Programming

Mr. Kent's Super Moves

Ten years into his job as Turner chairman and CEO, Phil Kent reveals how he is transforming his outfit, details the performance of his new CNN guru Jeff Zucker and assesses the industry’s biggest threats 3/25/2013 12:01:00 AM Eastern

Zucker: ‘I’m Looking at Everything’

Phil Kent prefers not to speak for those who report to him, so CNN Worldwide president Jeff Zucker agreed to fill in some of the blanks on his strategy for turning around CNN.

Phil Kent has said that CNN has not had enough great producing talent behind the scenes. How can you recruit great producers to CNN and make it a place where they want to come work?

I think this is an incredibly exciting time for CNN, and already we have seen the reaction to that—people want to be a part of it. I’ve been overwhelmed with people reaching out, looking to see if there is an opportunity for them at CNN. That’s exciting—and will ultimately be transformative across the business. It won’t happen overnight, but I’ve been pleased with what I’ve seen just a couple months in.

Your CEO also said he is probably more patient than you about making changes and seeing results at CNN. Do you agree? He said he has set no timeline— what timeline have you set for yourself?

Phil and I are on the same page in terms of what needs to be done, and he’s been nothing but supportive of CNN and me. There is no timeline….But I think anyone who has ever worked with me will tell you I tend to move quickly. That said, we need to be thoughtful, strategic and smart about change.

Phil pointed to your elimination of the managing editor position as one example of an operational change you have made. What are your other operational priorities for CNN?

This is a massive organization with global reach. We operate 23 channels, with all the accompanying digital properties as well, and we are a 24-hour-a-day business. My goal is to have us working as efficiently as possible, producing the best coverage from the most talented journalists in the business. I’m looking at everything. —AM

New CNN Worldwide president
Jeff Zucker has only been on the
job two months, but already his
boss, Phil Kent, is giving the executive
charged with revitalizing the news giant
rave reviews for not only turning down
a sprawling office at the Time Warner
Center for a modest one in the newsroom,
but for changing the mood at CNN and
energizing the staff.

The change at the helm of the news
brand is just the latest big transformation
Kent has sparked in his 10 years as chairman
and CEO of Turner Broadcasting
System, which in his tenure has grown
from 9,500 employees to more than
13,000 across 130 channels in 200
countries around the world. Last year,
Kent recruited RTL Group's Gerhard
Zeiler to run Turner's international
business, which is now in the process
of restructuring for growth.

In a wide-ranging interview over breakfast
at Nougatine in New York City, Kent
revealed to B&C programming editor
Andrea Morabito who is really setting the
timeline for change at CNN/U.S., what
Turner can learn from Netflix's original
programming strategy and why Dish's
Hopper is bad for the business. Morabito
also spoke with Zucker and recently named Warner Bros. CEO
Kevin Tsujihara about the
secrets to Kent's ability to leap corporate
divides in a single bound (among other
things). An edited transcript follows.

Jeff Zucker has officially been on the job as president of CNN
worldwide for about six weeks. Give him a grade so far.
A+. It's so exciting to watch. I cannot remember ever seeing anybody
come into an organization and just change the mood. The comments that have come
back to me have been he appears to be everywhere at once. He's doing everything
from running the editorial meetings to participating in strategy discussions.
He's already made some interesting moves with talent, thinking about some new
shows. I couldn't be more pleased.

I heard he took an office in the newsroom.
I was very impressed by that. As I thought I should, I offered him one
or two more comfortable, more presidential-like alternatives and he said "No, I
want to be right in the thick of things, right in the middle of the operation,"
and he took an office that most companies, you'd probably have a manager [or]
newly-promoted vice president, and he's very happy.

What has been Jeff's greatest contribution or change so far?
I would say the mood of the place, the energizing of the staff. In
terms of what you see on-air, you're already seeing, I don't know if the word
is higher story count or better pacing. We're about to, in a couple weeks
launch a new morning show, which I'm really excited about. Hiring Jake Tapper
was big, getting Chris Cuomo was big. He's starting to hire some good
behind-the-camera talent as well. 

