Introduction
For many of our favorite shows such as “Modern Family,” “The Middle,” and “Marvel’s Agents of S.H.I.E.L.D. there are many people behind the scenes making what was once an idea your entertainment at the prime-time hours of the week. Whether you’re watching them the classic way on a TV or now streaming them, at some point all of those shows were in their production phases and without ABC TV Studios to helm that phase you wouldn’t have the hilarious comedies or the serious dramas you do today.
Overview
Headquartered in Burbank, California ABC TV Studios, formerly Touchstone Television, is the production arm of the ABC Entertainment Group, all part of Disney. Founded by then Disney CEO Ron Miller in 1985 as a film company to produce more mature themed content not suitable under the Disney banner (Harmetz, 1984). Since then it has been rebranded as ABC TV Studios as of 2007, although some material is still released under the Touchstone Productions name (Andreeva 2007).
Today, Patrick Moran is the President of ABC Studios, overseeing all of the production aspects. For the upcoming 2017-18 season ABC will have 21 current shows including dramas such as “Grey’s Anatomy,” “Once Upon a Time,” and “Scandal,” comedies like “Modern Family” and “Blackish,” and talk shows such as “Jimmy Kimmel Live!” (DisneyABCPress).
Revenue Model
ABC generates the majority of its revenue via the sale of advertising time slots. On top of this ABC produces it own content for which it sells to third parties such as Netflix. About 85% of ABC’s tv material is produced in house and this allows an increase in revenue because it can then sell this content to others. In 2Q15 ABC had taken in $1.8 billion which was a 19% rise from its revenues the previous year. Sales of content such as Marvel’s “Daredevil” to Netflix where major contributors to this increase. The goal is to utilise its vast intellectual property from areas such as Marvel to continue this growth, which we see as their launch of the new ABC show Marvel’s “Inhumans” and the current Marvel Netflix series’ like “Luke Cage” (Pelts, 2015).
Following those ventures ABC taking an unexpected turn and that is in the world of its family centered comedies like “Blackish.” Reason being that ABC had 6 of the top 10 broadcast TV sitcoms so to not take this step would seem irresponsible. Each of the shows has a unique aspect that separates them from the other but also the unifying family centered dynamics, and workplace settings that hold them together as ABC shows (Littleton, 2017).
The goal though is to make money and at the moment “Modern Family” is their priciest show at $236,296 as of 2015. In perspective if you had 5 commercials for one commercial break on “Modern Family” you are taking in $1,181,480. That’s for one commercial break, there are typically 5 breaks per half hour, you can do the math selling ad slots on primetime television is lucrative (Steinberg 2015). 
Even with revenues as high as they are there are always costs. For ABC TV Studios, the larger costs are amortization of programming, production costs, technical support, distribution, and operating labor. Each of these costs is a major factor in ensuring the programming created gets to the viewers. On top of this ABC TV Studios doesn’t stand by itself but is part of the larger Disney machine and each aspect of the conglomerate synergizes so that if one-piece lags for a period the other parts can take up the slack. Much to reason why ABC could still run programs that may hit a ratings slump at some point in their run instead of outright cancellation (Miglani, 2016).
Threats
Shonda Rhimes was a big content creator for ABC TV Studios but now she has recently signed a deal with Netflix. Her reasoning, “I’m thrilled by the idea of a world where I’m not caught in the necessary grind of network Television.” This spells a danger for ABC and the other major networks because more power is shifting to the creatives allotting them the ability to have greater control over what they create and where they distribute it to. Netflix is a different market where content creators have more freedom to produce what they want whereas on broadcast TV you have regulations in place, advertisers to appease, and length restrictions. How does this greatly affect networks? Through advertising because now network TV does not hold all the money. If content creators begin to control more of their material the advertisers could be inspired to do this too. Advertisers are struggling because the media world today is shifting and if they begin to shift with it then by in part networks who rely heavily on ad dollars have to shift (Sullivan, 2017).
Conclusion
ABC’s biggest aspect going for it is Disney, because there is a wonderful amount of content that takes little to access. For example, all of the upcoming Marvel spin off series see no end any time soon. But ABC should not remain blind to the Shonda’s departure, but see it as a need to prepare for the ever-changing world and if any company has resiliency its ABC TV Studios.
Sources
Andreeva, N. (2007, February 09). Touchstone TV now ABC TV Studio. Retrieved September 13, 2017, from http://www.hollywoodreporter.com/news/touchstone-tv-abc-tv-studio-129842
Harmetz, A. (1984, February 15). TOUCHSTONE LABEL TO REPLACE DISNEY NAME ON SOME FILMS. Retrieved September 13, 2017, from http://www.nytimes.com/1984/02/16/movies/touchstone-label-to-replace-disney-name-on-some-films.html
Littleton, C. (2017, August 06). No Cynicism Allowed: ABC Banks on Family Comedies With Multigenerational Appeal. Retrieved September 13, 2017, from http://variety.com/2017/tv/news/blackish-modern-family-the-middle-comedy-tca-1202517118/
Miglani, J. (2016, March 03). How Disney Makes Money? Understanding Disney Business Model Core Elements. Retrieved September 13, 2017, from https://revenuesandprofits.com/how-disney-makes-money-understanding-disney-business-model/
Shirley Pelts | Jul 24, 2015 4:56 pm EDT. (n.d.). The ABCs of Disney’s ABC Television Network. Retrieved September 13, 2017, from http://marketrealist.com/2015/07/abcs-disneys-abc-television-network/
Steinberg, B. (2015, September 29). TV Ad Prices: Football, ‘Empire,’ ‘Walking Dead,’ ‘Big Bang Theory’ Top The List. Retrieved September 13, 2017, from http://variety.com/2015/tv/news/tv-advertising-prices-football-empire-walking-dead-big-bang-theory-1201603800/
Sullivan, T. (2017, September 07) One giant leap for Shonda Rhimes is a small step for ad-kind. Retrieved September 13, 2017, from http://www.campaignlive.com/article/one-giant-leap-shonda-rhimes-small-step-ad-kind/1443922
(n.d.). Retrieved September 13, 2017, from http://www.disneyabcpress.com/abc/abc-executives/