It really is a new year at ABC, as Disney/ABC Television Group President Anne Sweeney enters 2011 with a largely shuffled executive lineup, with recent changes at the top of divisions from ABC Entertainment to ABC News to ABC Family.
But in keeping with Disney’s recent philosophy, there are actually very few new faces in these high places. And internal consistency is probably not a bad idea, given the rabid changes going on every day in the content creation and delivery business, where just finding great shows simply isn’t enough anymore.
As she begins her first full year with the new team in place, Sweeney sat down for a wide-ranging discussion with B&C Executive Editor Melissa Grego. Following is an edited transcript of their conversation.
You made several big executive appointments to your leadership team in the past year or so— Paul Lee, Ben Sherwood, Rebecca Campbell, Geri Wang, Michael Riley and, in late 2009, Carolina Lightcap. As you start off the New Year with essentially a new team in place, do you have a new drumbeat in mind—or team slogan, if you will— for how you want this group to operate?
My slogan has always been ‘change is good.’ I do believe that. And when [Walt Disney Co. CEO] Bob Iger tapped [former Disney Channel boss] Rich Ross to be chairman of Walt Disney Studios, it did trigger a great amount of movement in my group. That said, I’ve done a lot of talent planning, actually for many years now.
In every single case, I feel that I have hired the smartest people that I could find. I have cast this team to reimagine their businesses, and I hired these people because they are unacccepting of the status quo, they are all entrepreneurs, they are all people who think outside of the box. And my management style is, hire the smartest people I can find, give them their goals and let them go.
Ben Sherwood is the only exec among those we are discussing who was not a Disney employee when named to his new post. Now I understand your talent development process somewhat leads to this, but is it safe to say you generally prefer to go in-house?
My preference always is to hire smart people, but when you hire smart people you have to be very focused on their career development. And you have to look beyond the job that you just asked them to do, and you have to be thinking more broadly for career opportunities for them within your own division and also within the Walt Disney Co., as evidenced by Bob tapping Rich for the studio, and when Bob tapped me, just six years ago. I came over to Disney 15 years ago to run Disney Channel. We didn’t have an XD, and we didn’t have a Disney Junior. We didn’t have a lot of things. But six years ago, Bob tapped me to run ABC and ABC Studios, and then just [last] year, asked me to add our owned station group to the portfolio. So I’ve been the bene! ciary of talent planning as well. And it’s worked for me. I’ve enjoyed it.
Even if you were to look at the moves aside from those sparked by Rich’s departure for the film group, this still is an unusual number of direct reports to change in a given year. Was there something that prompted the change?
They were all individual situations, they were all different. Yes, we had the domino effect from Rich leaving, but Steve [McPherson, ABC Entertainment chief] resigned in the summer, we accepted, so that opened a position and caused another domino effect. And then David [Westin, ABC News president] decided that after many years of great service to ABC and to the Walt Disney Co. that he was done. They were all different.
Is there anything that jumped out to you that ABC News hasn’t been doing that it should to be more successful?
Ben’s job will be to re-imagine news for the future. He comes from a very different background than David did. He had been a producer for us not once, but twice. He joined originally in 1989 with Primetime Live as a producer, and then returned as executive producer of Good Morning America. What followed his time as EP of GMA was starting a Web business, the Survivors Club, and he brings a wealth of information about the digital space to his job. And the conversations I’ve already had with him about news and digital have been not only thoughtful, but very exciting.
Les Moonves last year said the broadcast news business is due for major change and star anchor salaries are outdated. He said Katie Couric’s deal with CBS was the last of its kind. Do you agree?
We’ve already gone through our right-sizing of the organization, and I believe that just speaking for ABC News, we have our cost controls in place and we’re operating in a very smart and appropriate way, given the marketplace.
What’s your take on the health and future of the broadcast news business?
I can only speak for ABC, but I like our hand. I like our brand because our brand stands for something. We have real journalists—there are standards that we live with. We have a brand that stands for something, that people know, understand, recognize and most importantly, trust.
How much of a place for opinion is there at ABC News?
I think there is a place for opinion, but you have to be very careful when you’re reporting the news to make sure you are reporting the news.
