I get asked a lot why Syfy doesn’t make our shows available online internationally, and why we don’t make more shows in the U.S. available. Usually I say “rights issues” because the real answer involves a longer discussion of how the TV industry works. As part of a larger peek behind the scenes of the TV industry I’m doing for BoingBoing, I’ll give you the longer version:

First you need to know that TV networks don’t own
shows, we license them. The license lets us air the show in our
territory for a certain number of years, spells out how many
times per year we’re allowed to run it, and how/if we’re able
to use it in other media. We license shows from TV studios that
produce lots of series and hope to make money by licensing them
in turn to lots of people. So, say a producer called BOING CO.
makes an hour-long drama called BOING SHOW, and Syfy wants to
license it. Because the U.S. has one of the bigger viewing
populations out there, Syfy will probably pay a larger
licensing fee than anyone else. Let’s assume BOING SHOW costs
$2 million per episode to produce, and Syfy’s licensing fee for
the U.S. is 50% of that, or $1 million. Included in that fee is
the right for us to stream the show in U.S., since we’re a U.S.
based network. BOING CO. needs to make another $1 million in
licensing fees just to break even, so they shop BOING SHOW to
other countries. In the U.K., the BBC wants to license the
show. Since they have a smaller audience than Syfy, their
licensing fee is smaller, let’s say $250,000. For that fee the
BBC wants the rights to stream the show in the U.K., so that’s
part of the deal. BOING CO. will go out and repeat this process
in as many territories as it can, trying to recoup the $2
million it’s spending on each episode. Two particularly
interesting things usually happen in the TV business model at
this point. 1) More often than not, producers DON’T MAKE ENOUGH
MONEY TO COVER THEIR COSTS in this first round of sales, so
they end up producing every episode of the show at a loss. 2)
The show has not been sold in all territories, so there are
some places you can’t see it. Since one of the original
questions I got about this on Twitter came from a viewer in
Norway, let’s say that BOING SHOW is not available in Norway
right now. If BOING SHOW doesn’t catch on and gets canceled
quickly, BOING CO. will never recoup its money on the series.
There’s also a pretty good chance that a network in Norway will
never buy BOING SHOW later on, since it’s not a hit. Sadly, the
fate of most TV shows is to get canceled, lose money and never
be seen in Norway. BOING CO. can afford to make a few duds
because when they eventually make a hit show that runs for many
seasons, they’ll make a lot of money from it. Enough to cover
the cost of the successful shows and the duds, and make money
on top of that. Okay, now I can get back to the original
question: Why can’t Syfy make shows available online in other
countries? In the case of BOING SHOW, Syfy only has the right
to air and stream it in the U.S. Legally we CAN’T stream it in
other countries. Just like we have the right to stream it in
the U.S., the BBC has the right to stream it in the U.K, etc.
We don’t want the BBC to stream shows we license in our
territory, and vice versa. What about Norway, where no one
bought the show? Surely it would be easy for Syfy to buy the
online rights at a pittance and make millions (of pennies)
streaming BOING SHOW there, right? No, and no. First, BOING CO.
isn’t going to sell just the online rights to the series
because it will hurt their chance to sell the TV rights later
on. If BOING SHOW suddenly turned into a hit, found a new
audience via DVD in another country, or a new TV network
started up in Norway that wanted it, BOING CO. can still make a
lot of money from it. But if Norway viewers had already seen
BOING SHOW online from someone who came in and paid a pittance
for just the online rights, that’s going to make it harder for
BOING CO to sell it there at TV prices. And anyone who buys it
is going to want the online rights too, and if they can’t get
them, that could kill the deal. I’ve seen both of these things
actually happen, including one massive TV deal that involved
multi-year licenses and tens of millions of dollars that died
because of online rights problems. Even if Syfy could buy just
the online rights in other territories, we’d have no way to
make our money back, since we do that through ad sales. As you
can imagine we don’t have much of an ad sales force in Norway,
and not many U.S. advertisers are interested in having their
ads seen in Norway. Okay, forget international, why don’t we
make more shows available online in the U.S.? Here you need to
know that Syfy gets paid for our content by the cable operators
who carry our channel. A very small part of your cable bill
goes to us if you have Syfy on your lineup. Cable is a regional
business, so they’re paying to show our content in the areas
that they serve. They don’t want us giving away that content
for free on the Internet in those same areas, which makes
sense. We can choose not to sell our channel to them and put
our content online, but (for now) there is no way to recoup our
expenses with online only distribution. The cable providers and
cable networks have mutually agreed that putting SOME content
online is a good idea so people can easily catch up if they
miss shows, or can sample shows that they haven’t tried. But
not so much content that it hurts the main business of showing
TV on, you know TV. Usually that means the last 5 episodes of a
currently airing show. We’ve tried more, and we’ve tried less,
and I’m sure we’ll try more variations in the future. As with
any untested model, we try things, and if they work well we do
more of them, and if they work not so well we do less of them.
Someone will probably find a way to make real money streaming
online soon, and then the business model will shift (again) and
you’ll see more episodes of TV online. Until that happens, this
is why you don’t see more shows online. If you’ve got
questions for me about Syfy or the TV industry, come ask me on
Twitter using @Syfy