May 18 (Bloomberg) -- In the world of television, canceled doesn’t mean what it used to.
The four major U.S. networks this week unveiled 31 new shows for 2012-2013, meaning at least that many won’t be back. Some, like CBS’s “A Gifted Man,” failed to win viewers. Others, like ABC’s “Desperate Housewives,” ran their course.
A few, like “Pan Am,” may live on, thanks to new outlets for original programming. Netflix Inc. and DirecTV offer studios a chance to keep shows going, said Tony Wible, an analyst with Janney Montgomery Scott LLC in Philadelphia. With detailed data on viewing, they can better tell which programs can survive on smaller budgets with fewer, dedicated fans.
“Digital can provide a way to recycle shows that have been canceled, because there’s a lot more pressure on those platforms to go toward original content,” Wible said in an interview. “Whether or not you invest in a new show or one that’s been canceled is a function of cost and data.”
Sony Pictures Television, producer of the canceled airline drama “Pan Am” that aired on Walt Disney Co.’s ABC network has held talks with distributors to keep the show going, two people with knowledge of the matter said.
Netflix has better data “than anyone” to determine whether a show may succeed online, Wible said. When the Los Gatos, California-based company ordered a new season of “Arrested Development” in November, it knew how popular past seasons were with its 26 million streaming subscribers.
“One of the reasons we were so excited about coming to Netflix is that’s certainly where this show has grown, and that’s where our fans are,” Mitch Hurwitz, the show’s creator, said at a broadcasters’ convention last month in Las Vegas.
Netflix is talking with CBS Corp. about resurrecting the drama “Jericho,” according to two people with knowledge of the discussions who weren’t authorized to speak publicly.
Generally, the network is “always willing to talk with Netflix if they’re interested in one of our shows,” Kelly Kahl, CBS’s chief scheduler, said in an interview.
Netflix also discussed with News Corp.’s Fox ordering more episodes of “Terra Nova,” though an agreement wasn’t reached, according to a person with knowledge of the discussions who also couldn’t discuss the matter publicly.
Cable networks have become another potential last stop for shows on the verge. “Cougar Town,” starring Courtney Cox, is moving to Time Warner Inc.’s TBS for the 2013 season from ABC. NBC’s “Southland” was canceled in 2009 before finding a home on Time Warner’s TNT, where it still airs.
Netflix, DirecTV and cable competitors benefit by picking up canceled shows because they already have been heavily marketed and come with a built-in audience, Kahl said.
Joris Evers, a Netflix spokesman, declined to comment.
DirecTV, the largest U.S. satellite-TV service, has extended the life of “Damages,” a legal drama starring Glenn Close that originally aired on News Corp.’s FX, by scheduling the program commercial-free on its Audience Network, ordering a total of 20 new episodes. It did the same with the football drama “Friday Night Lights,” which ran on Comcast Corp.’s NBC and then for three seasons on DirecTV with 39 new episodes.
Both shows had received critical acclaim, making them attractive, said Derek Chang, DirecTV’s executive vice president of content strategy and development. The company saved money by negotiating for lower production budgets and sharing costs with the producers and distributors, he said.
DirecTV has no plans to pick up any of this year’s canceled shows after looking at “a couple,” Chang said. The El Segundo, California-based company is far more likely to revive a canceled drama than a sitcom to fit with its premium brand, he said.
“We’ll pick up shows that go to our fan base, which is predominantly 35 and over,” Chang said. “We’re trying to complement a DirecTV brand. If a show has an excellent cast and writing, it can be a good fit.”
A potential buyer such as Hulu LLC offers studios another incentive to keep their series alive. While Netflix and DirecTV offer programs commercial-free, shows offered by Los Angeles-based Hulu are ad-supported.
Industrywide, ad revenue for online video is up 22 percent to $2.3 billion this year in the U.S., Brian Wieser, an analyst at Pivotal Research Group in New York, wrote in an April 16 report.
Meredith Kendall, a spokeswoman for Los Angeles-based Hulu, declined to comment.
Executives at Apple Inc., Google Inc. and Yahoo Inc. also may be studying cancellations as more advertising dollars move toward streaming video, Wible said. Shows are dropped for a reason, and most network programs come with budgets that make it difficult to be profitable without ad support. Ten hour-long episodes can cost about $30 million, Wible said.
In 2009, Google’s YouTube ran all five episodes of “The Beautiful Life,” which moved to the online service after two episodes aired on the CW. Chris Dale, a YouTube spokesman, declined to comment on any plans for canceled shows.
Tom Neumayr, an Apple spokesman, didn’t return a call seeking comment. Dana Lengkeek, with Yahoo, also didn’t respond to a call.
Producers of canceled shows shouldn’t hold out too much hope that additional new buyers will come knocking.
“The problem, if you’re a Google or a Yahoo, is you don’t have Netflix’s rich data to know the true interest of a show,” Wible said. “Nielsen only gives you a snapshot, and obviously the show was canceled because of that. You’d need another data point that proves the show is going to pay for itself.”
To contact the editor responsible for this story: Anthony Palazzo at firstname.lastname@example.org