Bill O’Reilly and Keith Olbermann get big numbers. Do you want someone like that somewhere in your mix, or does that harm ABC News’ brand?
We actually get quite large numbers as well.
So you can do that without them?
I think Fox News is a very different brand than ABC News. And Fox News is clearly more comfortable with, and has the time to put on, opinion shows that we would not be running on [our] network.
There have been reports and speculation that Disney is considering a play to acquire Bloomberg to combine with ABC News. Where does that stand?
I talked about it before the holidays because we were in conversations with Bloomberg at the end of the summer about the election to see what we could do with them. Unfortunately, the plan didn’t come to fruition. We recognize them as a very strong and highly respected business news brand.
So you’ve talked about collaborating with them, but as far as an acquisition, where does that stand?
We’re very opportunistic. As we see opportunities to work together, we’ll certainly be talking to them again, because we have tremendous respect for their business news.
Can you—or do you want to—continue to operate the news division without a 24-hour cable component? Can you do that competitively, especially if CBS and CNN figure out a way to merge their operations?
I think there are many different opportunities out there right now, not just for news but for entertainment as well. If you look at what ABC News did when we collaborated during the election with Facebook, that’s a very interesting distribution platform for news. The conversation that we were able to have with so many viewers live during a very important and in many cases very controversial election I found to be quite electrifying. There are many platforms to consider for news, and I think we need to think expansively as a news division going forward and not limit ourselves to thinking of news as just a broadcast and/or cable play.
So maybe a Facebook play?
Given its recent penchant for outside investment, is Facebook something you see Disney investing in?
Not me. It’s a good question, but not for me.
What is your appetite in general for acquisitions this year? What sort of asset would be the likeliest next acquisition?
Honestly, nothing comes to mind at the moment.
You just sold two smaller-market O&O stations. It does make me wonder whether you might pursue any strategic station acquisitions that might be a better fit with the group. Is that something you might be looking at in 2011?
We have no plans at the moment to expand the station group. (For a Q&A with ABC station group chief Rebecca Campbell, click here).
Let’s talk about how the ABC news and entertainment divisions work together. The divisions have been known to be somewhat at odds in the past, with Steve McPherson and David Westin butting heads in particular about the Nightline time slot. What’s the dynamic you see—or would like to see—between the entertainment and news divisions?
Ben is really just weeks into his new job. But early on in Paul’s tenure, the Chilean miners were trapped and the world was waiting to see them emerge, and I think Paul’s background at BBC News really came into play. He ran down the hall with [ABC scheduling chief] Jeff Bader and said, “What does News need? These men are going to be coming back to us tonight, and what should we be doing?” I think Paul’s news background will prove very helpful to Ben. And I think since Ben has spent time in the entertainment space—let’s not forget, he wrote a couple of books and one was made into movie—Ben does understand the world that Paul is operating in as well.
So why isn’t Jimmy Kimmel on at 11:35?
Because Nightline is. And we like our hand. We like both of our shows, and feel that our offering is differentiated from the other two broadcast networks that program late night.
Is it worth investing in late night anymore, given the fractioning audiences?
Yes. If you look at the ratings success we’ve had with Nightline, and certainly we got into the game very late with Jimmy Kimmel compared to the other networks that had had late-night hosts for decades. Jimmy’s made a tremendous amount of progress in seven years.
What are the biggest priorities you have set out for Paul Lee and the ABC Entertainment Group?
Biggest priorities for the entertainment group are always the best ideas. I think that Paul and his team are people who think out of the box. But that team is charged with finding new talent, new writers, new actors to work with and ! nding ideas that break through for us.
Should we expect to see ABC’s brand evolving very much under Paul Lee’s care?
Paul is still in development, nothing’s gone to pilot yet. So we will see Paul’s take come early April.
The sense out there is that Comcast is expected to turn around NBC. Do you agree, or could that just be rivals trying to raise expectations on purpose?
I think what we all know about television is it’s a marathon and not a sprint. And Comcast’s purchase of NBC Universal really underscores the high value of television.
If you could have one piece of talent on your air who you don’t have currently, who would it be?
