ET: The business behind the buzz - Broadcasting & Cable

ET: The business behind the buzz

Entertainment Tonight, with satellite help, went from 'inconsequential' to money machine
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When Entertainment Tonight
began 20 years ago, it tore through four executive producers in one season and switched talent twice in the first month. It expected stations to have a satellite dish—no given in those days—just to pick up the show. It should have gone the way of so many of the flash-in-the-pan celebrities it has covered.

Instead, ET has spawned copycats and become a brand name for celebrity news. It has also become a money machine, making as much as $90 million to $100 million a year in profits.

"We'll all take a show that makes that kind of money over 20 years," says a rival syndicator.

Now in 179 markets, ET
has become one of Paramount Television's most valuable assets. It's a syndicated series that isn't slumping in the ratings, earns ad dollars rivaling network hits and is cleared on many stations through 2009. Paramount TV Group Chairman Kerry McCluggage says ET
"is clearly one of our top money-earning shows."

There's even talk of creating ET
spin-offs and funneling the show's content into a new cable network.

It's true that ET
may take the average Hollywood premiere as seriously as The New York Times
considers the United Nations. ET
correspondent Leonard Maltin recalls the scoffing he endured years ago "at the sheer triviality of doing something that seemed so inconsequential."

But no one's scoffing now; show-business news is a hot commodity, and ET
helped define the genre.

For ET, big news is stories like actor Ryan O'Neal's cancer diagnosis, model Niki Taylor's car accident and Robert Downey Jr.'s drug arrest. ET's
coverage of those stories was so authoritative that the Associated Press credited the show in its own reports.

THE BIG LEAP

Paramount's new president of programming, Greg Meidel, began his TV career selling the show's inaugural season, in 1981. Station executives were skeptical. So when he'd make his pitch to general managers, he'd plop down piles of celebrity-themed magazines to prove the market was there.

He had another ace up his sleeve, as well: ET
would be the first day-and-date syndicated effort ever attempted, the first syndicated show to send its programs via satellite to stations every day.

At first, "we actually didn't know how we were going to do it," admits Meidel, who used the tech-heavy NAB convention in 1981 to woo clients, "giving them background info on whom they should see to buy or lease a satellite dish."

But then Paramount had a bold idea. "What we did is promise stations free satellites if they signed up for ET," says Meidel. "I remember sitting in a meeting where we were going over what our options were and we realized that satellite was the only feasible way."

Paramount handed the satellite chores to Wold Communications. Bob Wold, who then ran the pioneering satellite services company, says he became the "Johnny Appleseed" of satellite communications that summer, installing dishes at stations for Paramount's ET, as well as for Metromedia's Merv Griffin Show.
Having most stations equipped with dishes "enabled a whole new genre of syndicated programming," Wold says. "They never had a way of offer day-and-date programming before."

Within a year, Wold says, his company was distributing 20 hours a day of syndicated programming via satellite.

ET
was not an easy sale, even with free dishes. "The majority of the stations at the time," Meidel remembers, "thought this was going to be the biggest white elephant that they had ever seen."

But, by the beginning of the first season, he recalls, about 75% of the stations signed on across the country had agreed to the satellite dish. The stations that licensed ET
but didn't want a dish made arrangements with other stations to downlink the program on a daily basis.

Before immediate video delivery by satellite, "syndicators never got a premium for any of their show inventory, even for a high-rated show. That's a big point," Meidel says. "So now we could sell the same way a network sells advertising time."

Meidel fondly recalls "that first day waiting for that first show. I was in the Dallas market, sitting there waiting to make damn sure that it showed up on the screen. We were just so excited the next morning. We were toasting the production team. Everything worked like clockwork!"

Well, not quite. It's easy to forget that, when ET
debuted, its hosts were soap star Tom Hallick and former Miss World Marjorie Wallace, who didn't last long.

"I remember the first season; it was extremely iffy whether the show was going to come back," says Frank Kelly, past co-chief of Paramount's syndication division, who was then a programming executive for Paramount.

It wasn't just Viacom that gained when ET
prospered. Paramount owned the show with partners Cox Broadcasting and Great American Broadcasting, but, in the past decade, the studio took full ownership.

Paramount shelled out $225 million to $250 million in 1997 for Cox Broadcasting's 50% stake in the show, according to sources. And, in 1992, when Paramount paid $25 million to take Great American Broadcasting's 20% piece of ET, "that paid for itself in two or three years," McCluggage says.

MAKING IT WORK

Eventually, the show hit its stride, in large part because of co-hosts Mary Hart, now a 19-year fixture with the program, and Ron Hendren. Current co-host Bob Goen, in place for five years after a multi-season run by John Tesh, has helped keep ET
cruising. Past producers Vin Di Bona, David Nuell and Jim Van Messel were also strong, illustrated by their later jumps to create America's Funniest Home Videos, Extra
and Access Hollywood, respectively.

For Hart, a turning point for ET
was when The Nightly News' Tom Brokaw gave ET
credit for news footage shot inside a courtroom in 1983, when two children were accidentally killed on the set of The Twilight Zone
movie. "Suddenly, it became something that was national news," Hart recalls. "We were the only ones who had the footage. We had
credibility in the eyes of not just the public but everyone in the business."

Advertisers have latched on, too. Howard Nass, TN Media senior vice president/director of local broadcast, considers ET
a "must buy" for his entertainment-oriented ad clients, including companies in the film, music, fashion and fast-food industries.

Also impressive, he adds, is that ET
is staying solid when many other high-profile syndicated series are slipping. In the current season through April 29, ET
averaged a 3.0 Nielsen household score in adults 18-49. That's the top position among all first-run programs and a 3% improvement over 2000's comparable period. Looking at the same season track, Nass points to the declining Judge Judy
(down 17%), Rosie
(down 19%) and Hollywood Squares
(down 16%).

ET
usually scores double the household numbers of its nearest competitors, Extra
and Inside Edition,
both of which cover more than show business. But ET
is likely looking over its shoulder at Access Hollywood, its closest match in terms of content. Access Hollywood's average performance in key NBC O&O markets regularly tops ET's average score in the same cities. (In many other markets, Access Hollywood
airs out of the access period and normally grabs modest 2.0-level national ratings.)

Access Hollywood's new distributor, NBC Enterprises, won't continue Warner Bros.' inducements to pick up the show and run it in the 7 p.m. to 8 p.m. daypart. (Warner offered to pay for the syndicated series Access Hollywood
would replace on a station's schedule.) But NBC syndication chief Ed Wilson has promised to be just as aggressive in securing better time slots in hopes of hiking its national ratings.

Last year, Entertainment Tonight
snagged $140,000 to $165,000 for a 30-second spot. That's just below top off-net sitcoms like Friends
or Seinfeld
and above somewhat older-skewing Oprah, Wheel of Fortune
and Jeopardy. That rate is also up there with network series like NBC's Third Watch, Fox's Boston Public
and CBS'JAG.

According to sources, ET
brings in $150 million a year, about half in license fees and half in advertising. Given a production budget of approximately $900,000 a week or around $50 million a year, Paramount nets between $90 million to $100 million a year.

ON THE BEAT

"There is a reason why other shows don't have good access time slots," says ET
Executive Producer Linda Bell Blue, who has worked in local news at several outlets, including KRON-TV San Francisco, and logged time as the executive producer of Hard Copy, too. "I think we have a far stronger production."

In her opinion, "the show is far newsier than it used to be. That is in my blood. The breaking-news days are the ones that we live for."

Realistically, she says, "breaking the story of Jerry Seinfeld's baby is not as important as an air crew being held in China. But, to many people, it is as interesting."

Some, particularly in show business, see ET
as a little too aggressive. One Hollywood antagonist who works for a rival TV magazine sniffs, "These people are from Hard Copy. When you come from that mentality, where do you think this show will end up going? We get calls daily from their producers, talent who want to work here because they can't stand it there."

Of course, you're dealing with delicate egos and high-powered public-relations agents and managers who don't need much to be offended. In March, the Los Angeles Times
printed a letter to the editor from actress Melissa Gilbert damning a "Whatever Happened To?" story that ETWeekend
did. She found the piece "extremely offensive and inaccurate." Gilbert complained that ET
plugged in an old interview of her speaking about her Little House on the Prairie
days.

ET
producers stand by the accuracy of the story, saying, "It is important to note" that the show tried, in vain, to get Gilbert's publicists to cooperate.

Still, most ET
pieces don't hurt. "People want to be on Entertainment Tonight," Blue says. "If the people who called me every day lined up outside this building, they would go around this lot."

Gary Considine, executive producer of NBC Studios, which creates Access Hollywood, points out, "Look, if you're a publicist in this town, you'd be crazy not to do both shows."
But Access Hollywood's "storytelling is far superior to ET's," says a source from an ET
rival. "Studios know it. TV networks know it. Personal publicists know it. While [ET
is] doing stories on the Kennedys, Jon-Benet Ramseys and Anna Nicole Smiths, Access Hollywood
is the guide to Hollywood. That's their niche."

Troy Nankin, senior vice president of talent at BWR public relations, says, "ET
does usually get the best placement" when lining up to interview celebrities arriving at award shows, "but I talk to both of them."

Admits another top talent manager, "The reality is that we're all in bed with each other. So nobody can tell anyone to f ____ off. I need them. They need me."

FAMILY TIES

The trickier relationship may be between ET
and its parent, Viacom, which has its corporate hand in everything from CBS to UPN to MTV to Howard Stern, and in Showtime and Paramount's television and movie businesses. Likewise, Access Hollywood
is run by a unit of NBC and has a history with Warner Bros.

"Access Hollywood
is all over the NBC shows," notes one source. "You have to go to Access
first with any NBC show" like Friends
or ER.

TV insiders point out that, during this spring's Thursday-night showdown, ET
played up Viacom-produced Survivor: The Australian Outback
(it did have original Survivor's Richard Hatch as its exclusive correspondent), while NBC's Access Hollywood
chose instead to drum up Friends.

And, in February, some observers thought NBC's Access Hollywood
delved deeper than ET
into Stacey Stillman's lawsuit against CBS'Survivor.

When the news broke in early February, according to program transcripts, Access Hollywood
went twice as long as ET
on stories about Stillman and her allegations that the first installment of Survivor
was rigged. But, as the lawsuit gained momentum throughout the month, coverage on both shows appeared similar in length.

Blue also reportedly caught flak for under-reporting Nicole Kidman's miscarriage, bowing to pressure from Paramount film executives, who reportedly wanted only good buzz for the upcoming Kidman movie Vanilla Sky. But Blue dismisses the idea that her corporate bosses influence her judgment. "No one ever tells me what to put in this show or what not to put in this show. No one puts pressure on me, period."

In fact, "there are times when we get really steamed because Paramount will go with The Today Show
or Good Morning America
instead of us," says one source close to ET, referring to times when they've lost juicy Viacom-originated stories to shows produced by outside companies. "But the same thing is true when Warner Bros. gives the bigger story to us instead of Extra."

COMING NEXT?

Meidel looks at ET's
profitability after 20 years as incentive to expand it into the cable world, beyond its current strip and weekend forms, and dreams of an ET Kids
on Viacom-owned Nickelodeon and of "having the next Mary Hart and Bob Goen, 8 or 10 years old, hosting a show about entertainment stories kids love."

But ET
is late to the cable arena. In the early 1990s, E! made a name for itself with celebrity-info programming such as The Gossip Show
and E! News Daily
precisely what ET
has been doing all along. Yet, curiously, Paramount's parent company, Viacom, the owner of a slew of cable outlets, has never launched an entertainment-themed network.

"Better late than never," says Meidel, who is eyeing the growing digital spectrum as a new place to get ET
out to viewers. "I think there is room for another entertainment channel with a different spin."

The project "could be a huge resource in repurposing our library down the road," he adds, noting ET's colossal tape vault, which includes such gems as the first television interviews with Julia Roberts and Jennifer Lopez.

Even if Meidel is getting ahead of himself, ET
is in solid shape. It's secured in several of the top 20 markets through 2009, and, altogether, the contracts for the show "go out further than for any other first-run syndicated television show," says Paramount Domestic Television President Joel Berman.

ET
is locked up in 70% of the U.S. through 2004-05 and in 50% through 2005-06, he boasts. "Stations have come to understand that Entertainment Tonight
is forever. It seems resistant to various changes in the business."

Co-host Hart isn't going anywhere, either. After being with the show for nearly 20 years, she laughs that she still "analyzes the overnights in every market," doing extra radio interviews and customized promos in cities where the show is struggling.

In fact, reading news about the fates of television series convinced her that she is in a good spot. She once harbored dreams of starring in her own sitcom, but, after reporting "on all those shows that were on for five or six episodes and then, boom, they're gone," she has concluded that it's better to read about the stars than to become a flash in the pan. ET
has reported on quite a few of them over the past two decades.

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