So will Chris Cuomo and Soledad O'Brien be paired together in the
mornings for a while?
You're going to start asking questions that you should ask Jeff Zucker.
I don't want to speak for him.

What kind of timeline did you and Jeff talk about for making changes,
and for seeing results?
Not overnight, not short-term. He and I both know this is a marathon
not a sprint. In fact, I have probably said more times than I needed to say "you
don't need to do any Hail Mary moves." We have a good business, we get a great
CPM premium. We need more "M's," yes, but let's do it the right way. Let's get
the fans back. I think the biggest problem that CNN has had over the last
couple of years is the ratings go up and down with the news environment. We
lost fans because of inconsistency. What he and I talked about-and this is
where I have great comfort that we're on the same page-is people need to know
what they're tuning into when they tune into CNN and it has to be deemed
essential by more people again. What that's going to do is not only get the
ratings up the right way through the acquisition of getting back old fans and
getting new fans, but also in the affiliate side, which again, half our revenue
comes from advertising, half comes from affiliate revenue; there's nothing
better than to be deemed essential by a hard-core pocket of people.

You've said before the problem with primetime was largely operational,
not talent. Do you still believe that?
I think we have a lot of good talent. I think what we've had, quite
frankly, is not enough great behind-the-camera talent. I think we have a number
of fantastic producers at CNN but we need more. A lot of attention was given to
on-camera talent but probably not enough commensurate attention to producing
talent, and Jeff understands even more than I do how important that is-TV is a
producer's medium.

Everyone knows I was very close to, and was a big fan of
Jeff's predecessor, but Jim [Walton] was more into running the whole business
of CNN and would be the first one to say that he wasn't the content person.
With Jeff Zucker we get the benefit of not only somebody who is a good
businessperson and has the ability to lead a large organization, but he is a
real expert in news content. He's an impresario. And that's what CNN needed-a
news content impresario.

What operational changes has Zucker made?
One of the early ones was he eliminated the managing editor position.

And you supported that decision?
Yeah, I thought it was an unwieldy structure. Look, Mark Whitaker's a really
good guy, it just didn't work out the way we thought it would.

So you're comfortable with Jeff driving the editorial vision?
Yeah, and look, he will eventually build a core staff around him. Right
now he's learning the people that he has. I'm sure that over time he will make
one or two key hires to help him so he doesn't have to do as many things
himself as he's doing right now. He's a first-class, experienced senior
executive who has had bigger jobs than I've had and I don't need to tell him
any of this. He knows what to do. We have a great relationship and we talk
about certain things, but he's really off and running. He's running CNN.

The daypart that gets the most attention is primetime but we haven't
seen any changes there yet.
Yes, but it's only March.

Did you talk about a timeline for making changes to primetime?
It's his timeline. The last thing I want to do is box anybody in by
making public statements about what I expect. He knows I want to do this the
right way. And I wouldn't be surprised if I'm even more patient than he is. I
want him to be very thoughtful and launch a show when he thinks it's ready and
hire who he thinks he should hire.

In terms of getting a core pocket of fans back to CNN, making it
essential-can you do that with the existing lineup, or do you need some new
faces?
We certainly need a new morning show, that starts the whole day. I
think we need at least one new primetime show.

Well you've got Anderson Cooper on twice right now.
There's lots of things you can speculate on. But I think it's more than
just any one or two shows. It is the tone of the network and it's really
fulfilling the expectation of how we've marketed CNN but haven't always
delivered. 

For the morning show competitive set, you've got GMA and Today doing lighter stuff, CBS taking a hard news approach, Morning Joe is inside the Beltway. What white space can
CNN fill?
A smart morning show but that's a comfortable show for people to watch
in the morning. But I really don't want to speak for him because it's not fair
to him. He's got an idea in his head about what he wants to do and he's working
on it right now.

One critique of CNN is that it relies on splashy hires like Piers
Morgan or Erin Burnett. Do you think CNN needs to do a better job of developing
the next star anchors internally like Fox News and MSNBC do?
Yes, I do. I think we need to do all that. I think we need to work our
own, for lack of a better word-only because we used to own a baseball team-I
think we need to work our own and develop our own farm system better. I think
we always need to be on the lookout for a great talent that might be available
when they become available.