That’s a great question. I think we’re lucky, we have a lot of the people that I really enjoy. I was just thinking about Ryan Seacrest, but we just had him for New Year’s Eve. He’s a terrific talent. I think he is the hardestworking person in television—I have never seen anyone so committed and do such a great job in every single venue. He produces Jamie Oliver for us, he does New Year’s Eve. He’s a great talent.
Let’s talk about another great talent, Oprah Winfrey: 2011 is a dramatic year for her, with the launch of OWN. What do you make of OWN? What impact do you expect it to have on the TV landscape?
I think Oprah was very clear in every press report I read that she believes that it’s a marathon and not a sprint. She delivered a very strong and thoughtful launch, and I think she knows as a television executive that launch day is only day one. She has some interesting and very strong offerings. I think they’ve gotten off to a sound start. But I have been in the launch business for a long time, so I know what they’re facing and how much work goes into it, and hats off to them for launching well.
How big of an impact do you expect the end of the Oprah show in syndication, which of course you have on some of your top stations, to affect your stations’ business?
It certainly marks the end of an era. But we have to remember that it is an opportunity, and as I said, change is good. We have to remember that Oprah wasn’t Oprah until she was. And Ellen was a jump ball, too.
Your daytime and syndication division has some great existing syndicated properties, but how aggressive would you like Brian Frons and his group to be in supplying new first-run syndication projects?
They are an aggressive group. They’re very focused on finding new talent, looking at new forms and figuring out great opportunities for our company and for the television landscape.
They haven’t taken anything out to market in a while. In terms of volume or quantity, what would you like to see? Would you like to see something come out in the next 12 or 18 months?
It’s not a question of volume, it’s really a question of quality and opportunity for us. And Brian does have a very strong development slate that we’re looking at.
Is there a chance we’ll see something in the next cycle?
Time will tell.
Another huge issue in broadcasting is retrans cash and calls for retrans reform. Do you think the system works, or is it broken?
I think the system does work. And we’ve been very pleased that the FCC has taken a hands-off approach and has allowed private negotiations to go without government intervention. And we think that when left to the parties, there are sufficient incentives for both sides to get the deals done without interruption. I fully understand the concerns that are raised when consumers are adversely affected by this kind of posturing, but we’re optimistic that Congressional policymakers will understand that creators of popular and costly product deserve to be fairly compensated for it.
How about the evolving relationship with your station affiliates. The Affiliate Ad Inventory Exchange System appears to have been a winner, yes?
Probably the most exciting thing that evolved in the last number of months has been the inventory exchange program. That is all about supply and demand. It’s a great example of reimagining your business, and understanding where the opportunity is and being " exible and smart in taking advantage of that opportunity. We worked with our affiliates to figure out how we could develop this exchange plan.
It started with the affiliates buying network time, and we just completed our first reverse-exchange plan when the network bought local avails from the affiliates. So we created " exibility in the business model that never existed. It had always been, we had a fixed number of spots, those were the spots that we sold, and there was a wall between. We have taken down the wall, and we are far more " exible and opportunistic than we’ve ever been before.
You also have been up to some technology innovations.
We have in fact 15 patents pending. I think that it’s important to look at ABC, at the Television Group and at the Walt Disney Co. as a technology company as well as a content-creation company. We are creating technology to change our business, we are creating technology to improve the production of our content.
Can you elaborate on what type of technologies you’re talking about with these 15 patents and things you’re developing?
Everything from the full episodes player, our app for the iPad for ABC.com, certain aspects of the Inventory Exchange System. We had to create technology in all of those instances to facilitate change.
You of course were first to make that deal with Apple and iTunes, which seems like ages ago in TV years, and of course you made this deal in December with Netflix. Talk to me about why you made the Netflix deal.
You mentioned the iTunes deal—it’s shocking, it was October 2005. What we learned and what we know about all of our activity is, all of these deals have been short-term deals that we used to experiment with various biz models, pricing, and windowing. We’ve increased our revenue, and we believe it’s incremental and has not cannibalized any of our current business models. We’ve increased our relevance to the consumer. And these activities have helped to reduce piracy.
