Ben Gilbert: evaluation

Transcript context

…They're an independent business, so to fill a lot of those hours, they'd work with these indicators like King World to bring in syndicated shows. All this is happening outside of ABC, NBC, and CBS. They don't really care what their affiliates are doing during the rest of the non-primetime hours. All that business is separate. The interesting thing about these syndicators, too, that I didn't really realize is since they're getting to participate in the upside of the success, at least the way all their deals tend to start or at least at this time tended to start was either in a rev share or a profit-sharing deal. They would come to you, they would say right now you're only getting to address Baltimore, we think you could play in these 17 markets, we're going to take some cut. I think the cuts vary wildly so I can't describe the prototypical deal. We're going to take some cut of the ad dollars that come in from whatever those TV networks in Houston, Phoenix, and Cleveland are able to generate, and then we're going to give the rest to you. For a station who owns the rights to a show, you're like great, it's all upside. Anything additional you can get is new marginal revenue, it doesn't cost me anything. Take whatever percentage you feel you need. Of course, it's not that cordial, but you can see why there's this revenue share or profit share agreements that get worked out to do that. Being a syndicator, if you get a hit, can be enormously lucrative. Ben, you may know the detailed economics of these types of arrangements better than me, but I think it's inspired by and very similar to the book publishing industry, another industry we're going to bring up in a minute, where the author writes a book that's a fixed cost investment on the part of the author. In this case, it's local TV station produces a show, produces the content, and that's a fixed cost investment. Then, you work with a publisher to distribute that around the country or the world. Then, you share some portion of the revenue from that.…

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