CNN's wall-to-wall coverage of the cruise ship Triumph docking was
mocked in some media circles for being over the top. What did you think of the
coverage?
I thought it was very compelling.

Can we expect to see more of that type of stunt programming? Is that a
good marker for CNN under Zucker?
These are decisions that are made on a daily basis by the heads of news
organizations. If there had been a gigantic news story somewhere else in the
country or somewhere else in the world that day, you might have seen it
differently. This isn't something that the CEO of Turner Broadcasting makes a
pontificating speech about. This is a real-time decision made by Jeff Zucker
and the EPs of the individual shows. That was a very compelling story. There
are a lot of people who go on cruises, think of going on cruises, never think
of something like this happening. I know certainly it will affect my desire to
go on a cruise.

One of CNN/U.S.' strengths is its international bureaus. Now Al
Jazeera, which has a great overseas presence, is starting a U.S. channel. Do
you see them as a competitor?
Everything is competition. We have a lot of options with CNNi. It's a
fantastic network. It's available in the U.S., we just haven't made it
available other than the New York and Atlanta markets for a lot of reasons in
the past. That's all being re-evaluated right now. I don't know in what form or
how soon we would make it more widely available, but it's available if a cable
operator wants to buy it, they can buy it today. Certainly the deal with Al
Jazeera and Current has raised our awareness of rethinking how soon and how
broad we should get CNNi distributed. What fashion that will happen is being
discussed. It's too early to talk about.

What's the biggest misconception about CNN?
That it's a liberal news network. It drives me crazy. It's not.

So how do you change that?
I think [if] people watch it more critically and not just listen to what
other people say about it-I won't mention names-they'll see that it [isn't],
and I think one of the things we fix is make sure we have the right balance of
voices on CNN. That we have good conservatives, good liberals, experts in all
areas. It's a serious news network.

You have several distribution deals coming up for renewal in 2013-15.
You're looking for big bumps. What do you expect you can get in the
marketplace?
Well, I don't want to give you a percentage. That's a state secret.
We're going to get significant increases and we deserve significant increases.
We made significant investments in very valuable... content, and we made these
investments years ago and we haven't fully been compensated for them because
we've had to wait for existing deals [to expire]. So a lot of these
distributors have been getting fabulous content from us for the last two
years-particularly the NCAA men's basketball tournament's a great example... and
still paying us at the old rates when we didn't have it.

There's been some programmer-operator hostility lately: Time Warner
Cable putting lower-rated channels on notice, Cablevision suing Viacom for
bundling of channels. Are you concerned at all going into these deals?
I'm quite proud that at Turner-and it's actually been part of our
strategy-we were a company, we didn't launch a plethora of small digital
channels once upon a time. In fact, the only one that you could even plausibly
say fits in that category is Boomerang. You will find more [of our] networks
that fit into top 10 and top 25 than you will with almost all of our
competitors, maybe all of our competitors from my own recollection. They have
more networks but our networks are widely viewed. TNT and TBS and even now
truTV, and even CNN, whose ratings are not in the top 10 or top 25, it is
essential viewing to people particularly at certain points of the year. So we
like to think of every one of our channels as a must-have, with a very strong
cult following. I actually think we're a very good deal in terms of how we
price our channels to our customers including the rate increases that we're
going to be seeking in this next cycle.

Who's the toughest operator to make deals with?
I'm not going to say that on the record. They're all tough. And it's
their job to be tough.

Where do you fall on Dish's Hopper-what's your opinion on the product?
Whose side are you on?
It's not our fight. Now just because it's not our fight, I'm not in
favor of a technology that enables the automatic skipping of advertising, I
think it's bad for the business.

