Court TV gains appeal7/16/2000 08:00:00 PM Eastern
Few networks have had as tumultuous a recent past as Court TV, and few have made turnarounds as dramatic as the basic cable network founded by Steven Brill in 1991.
Court TV made its mark-almost reluctantly-during the O.J. Simpson trial but suffered a can-you-top-this letdown afterward.
Its original corporate owners-Time Warner Entertainment, Liberty Media and NBC-prepared the network for auction in late 1997, and Brill himself tried to buy it outright. At the time, its third-quarter prime time household rating was an immovable 0.1.
That was where Court TV stood a year later, when Time Warner and Liberty bought out NBC and named Henry Schleiff chairman and chief executive officer. As a lawyer, former producer and executive vice president for Studios USA, Schleiff (as in "life'') couldn't have had a more fitting background.
Today, coming from low Nielsens and stagnant distribution, Court TV calls itself "the fastest-growing cable service in the country." It averaged a 0.6 Nielsen household rating in its universe for the first two quarters of 2000 and expects 50 million subscribers by year-end.
Gains have come as Court TV has gone from dwelling on courtroom trials to turning its prime time focus to crime dramas, led by off-net reruns of "Homicide: Life on the Street" and "Cops."
Increasingly, Court TV has added original programs including documentary series "Crime Stories," regular reality-based series "Inside Cellblock F," "Mugshots, Pros & Cons With Nancy Grace," and "Hollywood & Crime"-and has announced plans to spend $120 million on programming over the next two years.
Last week, Court TV announced that it had acquired off-net rights to former NBC drama "Profiler" and will couple it with a new reality-based series, "Forensic Files." This fall, the network will also premiere "The Wrong Man," a reality- and crime-based miniseries; "Brooklyn North Homicide"; and "The Greatest Crime Story Never Told," a documentary about mass murderers.
Recently Broadcasting & Cable Executive Editor P.J. Bednarski sat with Schleiff. An edited transcript follows:
A lot has happened since you came to Court TV. What was it like when you started?
When I first walked in here in October of 1998, the good news was that we were 30 [million], 31 million subs. The bad news was that we were going south. We got two really tough letters-one from Cox and then almost immediately thereafter from Media One, the latter certainly indicating that there was the intention to drop us.
Media One was important to us because New England was always particularly attractive to Court TV. And it wasn't a bad decision at the time because I don't think we were offering either operator much in terms of information or entertainment.
But we had just started to get the commitment from Time Warner and Liberty to make Court TV grow, and at that point, within a month they decided to buy out NBC and Cablevision and decided to streamline the ownership to really get behind the network.
That was around the time Steve Brill was trying to buy Court TV.
Brill was trying to buy it. Tom Rogers was trying to buy it. I think the night watchman was trying to buy it. Finally, just before I came in, in August/September of 1998, Time Warner and Liberty said, "Listen, let's try to take advantage of an analog-distributed network with some brand recognition, and let's see if we can make this dog hunt."
The payoff was in the ultimate decision by Cox and Media One nine months later to relaunch us, just around CTAM in 1999. In fairness, like I said, I think they made the right decision to drop us and the right decision to relaunch us.
Now you project that you'll be to 50 million subs by the end of the year. It would seem getting beyond that is fairly difficult.
As you get closer to 50 [million], 60 [million], 70 million, each one of those subscribers [becomes difficult to get], given the competition, new networks and exogenous influences, which may be as esoteric as retransmission consents or packaging, among others, where the merits of the service may not be the singular criterion.
But cable operators are smart. Without being Pollyannaish, they do what serves their interest, not only from a corporate standpoint but from the community. They're interested in growing their penetration. They have a number of competitors starting with DISH and a variety of other alternatives.
If a network is intrinsically different, important and entertaining, has a clear brand-all of which I think are hallmarks of Court TV-I think that growth barrier is always going to be difficult but fair.
But I'll tell you, look at the past year, growing 10 million subs in the face of some of these other influences..I guess I am, as they say in the old terminology, cautiously optimistic of getting 60 million next year.
Court TV is not much today like it was when Brill was here. Talk about the transition from Brill to you.
I was brought in with the intention that I would be the person to step in for Brill and take it in a different direction. He's obviously-I don't know if controversial is the right word-but he's a person that people have a variety of different passions about.
I will say this in fairness to Brill. He should get credit for two attributes that are part of his legacy at Court TV. One is that he had an idea, and he executed it. A lot of people walk around with the concept for the greatest book of all time, and it never happens. He had a concept about a network that would cover law and justice in a particular fashion, and he created it. He deserves credit for that.
And more, almost more than that, our progress to date is a reflection of a combination of factors, but one is the legacy Brill left of hiring great people. He brought into this place a number of talented, smart, dedicated people. He brought in, I think, a fair number of journalists, of people interested in the purely informational aspects of Court TV, what we were doing during our daytime trial coverage.
When you clear all the smoke, yes, I had a different vision for Court TV, but yes, I thought it could be both, information and entertaining, but I thought there was a component missing in prime time, a very important piece of the action.
More action in a sense?
I thought it was too narrow, the way he envisioned it. I thought, in fairness, he wasn't being more inclusive of different forms of coverage of the crime and justice system, whether it's a dramatic one-hour like a Homicide or a magazine show like Dateline, with which Court TV has an exclusive contract with NBC. People, I think, are enamored of this area. Not to mention we were reality TV before reality TV was cool.
I was going to say you must have been thinking that these days.
