Once and again
Big media see ownership of mass-appeal cable networks as key to tapping full value of programming
By Steve McClellan and Joe Schlosser -- Broadcasting & Cable, 7/29/2001 8:00:00 PM
Content is not king; distribution is. That's why the big vertically integrated media companies that control the major broadcast networks are now lining up complementary general-entertainment cable networks. And it's why they sought control of the broadcast networks in the first place.
Disney is the latest to get into the game, agreeing to pay $5.3 billion for Fox Family (see story, page 20). Already at the table: AOL Time Warner, which owns The WB (broadcast), as well as TBS and TNT (cable); News Corp., which owns Fox (broadcast) and FX (cable), and Viacom, which owns CBS and UPN (broadcast), as well as TNN (cable).
NBC doesn't yet have a general-entertainment cable outlet, but getting one is a priority. In the meantime, it can make do with Pax TV, a minor broadcast network in which it has a large ownership stake.
As the leading producers of the nation's TV fare, these companies are all trying to figure out how to wring every last penny of potential profit from their program expenditures. The best way to do that, they believe, is to air those shows as many times and on as many TV and cable outlets as possible. And owning cable services that mirror, to some degree, their mass appeal on broadcast networks guarantees them another "platform" upon which to exhibit those shows.
And sharing programs between co-owned networks—"program repurposing" in the jargon of the industry—will be a key element in the scheduling strategies as these networks go forward.
Repurposing is perhaps the most aggressive form of creating new viewing "windows" for TV shows. And Disney seems to be taking the most aggressive position based on its comments to analysts and reporters last week. Indeed, Disney is already in the repurposing business in a big way with SoapNet, the cable network that rebroadcasts ABC soap operas.
Disney executives said they intend to improve the quality of Fox Family, to be renamed ABC Family, by repurposing Disney shows on the network, including up to 25% of ABC's prime time. It's also likely that Good Morning America and possibly Nightline would be shown on ABC Family, too, as well as shows from The Disney Channel, ESPN and the ABC Saturday- morning line-up.
Program repurposing is an appealing strategy on several levels, executives say. If you can program two time periods (or more) with one show, clearly, you get more bang per production dollar spent. And, if the show works, you should get a revenue boost on both the broadcast and cable networks.
Repurposing is also a form of promotion, its proponents argue. As Disney President Robert Iger puts it: "It's harder to launch new programs and sustain ongoing series. Where content is extended over multiple platforms, it provides greater opportunities for sampling new shows."
ABC already repurposes one prime time show—Once and Again, which is seen on Lifetime several days after its first airing on ABC. The game show, Weakest Link, airs on Pax TV after airing on NBC. And episodes of Law & Order: SVU air first on NBC and later in the wee hours on USA Network. This fall, TNT will air co-owned WB's Charmed in a same-week window, and Fox' FX will repurpose two new Fox shows, 24 and the Warner Bros.-produced Nathan's Choice. And adding a new twist to the repurposing theme, Fox will create different endings for broadcast and cable editions of Nathan's Choice.
Fox was the first broadcast network to put a general-entertainment network on cable, in 1994 when it created FX, which now airs The X-Files, NYPD Blue and other notable Fox-produced shows. "We're obviously moving away from a world of exclusivity to an aggregate world," says Fox Television Entertainment Group Chairman Sandy Grushow. "It really comes down to how many eyeballs are viewing your show."
He agrees that it remains to be seen whether repurposing helps, hurts or has no effect on syndication. His educated guess is, if the repurposed show doesn't work, it will be harder to syndicate. But if the show gets a decent rating in the shared window, "that actually bodes pretty well for the back-end value of the series.
"The truth of the matter is," Grushow continues, "you've got to own a cable network who's ready, willing and able to embrace shows you're producing for your own broadcast network or somebody else's broadcast network, rather than being wholly reliant on the other guys."
AOL Time Warner put the pieces together through acquisition—including Turner Broadcasting's TNT and WTBS basic-cable networks—and the start-up of The WB, which has gained a huge following among young adults and teens in five years.