You've said before you need a healthy broadcast business because they
provide content for your networks.
You took the words right out of my mouth on that one. I'll give you
another reason. I wish that the advertising business would have a stronger
voice in all of this. The advertising business is so diffused across so many
advertisers, so many agencies, that there's not a strong voice to speak up for
them. What keeps getting lost in all this is the importance of national
advertising in original programming. It's certainly half of Turner
Broadcasting's revenue. And I think that any technology that's for free-and
we'll get to pay later because there's always ways people can pay to avoid
commercials-but any technology that enables the consumer to avoid attention to
advertising is bad for the business because it's not only part of the lifeblood
of the business, it's part of the lifeblood of the economy.

You've got the NBA through the end of the 2015-16 season. With sports
rights costs rising as astronomically as they are, are you looking to lock up
that renewal early?

That timing will be determined by the NBA. We have a relationship with the
NBA that's over a quarter of a century now. We're partners with them not only
in television, but we manage the digital businesses for them. We have a
terrific relationship. I have every confidence that we're going to continue
that relationship. Will it cost more money? I could say fairly absolutely. It
will cost more money in the future.

News Corp. just announced Fox Sports 1. How is having another rights
player going to affect your sports business at Turner?
I think in the long-term, any new entrance becomes a competitor for the
acquisition of rights. It's not a tomorrow problem. Who knows in the next
couple of years when these deals come up. I have to fall back on the strength
of our networks, the strength of our relationships with these leagues. And the
truth is, we make a lot of money and we have the ability to pay for these. Now
there will be a point someday-our attitude has never been ‘at any price.' There
are things that we've walked away from before. But as long as we can prove to
ourselves first, to our parent company and our board second, that we can make a
very good return on investment on these sports investments, we'll continue to
do them. And we'll bid aggressively.

ABC just announced that it will offer guarantees to advertisers across
platforms. Are you prepared to do the same at Turner?
I don't know yet.

Is it something you would look at?
I would leave that decision to David Levy [president of sales,
distribution and sports for Turner
Broadcasting System] and Greg D'Alba [president, CNN News Networks & Turner digital ad sales and marketing]
and Donna Speciale [president, Turner
Entertainment & Animation Ad Sales]; they're the experts in that.

Given new Warner Bros. CEO Kevin Tsujihara's expertise on piracy and
digital media, and Turner's leadership on TV Everywhere, do you see those areas
becoming more collaborative throughout Time Warner?
I think there's been enormous cooperation already. I don't think it's
any different. This has been a high priority at the company. I think Kevin
comes to the job with expertise in certain areas and will quickly learn the
other areas.

How closely do you work with Warner Bros. chairman Barry Meyer now?
It's a terrific relationship. And one of the great advantages of Time
Warner is that the largest television studio, one of the largest network groups
can have really deep conversations about where the business is going. We have
very thorough conversations about what's the right approach to VOD, to SVOD, a
lot of conversations about TV Everywhere and digital rights. And the other
thing we're very conscious of is we know we can't set precedents just between
the two of us. We have to do things that will work with other cable networks
and with other studios, for them and for us.

FX is talking about splitting its drama and comedy programming on two
networks, as TNT and TBS has done for years.
Sounds familiar doesn't it?

Does that prove your strategy works?
I've always felt the model we had was the right one. You will see the
programming mix of TNT evolve in the next couple of years to a lot more
originals and less dependence on acquired. The acquired will be more in
daytime, much more dependence on originals in nighttime. We own a lot of
fantastic comedies for many, many years to come. We brought 2 Broke Girls, we're getting better at
developing some of our own.

How does FX's play change the landscape that your networks operate in?
Does it add competition for carriage fees?
Competition is competition. The answer is yes. To the extent that I'm
worried about it? Not that much. It takes a while. I understand why they did
it, I don't know all the reasons they did it, but like us, they own a lot
programming, they have the ability to produce a lot of programming and it's
just an opportunity to make more money in sub fees and more money in
advertising.

Off-network programming doesn't last as long as it used to. Besides
rare exceptions like
The Big Bang Theory,
syndication is generally losing value.
Being a public company, we manage the company for shareholders, for
profitability. Not everything is ratings because, if this is a question of
value proposition, having the acquired programming in the daytime also helps
our margins. The original programming, sometimes it costs more-it all depends
what you pay. If you end up in hindsight overpaying for an acquired series,
than an original doesn't look as expensive.