Absolutely, and I don't think he was taking advantage of that. So that's where our focus has been, and it remains, to build on the foundation of live trial coverage and what we do during the day.and to pepper it with some new aspects-whether it's Catherine Crier's show or what Nancy Grace is doing with Pros and Cons or some of our new anchors or commentators, whether it's an Alan Dershowitz or an Anita Hill or other new faces that will be coming in the fall.
To take that foundation and build it with compelling real-life drama or close to it, like Homicide. We're announcing next week that Homicide is going to be joined by Profiler, which I think is like it in an interesting way: Saturday night, low [households using television], other factors. It never got its due sampling [at NBC]. It certainly has a very passionate cult, just like Homicide. Homicide won an Emmy for best drama series but never got watched.
Is there a defining Court TV program?
Yeah. Right now, it's our original programming we do at 10: Crime Stories. We're looking at some time changes for the fall, either keep it on at the same time or combine it with stuff we do earlier in the evening.
We really do use the more recognized off-network series to bring in an audience, to shine a klieg light, if you will, on that which defines the network. We never want to be "TVLand for Lawyers."
You have a great ratings story to tell, for the past several quarters. But now you have to top yourself. Growth probably gets slower, I guess; ratings get slower, right? So what do you do?
The truth is, the story of Court TV in the last year and a half is about progress. It's not, in fairness, really about success. We're very honest with ourselves.
So you have progressed but not necessarily succeeded.
Exactly. We have succeeded in attaining some of our goals. But we have new goals. It's very important that we be very clear to ourselves and our constituents, that we never confuse progress with success. What I am most proud of is that we have achieved the kind of requisite momentum, and that's what this is all about. That's what I think the quote-unquote cable operator community, the advertising community, really look at.
Quite honestly, when you see our 0.6 two quarters in a row, we led the league two quarters in a row. I want to see that go to a 0.8, which we touched in March, but I want to see a 0.9, a 1.
But, in absolute numbers of subs, assuming we continue our subscribers, the incremental growth from a 0.6 to a 0.7 to a 0.9 is not all that great. Let's be honest.
We have a fairly aggressive five-year plan, and we're blowing past our benchmarks. We are, by the end of this year, the year 2000, we are exactly where we expected to be in advertising revenue and distribution for 2001. We're a year ahead. That [indicates] that our product is good and we're being well-received. What we have to do is to keep it growing. It's a competitive world out there.
How much of your growth is based just on better distribution? When you add subscribers, do ratings increase because more people can see you, or do they rise because more people are actually choosing you?
I think it's a combination. I think one acts as a turbocharger for the other. Let me put it this way. I think, if you took the Court TV 8 to 11 schedule and laid it out on the A & E track or some other comparable network, our ratings would be comparable to those networks. I think we would jump immediately if we were in 70 million to 75 million homes, compared to the 46 million we will be in, in August. If you gave us those 25 million homes, I think our ratings would increase at least 50% higher.
Getting to 70 million will be hard, though.
It's now time for the operators to figure out how to best use their current services. Do they bump some of their pays to digital? Or some of the multiplexed networks to digital? I think how to maximize [current services] is still being worked out.
Listen, they're still trying to get the [set top] boxes. Clearly, as we get to 60 [million] and 65 [million] and 80 million, we'll probably be some greater combination of digital and analog. But right now, we're focused on analog.
You can tout ratings increases, but when you come from such a depleted base, what does that mean?
Our success in programming is supported statistically in relative terms: On a year-to-year basis, our prime time growth for the first quarter was up 100%, and, for the just concluded second quarter, it was up 100%, which for both quarters led the entire cable industry in growth. That's in relative terms.
On our demos, our 18- to 49-year-old demos, our growth was 257% in the first quarter and 222% in the second quarter. The statistics are enormous. That's on a relative basis, but I'm saying, as an absolute number, it becomes impressive.
In absolute terms, we did a 0.6 in the first quarter and 0.6 in the second quarter, which I think is extraordinary. I think it puts us very much in the top end of respectability among mid-size networks. Again, if you lay that over distribution, I really think the opportunity for us to get to that proverbial 1.0 is right in our sights.
Talk about your carriage deals.
I think there is as much creativity in our deal-making as is there is on our air. Candidly, because we don't have retransmission consent, we don't have the currency of being packaged with other networks. Our currency is just good old dollars.
Is there a marketplace where networks are paying launch support and free carriage for some period of time? Absolutely. I think what we've done is that we've brought that [price] down. We are now paying what is competitive to get in the marketplace.
The dual revenue stream is very important. It's sacrosanct around this place. But we're realists. We know the pressures the operator has in the marketplace. If we were paying exorbitantly, I could say, good news: we just added 20 million subs; bad news: we're bankrupt. I think on the teeter-totter, though, we're just about right.
Have advertisers hopped on?
Our upfront tripled what we had last year. And publicly we're saying we'll do slightly more than $50 million in revenue for the current year. What I like is that we have some 40 totally new-to-the-network advertisers, which include Sara Lee, Kellogg's, a couple dotcoms, Sony Electronics, movie studios, some cable networks like USA Network, Encore, HBO, Showtime. I think we offer a very targeted, rich base for advertisers. As [Executive Vice President of Sales] Gig Barton says, we continue to overdeliver to our advertisers.
Does AOL Time Warner make you uncomfortable because you might get forgotten as kind of a half-sibling, or is it a good thing for Court TV?
I think you're thinking logically but not necessarily empirically. Being in the family is helpful but not as helpful as you may think. What distinguishes you is your importance. I'm very excited.
What we offer is something [AOL Time Warner] needs inherently, intrinsically. If we can be the single-password provider of information about the crime and justice system-if we are the one viewers tend to think of as the source, that they say there's a crime and justice story, I'm going to go Court TV's Web site-that's our importance.