Outlook Grim, Say Indie Studios

The FCC's decision last week to loosen media-ownership rules could mean the death of the independent producer, argue the Coalition for Program Diversity, the Directors Guild of America, and the Caucus for Television Producers, Writers and Directors.

The Coalition for Program Diversity—an umbrella group that includes Wolf Films, Sony, Carsey-Werner-Mandabach, the Directors Guild of America, the Screen Actors Guild and AFTRA—had been pushing the FCC to adopt a rule that would require the four major broadcast networks to purchase 25% of their prime time fare from independent producers, which would include any studio or production company not affiliated with a major network.

But the FCC failed to address the coalition's request last week, and coalition leaders say that likely will mean the end of their push. They don't have the votes at the current commission to get their rule approved, they say, and it is unlikely the commission will be led by favorable Democrats before 2008 unless the economy or the international political climate becomes much more unstable between now and the 2004 presidential election.

"The true independent producer is an endangered species, and it's just going to get worse with today's vote," said Mickey Gardner, the coalition's Washington attorney.

"Ultimately, the money really comes from ownership and distribution rights," said Kathy Garmezy, spokeswoman for the Directors Guild of America. "It's the ownership of the copyright that the networks want and need because that's where the studios make their money. If the independent producers don't have some copyright control, they don't have the power."

The coalition considers large companies like Sony, Universal and Warner Bros. "independent producers" because none of them is affiliated with a major broadcast network. The coalition defines a major network as one that is delivered over-the-air, covers 95% or more of U.S. households and earns a household rating of greater than 4.0. One entertainment attorney suggested that, in five years, such major producers as Sony, Universal and Carsey-Werner-Mandabach will be out of the prime time producing business because the networks will shut out any studio with whom they are not affiliated.

In the upcoming broadcast season, ABC and NBC would comply with the coalition's proposed rule: nearly 29% of ABC's schedule will come from independent producers, 42% of NBC's. CBS has an ownership stake in nearly all of its programming, 98%, and Fox has an interest in 80% of next year's prime time schedule. If a network buys programming from another network-affiliated studio—CBS from Twentieth Century Fox, for example—that would not count as independently produced, according to the coalition.

Although some independent producers believe that the FCC votes are aligned so strongly against them that further fight is futile, blood is running hot enough in Hollywood that a continued debate on the issue is guaranteed.

"The deregulation procedure was a fiasco," says Chuck Fries, chairman of the Caucus for Television Producers, Writers and Directors. "We will continue to oppose media concentration and pursue the improvement of diversity and quality of television as well as aid the plight of the true independent producer. We feel there is a tremendous amount of support on Capitol Hill on both sides of the aisle to write appropriate legislation."