A&E said last year it would move to 100% original programming. Do
you ever see Turner networks making that same choice?
Not anytime soon. I think we're always going to look at acquired that's
coming along. We're going to be very, very conscious of what we pay for it
given how fast some of them are cycling. Again there are exceptions like Big Bang. I have high expectations for 2 Broke Girls but it's still some time
before that happens. Now truTV is at or near 100% originals.

How do you feel about the batting average of original programming on
TNT and TBS? You've had some recent hits like
Major Crimes and the new TBS comedies did OK, but Dallas isn't as big in season two, The Wedding
Band was canceled.
I'm really happy with the quality of it. I've been pretty happy with
the batting average. Monday Mornings
was a personal disappointment to me because I just thought it was one of the
finest pieces of dramatic programming, and for whatever reason it just didn't
resonate with the viewers. But I think [president, head of programming for TNT,
TBS, TCM] Michael [Wright]'s had a good track record in scripted drama and I
think our track record in original comedy is getting better.

Do you need to be doing anything different to break through the
clutter?
Everyone always wants to have that great buzz-worthy show. I think that
would be nice. Again, we're managing these businesses for profitability, but
one can help lead to another. I mean look at what Walking Dead has done for one of our competitors. Ideally I'm
hoping-I don't sit in those development meetings every day-but I'm hoping that
they're meeting with the widest range of potential creators. I'd like to see
the age average for TNT get younger and that's a big focus, they're really
focused on that right now.

You have Gerhard Zeiler leading the charge for your international
business. What are the markets with the biggest growth potential for you?
Strong emerging markets, trying to do some things at scale in all the
regions. We have a great success story in Latin America, which he's going to
help make even better. Europe, we've had a tough first quarter, Gerhard had to
make some very tough decisions about restructuring. We did a lot of staff
reductions to [correctly] size the organization, to get it ready for years of
growth. We hired a terrific new head of Europe, he's just made a very
significant hire in Giorgio Stock from the Walt Disney Company, will start in a
few weeks. And he's been spending a lot of time in Asia too, getting to know
the people and getting to know the key partners and customers that we have there.
It's going to be continuing organic growth and smart M&A in markets that
matter, opportunities of scale. Where we've made some mistakes quite frankly
was going into some hot emerging markets but too small.

Are you looking to make more investments in free-to-air channels
internationally?
Very possibly, all depends. We're-particularly now with Gerhard running
it and having enormous credibility in that business-we're much more willing to
do things like that because we know we have somebody running the organization
who has [broadcasting experience], most of our people had deep experience in
the pay business.

In terms of future M&A, do you see any opportunities where
acquiring another domestic cable channel or international channels would be
attractive?
Sure, we'll look at everything. These things don't come cheap. The
multiples are high. We have to be convinced that we can improve it enough or
bring enough added value to it to make sense.

A CBS-CNN merger has been talked about for years, but you've never been
able to work it out. Would you look at other suitors?
Honestly, there hasn't been an attempt to make it work in 10 years.
It's old news. There's absolutely no discussion whatsoever of that going on.

With anyone, or just CBS? Has anyone else approached you?
With anyone. There are potentially interested parties out there;
there's been nothing recent. I think eventually, and I mean eventually, it
could be five, 10 years from now, that all the broadcast news organizations
will want to have an affiliation-whether it's a joint venture, a sourcing
agreement-with a 24/7 news operation. Just to help them with their own cost management.
We're open to discussing it with anybody. Right now there's nothing going on,
we're not focused on it.

Speaking of joint ventures, how does the ABC News-Univision channel
launch affect the landscape for CNN and CNN en Español?
Everybody needs to do what's best for them. What we've determined is
right for us right now is-and I don't know if you'd call it a programming block
or a syndication service-we've rolled out CNN Latino which is going to be a
number of hours a day on Hispanic over-the-air stations, and it's just getting
started. That's our first move into the U.S. Hispanic market besides what we've
already done in terms of getting some distribution for CNN en Español on cable.

