News Articles

Western Show: No big deal(s)

Attendance drops 48% as recession, consolidation take toll; Comcast offers new channel 12/02/2001 07:00:00 PM Eastern

Ted Turner: A seller's remorse

Ted Turner: A seller's remorse

It was supposed to be Ted Turner's sign-off from the cable industry, a farewell reminiscence before he exits AOL Time Warner, under duress. But the Turner Broadcasting System founder used the platform to harshly criticize AOL Time Warner CEO Jerry Levin, whom Turner believes betrayed him and cut him out.

In the appearance at the Western Cable Show, Turner ruefully—though often comically—acknowledged that he should never have allowed Turner Broadcasting to merge with Time Warner and wished he had instead bought Time Warner "so I could have fired Jerry Levin before he fired me." Turner blasted his longtime partner in Turner Broadcasting System and boss at Time Warner as part of the Cable Center's oral-history project to chronicle the record of the industry.

While the highlight of speech was his take on being squeezed out, he also shed light on a dark part of cable's past. Turner acknowledged that his short-lived music video network was designed solely to help cable operators—particularly John Malone—who wanted to scare MTV away from a planned license-fee hike. "Malone and a lot of the bigger cable operators felt that they were getting screwed by MTV," Turner said. "Malone said, 'Ted, do us a favor. Start a music channel and announce that you're not going to charge any fees.'" The threat of competition gave operators leverage in the negotiations. "We signed off a month later; we had served our purpose."

When Turner sold his Turner Broadcasting System to Time Warner in 1997, he had carved out a slot as vice chairman of the company. The position gave him no management responsibilities but a voice in the company's strategy and a platform for Ted to be Ted.

When Time Warner in turn was sold to AOL, however, Turner's role was instantly diminished, and, when his contract expires in December, the company won't renew it. "My advice to younger people in the room is be real careful who you sell your company to."

Turner lamented that Levin now owns "all I care about"—except his land out West and his children.

He recalled that Levin had said, "Ted, you're my best friend. I said, 'I'm your best friend? Jerry, I've never been in your home. If I'm your best friend, who's your second-best friend?'" But he agreed that, at one time, "I was his friend. I would have had a hard time firing him—at that time."

Turner acknowledged that he was naive when he sold TBS to Time Warner. Because it was a stock swap, he wound up with 9% of the combined companies. "Jerry thought he bought me, I thought I bought them. But 9% was not 51. … I guess I got a little overconfident."

Turner also said he believes that, in the near future, perhaps within a year, there will be only two surviving cable MSOs and only four or five programmers.

He also aimed broadsides at Fox and ESPN, the latter of which he said "screwed cable operators to the wall" because of the fees it charges.

Turner noted that, at some point in his career, he was "a handshake away" from owning each of the three major broadcast networks. He blamed Levin for stopping the NBC deal. "I was very brokenhearted when Jerry vetoed the NBC acquisition. Malone voted for it."

It's 8:15 a.m. in the Hilton across from the Anaheim Convention Center and anyone can walk up and get a table at Cafe Oasis for breakfast.

The last time the Western Cable Show was held in Anaheim, "that never would have happened," said Jack Bryant, CEO of video-on-demand hardware developer Concurrent Systems. "That's the best indicator of how few people are here."

Not that there was any shortage of indicators last week of how badly the annual convention is suffering from both the recession and ripple effects of consolidation among MSOs. Attendance plunged 48%, to 17,000 from last year's 33,000 when the Internet boom was having its last hurrah.

Most of the missing were the staffers of former exhibitors, including such stalwarts as HBO and MTV. The conventions have for years been key centers of networking with colleagues and customers, examining new products and networks, and simply getting a semi-annual pulse of the industry. With so many cable systems in the hands of fewer and fewer decision-makers, programming and technology companies balked at spending $500,000 to $1 million to buy, ship, erect and staff a convention booth. Broadcast TV conventions, notably NATPE, are suffering similar downturns.

Outgoing AOL Time Warner Vice Chairman Ted Turner remarked that the once bustling show floor "looks like Kosovo or Afghanistan"—a landscape of "big holes" where there used to be exhibitors.

'We've been one of the largest shows in the U.S., but we're not immune to a recession,' said C.J. Hirschfield, vice president of industry affairs for Western Show organizer the California Cable Television Association.

The CCTA struggled with its "non-exhibiting participant fee," designed to reduce networks' costs of scheduling meetings while keeping the show's revenues up. Programmers including In Demand, Rainbow's video-on-demand startup Mag Rack and TechTV paid the fee for the right to book suites in convention hotels. But some were incensed about being exiled to distant hotels, excluded as speakers and denied entry to events like the Chairman's Reception unless they forked over $14,000.

"We don't regret not doing it," said Court TV Chairman Henry Schlieff.

CCTA head Spencer Kaitz said it was hard to work with programmers this year because "there's a certain frenzy to their cost cutting. We know $14,000 is not the right price. We are trying to find what that price point is."

Other than attendance angst, news from the show was hardly earth-shattering. It marked the coming-out of cable's three newest CEOs: AT&T Broadband's Bill Schleyer, Charter's Carl Vogel and Time Warner Cable's Glenn Britt, all industry vets who recently took the new posts. They were sedate, touting their growth rates and criticizing the rising programming costs.

