in the previous three years. (For a fun challenge, try to guess the top 10 most-played movies. Answers to follow.) In other words, the cable networks are sticking with reliable classics -- but for a few different reasons.
Showing movies as lead-ins for a network's original programming, or during weekends as part of a theme marathon, is nothing new. It's a time-tested model that works for both sides. They boost ratings for the network, and the lucrative deals behind them help studios offset a movie's production budget and achieve greater profitability.
The study from the El Segundo, Calif.-based company showed that Twenty-First Century Fox (NASDAQ:FOXA) led all other studios with nearly 90,000 hours of movie content being shown on cable last year. The report also speculates that total airtime is projected to be even higher this year and will represent an increase in both movie hours and share of airtime on TV. Movie consumption on basic cable is growing and logging more hours than ever before.
It's not just Fox utilizing this trend. Warner Brothers, a subsidiary of Time Warner (NYSE:TWX), also was identified as a significant player in this market. Both have movie channels on basic cable, including Fox Movie Channel and Turner Classic Movies, but they also have content channels such as FX, TNT, and TBS that supplement their original programs and acquired series with films.
It's no surprise FX plays a big role in this practice -- the network seems to be the leader in locking up the TV rights to major motion pictures. Just look at 2013 when the channel picked up a slew of films, including blockbusters Man of Steel, Fast & Furious 6, World War Z, Despicable Me 2, and The Heat all before the summer was over. At the time of the deal FX CEO John Landgraf was quoted as saying he expected 21 movie premieres on the FX spinoff network FXX in 2014, which is a massive number.
Rules & restrictions
The study also goes into detail about the type of content that is more valuable. Titles from 2000 onwards are considered prime time, but that comes with a cost. The movies in that group are more expensive and are saddled with restrictions, including a lengthy wait time until a network can first air them.
Remember the standard life cycle for a movie is theaters, home entertainment (VOD/DVD/Blu-Ray/streaming), premium channels (HBO/Showtime/Starz), and then basic cable. Independent films often carry a different set of rules and the report found 78% of movies being aired in 2013 were from those studios.
Cable networks also tend to rely on classics from the '80s and '90s, as those films have looser restrictions and carry a built-in audience. In fact, six of the top 10 most shown moves on TV last year came from the 1990s including the most watched: 1993's Mrs. Doubtfire (which not coincidentally was distributed by Fox).
The full list, along with the number of times it ran on cable TV last year:
1. Mrs. Doubtfire (1993): 66
2. She's All That (1999): 59
3. Juno (2007): 53
4. Austin Powers in Goldmember (2002): 51
5. Ice Age (2002): 49
6. There's Something About Mary (1998): 47
7. Sleepless in Seattle (1993): 46
8. A Few Good Men (1992): 44
9. The Shawshank Redemption (1994): 44
10. Catwoman (2004): 44
Personally, I don't get Catwoman, but the rest of the names look right. Every time I see A Few Good Men or The Shawshank Redemption on TV, I get sucked in for at least 15 minutes.
With that in mind, this growing trend of intense focus on a few good films provides the rare win-win-win scenario: for networks (which capture viewers who can't flip away before they learn if Tom Hanks and Meg Ryan get together), for studios (which get funding to make new "new classics" ... or at least we can hope), and for viewers (who can take heart knowing Freddie Prinze, Jr. is never far away).
Your cable company is scared, but you can get rich
Even with weekly airings of Mrs. Doubtfire, you know cable's going away. But do you know how to profit? There's $2.2 trillion out there to be had. Currently, cable grabs a big piece of it. That won't last. And when cable falters, three companies are poised to benefit. Click here for their names. Hint: They're not Netflix, Google, and Apple.
Brett Gold has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.