A few years ago Netflix was almost a taboo subject with TV executives.
Now people seem to have warmed to it. Do you see them as friend or foe now?
I don't see them as an enemy. I see them as a friend in certain ways, a
competitor in other ways. They are here to stay. It's a good product and it's
going to be a very important part of what we all call the television ecosystem.
They're going to play a critical role in the funding of original programming
for broadcast and cable, maybe even more so for cable because the back-end is a
little more elusive, particularly for drama.

We just did our first deal with them; we started with
animation. Warner's done quite a few deals with them now. What we're trying to
do is window everything smartly so we don't undermine the value proposition we
bring to our cable and satellite operators, but also, it's really in a lot of
ways made up for some of the shortages in the DVD business. It's the same
consumer behavior.

I feel so strongly that the model for TV Everywhere should
be five episodes at a time. There's been a push by some distributors now to
make TV Everywhere season-pass. I don't agree with that. I think that's the
home entertainment business. I think that requires being compensated
additionally because you're undermining either a studio or a revenue stream for
the content creators.

It's always possible for any given distributor to bully or
bribe a network to do a broader grant of rights. Being maybe more frank than I
should in an on-the-record interview, we're too strong to be bullied and we're
with rare exception too principled to be bribed. Absent a really compelling
financial proposition, which again is not TV Everywhere, I feel really strongly
that TV Everywhere should be one price -- whatever rate the cable operator pays
us, they get the VOD, they get the five episodes. If they really want more than
that then they should pay for it because it undermines another revenue stream.

Did you learn anything from the launch of Netflix' House of Cards that you can apply at Turner? In terms of
releasing all the episodes at once and relying on Big Data to choose
programming
.
What I've said to my colleagues is let's pay attention to this concept of
binge viewing, and let's think through carefully what does it mean to us and do
we ever want to experiment with it? I don't know how soon we will, what show we
will. I will confess that I've succumbed to it myself, to binge viewing on one
or two shows when I was not feeling so well and didn't like the offerings on
television that day.

I think what the problem is, it's hard to build anticipation
when you just put everything out there at once. Will there be a day where you
launch a show and season one, it's a traditional pattern, and then you find
it's got a certain addictive nature and there might be a reason to do six
episodes in one time? I don't know. Some cable network, ours or someone else's,
is someday going to try this and everyone's going to be fascinated with the
result. Right now it's exclusive to the over-the-top services.

E-mail comments to
amorabito@nbmedia.com and follow
her on Twitter: @andreamorabito

Zucker: ‘I’m Looking at Everything’

Phil Kent prefers not to speak for those who report to him, so CNN Worldwide president Jeff Zucker agreed to fill in some of the blanks on his strategy for turning around CNN.

Phil Kent has said that CNN has not had enough great producing talent behind the scenes. How can you recruit great producers to CNN and make it a place where they want to come work?

I think this is an incredibly exciting time for CNN, and already we have seen the reaction to that—people want to be a part of it. I’ve been overwhelmed with people reaching out, looking to see if there is an opportunity for them at CNN. That’s exciting—and will ultimately be transformative across the business. It won’t happen overnight, but I’ve been pleased with what I’ve seen just a couple months in.

Your CEO also said he is probably more patient than you about making changes and seeing results at CNN. Do you agree? He said he has set no timeline— what timeline have you set for yourself?

Phil and I are on the same page in terms of what needs to be done, and he’s been nothing but supportive of CNN and me. There is no timeline….But I think anyone who has ever worked with me will tell you I tend to move quickly. That said, we need to be thoughtful, strategic and smart about change.

Phil pointed to your elimination of the managing editor position as one example of an operational change you have made. What are your other operational priorities for CNN?

This is a massive organization with global reach. We operate 23 channels, with all the accompanying digital properties as well, and we are a 24-hour-a-day business. My goal is to have us working as efficiently as possible, producing the best coverage from the most talented journalists in the business. I’m looking at everything. —AM

October

News Technology Summit

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