We’ve been very thoughtful about the volume and timing to market, and we’re still figuring out the right balance. But we don’t believe that our current mix has hurt our company, or any other company. We don’t believe that the current mix that we offer on these different platforms has been harmful to our company or to others, and no single deal or combination of deals has created jeopardy in terms of MVPD stuff.
When a cable network or station group is considering buying one of your shows in off-net syndication and they say, you have that on Netflix or iTunes and I want to pay you 20% less in license fee than I did last cycle, what do you say?
Those conversations have gone on in one form or another for decades, and that’s what negotiations sound like. There’s a value we believe the product has and there’s an amount of money a buyer wants to pay. And that hasn’t changed.
What do you see as the growth areas of your business?
As steward of these businesses, my job is to create revenue streams that don’t cannibalize each other, that support the great programming investments that we make— whether it’s new retrans deals with MVPDs, licensing deals with our affiliates, figuring out new distribution opportunities for news. Really creating added value.
International expansion is also something we haven’t talked about. We have 96 Disney channels or feeds out there, and just since fall of 2009 we have launched 26 new Disney products into the marketplace—whether it was Disney Channel, Disney XD and coming up now, Disney Junior. Most recently we did a joint venture in South Korea, and we’ve also launched in Russia. So that’s actually a thriving and interesting business. I’m actually headed to London to meet with the team to talk about the continued global expansion.
What one thing do you worry most about?
I worry about the overall health of our country and the economy and that we are on the road back. And it’s not so much a worry, it’s something I pay attention to—our consumers, our viewers. What they’re watching, how they’re watching it. Having two kids who use multiple platforms for everything, to run their lives, to get their entertainment, to get their news, has been very instructive, very helpful to me. So keeping up with them. And it’s important to remember this just started five years ago, this great explosion of options and platforms. It’s something we’ve only been talking about and figuring out for five years.
Would you say ABC has a strong enough brand for your taste at the moment and how would you describe that brand?
Very much so. We look at the Disney brand every year, we conduct a tremendous amount of research to understand our brand and understand how consumers feel about it. We did the same thing with ABC. Viewers do understand the ABC brand; they understand ABC Entertainment and News as great storytellers, and companies that focus on characters, and I'm speaking probably more on the entertainment side but very rich characters, very rich storylines, very high quality and breakthrough programming. If you look back on when Desperate and Lost and Greys did, they were very fresh ideas, but whether it is a medical show or police show the take is fresh and innovative.
How do you expect American Idol to do without Simon Cowell?
I don't know, but the one thing we always know about television is it always continues to change. It has to retain the interest of the viewers.
What about authentication technology? Is that something you're looking at or would look at?
I think it's important to look at it and it's important that it's consumer friendly and consumer accessible.
So that is not among those 16 Disney pending patents, one is not an authentication technology?
How does the the AD Lab fit into that? Is that a technology play or more of conceptual measurement type idea?
Separate from Ad Lab is the CIMM group, the collection of researchers from television networks, ad agencies, broadcast, cable people who are interested in how we will measure viewing across multiple devices.
Separately Ad Lab which was really created by my group and ESPN really explores techniques in advertising, and understanding what advertising works and why and sharing those finding with advertisers we do business with.
What are the growth areas as far as technology?
We'll continue to create and use technology to help our business in a variety of ways including the ways we produce television. ... Do you remember the episode of Grey's Anatomy with the ferry catching on fire? ... It was a great example of using technology to create an amazing experience for viewers. We initially had contacted the city of Seattle and the coast guard to see if we could film -- we had this scene that Shonda wanted to do of a ferry fire and everything that happened -- and of course they said no. Our production folks figured out a green screen way to do this that is just phenomenal. They ended up shooting it at a race track or parking lot. After it aired, we got a very angry phone call saying we told you no, how did you work it out and get it past us?
It's a great example of using technology to make a great entertainment experience for the viewer.
That was more from the production studio, correct?
Yes, Barry Jossen and the team at ABC Studios.
Ok, aside from new technologies to fooling cities into believing you blew things up in their waters without permission...
Yes, that's our mission in life!
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