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Synergy Strikes Out

But why can't Viacom just get along as one happy family? 4/03/2005 08:00:00 PM Eastern

Back in the 1980s, organizers of the Emmy Awards broke down and allowed cable programs to join the party. The Museum of Broadcasting eventually widened its doors, too, becoming the Museum of Television and Radio. This magazine underwent the same evolution a dozen years ago when it quit being Broadcasting and became Broadcasting & Cable.

Perhaps that's why I'm still mystified by Viacom's announcement that it might split in two, leaving its broadcast assets on one side and its cable components on the other. These days, the rift between the two has never been narrower. Indeed, broadcasting and cable mesh these days a whole lot more comfortably than love and marriage, if the robust divorce rates are any indication.

Broadcast networks occasionally throw up ratings that fall into cable territory, while the right cable hit can vault (though rarely) into the broadcast stratosphere. Sister channels like Nickelodeon and CBS, or Time Warner's Cartoon Network and The WB, share children's programs. Kids have been a main driver in helping obliterate the lines between the two media because they don't discriminate between channels 2 and 242.

Congress itself is seeking to erase all disparity, with a few crazed representatives attempting to subject cable to the same maddeningly vague indecency guidelines that have plagued broadcasters.

Major companies have recognized that possessing both cable and broadcast channels offers not only synergistic opportunities but also a hedge against the natural cycles of up one minute and down the next. NBC, for example, might be suffering through a sluggish season, but the network was all too happy to point out that its cable brethren—USA, Sci Fi, Bravo—had just enjoyed a banner February sweeps.

Similarly, both ABC and Fox have deftly exploited their relationships with ESPN and Fox Sports, respectively, just as NBC widened its 2004 Olympics coverage to its cable channels and Spanish-language network Telemundo without seriously diluting ratings for its flagship network.

Even a cursory glance of the executive pool underscores the back and forth between cable and broadcast, with entertainment chiefs at three of the broadcast nets—UPN's Dawn Ostroff, NBC's Kevin Reilly and Fox's recently annointed Peter Liguori—having spent formative years in the cable space. Comedy Central's Doug Herzog enjoyed his own brief fling with Fox, oversaw a few hits, and returned to the more tumultuous pastures of cable.

Granted, the impetus behind Viacom chief Sumner Redstone's Solomon-like gesture has a certain logic, betraying that the crazed push to get bigger for its own sake, which characterized the 1990s, has its downsides. These companies can become difficult to manage, with shiny, profit-producing areas being tarnished by less productive sectors. Suddenly, being big into radio and billboards doesn't seem like such a grand idea, with whatever cross-promotional benefits they offer being obscured by dismal earnings.

Those issues, however, have little to do with the rationale behind separating CBS and UPN from MTV, VH1, Showtime, Comedy Central, Spike and Black Entertainment Television—already an arbitrary division that hinders the scope of cooperative efforts.

If anything, the politics of career advancement at Viacom have gotten in the way of some of the ventures that could be exploited and have been at other networks. Look at FX's marathons of the Fox series 24 in its early days, when the show was still struggling, or NBC's exposure of Bravo's Queer Eye for the Straight Guy and Sci Fi's Battlestar Galactica. Still, no networks have fully mastered the concept of using cable as a lab, in essence, to develop and test projects, although there have been some furtive steps in that direction.

Redstone has every right and reason to be concerned about Viacom's stock, as well as his legacy in assembling this giant and planning for its future. Yet the structure he set up to empower his two able lieutenants, Tom Freston and Leslie Moonves, has now left him contemplating an action that, in hindsight, could be as shortsighted as it is capricious.

Because, to borrow from an old song, broadcasting and cable really do go together like a horse and carriage, and anyone who fails to recognize as much in the long term risks winding up in the buggy-whip business.

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