The most significant programming news came from Comcast-owned startup G4, a network built around videogaming. G4, conceived by ex-Walt Disney Co. movie producer Charles Hirschorn, aims to cover news about videogames, playing tips, and offer "lifestyle" programming.

Hirschorn contends that the increasing sophistication of videogames and the $8 billion spent on game hardware and software justify developing a network. He compared it with movies and TV shows. "Videogames have characters; they have storylines." Comcast expects G4 to ultimately cost $150 million to start up. So far, it has a rollout commitment from Insight and, of course, Comcast's own systems. G4 is slated to debut next April.

NBC Cable, by attrition, became the show's anchor tenant, the last major programmer left on the floor. With the Salt Lake City Olympics coming in February, NBC execs decided to hold onto their booth. Bridget Baker, senior vice president of cable distribution, said traffic was good but the atmosphere was unexciting. "The big activity booths like Viacom and Discovery were mini-productions."

Some participant-level programmers, sitting in hotel suites at the Hilton and Marriott, agreed that the show was missing a buzz. "Programmers brought a sexiness to the exhibit floor," said Ron Garfield, Hallmark Channel's senior vice president of network distribution. "The stars and stunts drive the traffic."

Hallmark is one of 10 networks that paid $14,000 to be official show participants instead of exhibitors. The network cut costs a little further by putting two staffers up in its hospitality suite. The participant fee entitled programmers to hotel suites, show access and tickets to the half-empty Chairman's Reception.

But their satisfaction was mixed. Some programmers said they felt isolated; others grumbled that they would have had as much access if they hadn't paid any fee.

"The exhibits keep people on the floor, and operators don't want to be running from suite to suite," said Peter Gochis, Tech TV's vice president of affiliate sales.

Exhibitors who actually showed up weren't grousing. "Very productive," said Neil Gaydon, CEO of digital set-top manufacturer Pace Technology. He said he secured meetings not only with plenty of cable executives but also with technology partners. Harmonic Convergent Systems President Dr. Yaron Simler called the reduced attendance simply "good filtering."

What's more, for Simler, the low attendance created a bargain Western Show organizers might not like to hear about. Instead of booking his hotel room at the $190-per-day special convention rate, Simler booked on Yahoo! Travel site for $85.

Ted Turner: A seller's remorse

Ted Turner: A seller's remorse

It was supposed to be Ted Turner's sign-off from the cable industry, a farewell reminiscence before he exits AOL Time Warner, under duress. But the Turner Broadcasting System founder used the platform to harshly criticize AOL Time Warner CEO Jerry Levin, whom Turner believes betrayed him and cut him out.

In the appearance at the Western Cable Show, Turner ruefully—though often comically—acknowledged that he should never have allowed Turner Broadcasting to merge with Time Warner and wished he had instead bought Time Warner "so I could have fired Jerry Levin before he fired me." Turner blasted his longtime partner in Turner Broadcasting System and boss at Time Warner as part of the Cable Center's oral-history project to chronicle the record of the industry.

While the highlight of speech was his take on being squeezed out, he also shed light on a dark part of cable's past. Turner acknowledged that his short-lived music video network was designed solely to help cable operators—particularly John Malone—who wanted to scare MTV away from a planned license-fee hike. "Malone and a lot of the bigger cable operators felt that they were getting screwed by MTV," Turner said. "Malone said, 'Ted, do us a favor. Start a music channel and announce that you're not going to charge any fees.'" The threat of competition gave operators leverage in the negotiations. "We signed off a month later; we had served our purpose."

When Turner sold his Turner Broadcasting System to Time Warner in 1997, he had carved out a slot as vice chairman of the company. The position gave him no management responsibilities but a voice in the company's strategy and a platform for Ted to be Ted.

When Time Warner in turn was sold to AOL, however, Turner's role was instantly diminished, and, when his contract expires in December, the company won't renew it. "My advice to younger people in the room is be real careful who you sell your company to."

Turner lamented that Levin now owns "all I care about"—except his land out West and his children.

He recalled that Levin had said, "Ted, you're my best friend. I said, 'I'm your best friend? Jerry, I've never been in your home. If I'm your best friend, who's your second-best friend?'" But he agreed that, at one time, "I was his friend. I would have had a hard time firing him—at that time."

Turner acknowledged that he was naive when he sold TBS to Time Warner. Because it was a stock swap, he wound up with 9% of the combined companies. "Jerry thought he bought me, I thought I bought them. But 9% was not 51. … I guess I got a little overconfident."

Turner also said he believes that, in the near future, perhaps within a year, there will be only two surviving cable MSOs and only four or five programmers.

He also aimed broadsides at Fox and ESPN, the latter of which he said "screwed cable operators to the wall" because of the fees it charges.

Turner noted that, at some point in his career, he was "a handshake away" from owning each of the three major broadcast networks. He blamed Levin for stopping the NBC deal. "I was very brokenhearted when Jerry vetoed the NBC acquisition. Malone voted for it."

 

Alert to All Users of the Disqus commenting system:
Because of a recent global security issue, the Disqus website recommends that all users change their Disqus passwords. Here's a URL about the issue:
http://engineering.disqus.com/2014/04/10/heartbleed.html

 

April
May