Since the mid-1980s, cable mogul Ted Turner has longed to own a major broadcast network, making fruitless stabs at CBS and NBC. But as the Big Four networks continue losing viewers and gushing cash, some Turner properties are becoming a new sort of Must See TV. And that feat reflects the effectiveness of a programming strategy that’s extraordinary in scope and cost–and in risk. TNT and TBS, the two largest channels run by Turner Broadcasting Systems (now owned by Time Warner), have gone on an unprecedented buying binge, spending at least $750 million so far for the future TV premiere of hit movies like “The Matrix” and “The Mummy.” They’ve shelled out hundreds of millions more for rights to rerun most of television’s hottest sitcoms and dramas of the 1990s, including “Seinfeld,” “Friends” and “ER.”
Turner’s networks are also investing in their own original movies, which are some of television’s flashiest. “Pirates of Silicon Valley,” about the rise of Bill Gates and Steve Jobs, will air on TNT on June 20. Add to the mix weeknight NBA and World Championship Wrestling, and it’s clear Turner is reaching for a broad audience. He has a long way to go. But he’s following a blueprint borrowed from broadcast networks, a far different model from typical cable channels like MTV or the Food Network, which target tiny slices of specific kinds of viewers. “[Turner isn’t] playing into a strategy of creating a niche,” says ad executive Chris Geraci of BBDO. “They are going for a mass audience.”
Turner is best known as the father of CNN, but his flagship TBS is older and larger. He launched it in 1976, serving up Atlanta Braves games, wrestling and old movies to a nationwide audience. Back then, the blue glow of NBC, ABC and CBS lit virtually every living room; cable was mainly a way to boost reception of the Big Three’s signals. In 1988, Turner created TNT, filling it with MGM movie classics, reruns and, shortly thereafter, pro football and basketball games. But in the early 1990s, he acquired the fuel to begin supercharging those channels by scooping up New Line and Castle Rock studios to supply them new movies. In a brief interview, Turner called the move a major development in the company’s evolution. The deals were, in fact, a daring strike at the networks, which had held a lock on premiering box-office hits on TV.
Turner vastly escalated his strategy of best-movie-theater-on-television strategy around the time of the 1995 sale of his company to Time Warner. As part of a vertically integrated media empire, he gained financial muscle and access to hits from his new corporate kin, Warner Bros. So in a bold display of power, he began the expensive buying spree that dislodged an entrenched Hollywood business practice. Before Turner stormed in, the town would sell to the Big Four exclusive rights to premiere the latest box-office hits years before basic cable could.
Of course, purchasing today’s hits, like “Matrix,” still means you won’t see it for years to come on TNT or TBS. That’s because of the food-chain-style distribution system in show business. It has to go first to home video, then to pay-per-view, linger on premium services like HBO, et cetera. Some hits of recent vintage–“The American President,” “Dumb and Dumber” and “The Shawshank Redemption”–have made it through to Turner and now play in heavy rotation, drawing high ratings. This year TNT and TBS are set to premiere 25 newer movies–from the artsy Oscar winner “The English Patient” to the action-packed “Batman.” Rivals feel envious. The Turner networks remain the ones “to beat on basic cable, whether it’s Ted’s absolute movie-buying dominance, the sports properties or the number of original Class A movies,” says a top NBC executive.
Turner’s aggressiveness is paying huge dividends. In the TV season ended last week, TBS drew an average of 1.4 million households, a 12 percent gain from last season. It saw a 10 percent jump in viewers advertisers most prize, 18- to 49-year-olds, placing TBS third behind Barry Diller’s USA Network and TNT, the top cable channel with that coveted segment. Like all cable outlets, TNT’s and TBS’s numbers still fall far short of the ratings for even a weak Big Four program. But the surge shows why advertisers are flocking to cable, which now controls on average 40 percent of the television audience, almost double its share in the early 1990s. As a result, cable channels are winning a growing share of ad dollars: their revenue will jump $2 billion, or 30 percent, to $8.6 billion in 1999, says Joe Ostrow, CEO of the Cabletelevision Advertising Bureau. At Turner, even the down numbers have a hidden upside. In the season just ended, TNT suffered a slight ratings drop, but Turner officials blame that on the absence of pro football. It cost them viewers but saved the bottom line. Last year Turner opted out of the bidding for NFL games. Among the winners, ABC will post a huge loss this year due to NFL costs. Meanwhile, Turner’s overall cable operations are firmly in the black, with 1998 pretax earnings of $506 million, a 35 percent jump from 1997.
So what more can Turner do? His rivals fret the worst. “Ted will spend and spend,” the NBC executive declares. And so he is. Recently, TBS and TNT grabbed up “Stepmom,” “Rush Hour” and “Lethal Weapon IV”; just last week, they bagged “Life” as well as “The Mummy” and others. Similarly, Turner is stockpiling TV’s hottest dramas (for TNT) and sitcoms (for TBS) to air in rerun. Since late 1995, he has hoarded “Seinfeld,” “Home Improvement,” “Everybody Loves Raymond,” “The Drew Carey Show,” “Fresh Prince of Bel Air,” “Law & Order,” “The Pretender” and “ER.” The idea, as with movies, is to bolster prime time and lure advertisers’ favorite targets, young upscale viewers. And if that fails, Turner can always continue to monkey with the schedule.
I Want My Ted TVOriginal programming:Movies:Sports:Syndication:
