Between shrinking budgets, the rise of the cable networks, digital streaming, the collapse of the syndication market, the aftershocks of the WGA strike and the prevalence of DVRs, the state of the TV union is shaky... or on the cusp of something much greater, depending on who you ask. Such was the mood at day one of NATPE's LATV Fest on Wednesday as television's front line soldiers - the producers, both professional and aspiring - got together to talk about the pressing issues of the industry.

"It's absolute war, it's armed combat," says The Gurin Company's Phil Gurin ("The Weakest Link") about the relationship between producers and the networks. "You used to be able to easily count on other revenue streams to get a license fee, when you're selling your show around the world. And now networks are so savvy about that." Gurin, like many reality show producers, leans on the international marketplace to help finance his shows in the current marketplace.

Paul Buccieri, CEO of ITV Studios ("Hell's Kitchen"), explains: "We can say come in now, be with us now, get in on the inception of this show. We'll produce it for you simultaneously in the U.S. and the U.K. at a centralized location and we'll try to jump on the different productions." The most recent example: Endemol's "Wipeout," which uses the same Argentina set for all its non-U.S. incarnations. Said arrangement helps both parties: networks around the world get a big-budget reality show on the cheap and the producers get multiple streams of revenue, increasing their bottom line.

Scripted television however is more problematic. "When I started [in the TV movie business]... you had about 250 movies [each year]," Orly Adelson of dick clark productions says. "Now I would say they make a year about 60 movies. So from 300 to 60 movies and out of the 60, at least 30 of them are budgets of $2 million. That's a big shift."

Deborah Spera, who runs the highly-successful The Mark Gordon Company, adds that even the biggest hits on television are vulnerable to the same issues. "'Grey's Anatomy' is run by Betsy Beers and Shona Rhimes and they oversee the economic of status of that show. I know that they've done an outstanding job [but] they too have had to adjust to the new economic climate. I know on 'Criminal Minds'... we've had to take a budget cut this year across the board. I think even the most successful shows have had to look at budget cuts and how [to] continue to maintain the quality of the product without losing the quality of the product."

So how are producers addressing the issue? Kirk Schenck of RDF Media USA ("Wife Swap") warns not to necessarily trim the number of sets or roll back the action. "That's sort of a double-edged sword because when you're talking to international distributors, they'll tell you the more dialogue, the more you have people talking in a room without action and without some sort of sex appeal - the less international money they get."

Paul suggests the answers are much more subtle, pointing to the development of such technologies as the "Red" camera. "It's a highly specialized camera, only about [12.02" long x 6.34" tall x 5.2" wide]," he notes. "They're shooting a lot of movies [such as "Public Enemies" and "Angels & Demons"] on it. This camera that costs very, very little money, you cut put very expensive lenses on it and you can use it [to make] high quality productions."

Orly says it's just about being smarter with your time. When her company pitched its "George Strait: ACM Artist of the Decade All Star Concert" special to CBS, "They said, 'Great, but we don't have enough money.' So what we did is, we figured out, when we do the Country Music Awards, keep them one more day, figure out a set that could transform itself in five hours... and book some new entertainers for the second night." Sure enough, it cut costs enough to get CBS to sign on.

Phil even suggests forgoing U.S. networks from the start. "We have about six pilots that we're shooting right now around the world in different countries. None of those shows have been sold here yet," he explains. "I had to create a relationship with each territory, each production company as a way to get the tape. I had no choice but to give something away to get that."

Another area to shore up is your relationship with the network itself, Paul also suggests. "On 'Hell's Kitchen' for example, we have 67 cameras. That's a lot of footage coming in that you have to cut, which is a lot of time, which is a lot of money. We have to be really in sync with our partner, the network, the executive [there] to streamline things. There are some network executives that, and [FOX's] Mike Darnell is an example, that [are] so specific, so clear with what he wants that there's no room for interpretation." Kirk adds that, when editing/post teams cost about $40,000-50,000 a week, you don't want to be constantly recutting things as you figure out what that vision is. The reverse is true as well: sometimes the networks don't have a clear vision on their end, forcing you to dip into the well multiple times as they come to a consensus.

What then is happening on the network side to cause all these budget cuts? Kirk offers his thesis: "One, just a general lack of audience. The audience has scattered which is forcing the networks to get less and less aggregation so they have less money coming [in] to produce any one show. Also I think the eyeballs are going elsewhere and so the advertisers are sort of following the eyeballs, they're investing less money into the production of television shows."

We'll wade deeper into that end when our coverage continues tomorrow so stay tuned!