At AOL Time Warner, the repurposing strategy gained traction earlier this year when The WB was shifted to the Turner network group and WB Chairman Jamie Kellner was tapped to head Turner. "The big opportunity is, if we can start developing programming from WB to TNT and TBS," Kellner said at the time.
Viacom launched UPN at the same time The WB was launched, and last year it acquired CBS. The made-over TNN is Viacom's general-entertainment cable-network play. That's where the CBS series CSI will start its syndication run next year.
Although there are no current plans to repurpose, CBS Television President and CEO Leslie Moonves said, "It's the future" and there is "a certain amount [of programming] that we are going to eventually put on other channels.
"It didn't hurt Law & Order [Special Victims Unit]," Moonves noted, "but did it effect Once and Again? I don't know the answer. It will take a few years to find out. With the economy as it is, we will need that second window in certain cases."
NBC'sLaw & Order: SVU is repurposed at the insistence of the show's producer, USA Studios (under a deal with Dick Wolf). Not that NBC has a problem with repurposing. It's doing some already on Pax TV, which it owns about a third of with an option to buy control. In addition to Weakest Link, it has repurposed movies on Pax. It also tried to put Nightly News on Pax but put that move on hold after affiliates protested.
NBC President and COO Andrew Lack recently told BROADCASTING & CABLE that he wants NBC to build or acquire an entertainment cable network. Also, he said, "I think Pax is going to be very much an opportunity for us to explore the kinds of programming we put on NBC."
Repurposing is a sore subject for network affiliates. They don't like it and are concerned it will reduce viewership to their stations. But both sides have made and will continue to make compromises on the issue. For the past three years, CBS has agreed not to repurpose network programs, in exchange for some help on paying for NFL rights. But that deal is up and this time around, the network plans to extract some repurposing rights. "There will be a balance between repurposing and exclusivity," said a source.
In a similar NFL deal struck two years ago, ABC extracted the right to repurpose up to 25% of its prime time schedule at will. Affiliates got one-year exclusivity on the remaining 75% of the network's prime time schedule.
The ABC deal has another year to run, but Disney's Iger told analysts last week that he wants to start talks "immediately" on a new agreement that would expand ABC's repurposing rights.
And talks with ABC to expand repurposing rights could be contentious, says Frank. "Many of us aren't happy" that ABC has the right to repurpose 25% of prime time, he said. "I think any more than that is a problem."
One way to get ABC affiliates to support ABC Family is to make them profit participants, as they are with SoapNet, Disney's cable network that repurposes ABC soap operas. "We would hope this venture is an opportunity to strengthen the relationship, and we hope they see that same opportunity," said Bruce Baker, chairman of the ABC affiliates board. "They haven't formulated a plan, and, until they do, there's not much to discuss except our optimism."
The problem with the cable cloning strategy is that general-entertainment networks are not particularly good businesses right now, says Sanford Bernstein media analyst Tom Wolzien. "The existing general-purpose networks are under extreme advertising pressure. It really goes against where it seems the business is going. On the other hand, to the extent you can do it cheaply and you keep your costs in line with what the revenue is, it's probably beneficial."
Clearly, producers and other profit participants are going to have a say in how and when programs are repurposed. 20th Century Fox Television President Gary Newman says he's willing to work with all networks on repurposing shows his company produces for them "but not if the benefits are not shared in a pretty significant way."
|Mega-media's take two|
|Parent company||Broadcast network(s)||Mass-appeal cable network(s)||Repurposed shows*|
|* Includes shows that executives say may get dual-run.
** NBC owns just under 33% of Pax.
*** And up to 25% of ABC prime timeprogramming.
|AOL Time Warner||The WB||TBS/TNT||Charmed|
|Disney||ABC||ABC Family||Good Morning America***|
|NBC||NBC, Pax**||Weakest Link, Crossing Jordan|
|News Corp.||Fox||FX||24, Nathan's Choice|
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