Economy exacts high price on No. 1

Stations’ ability to continue producing quality programming in a struggling economy has led to concerns about viewer rebellion. The question arose yesterday at a NATPE panel sesh titled “Can You Afford to be No. 1?”

Post-Newsweek Stations prez-CEO William Ryan said he is worried about the impact that cheaper programming will have on viewers.

Ryan said his broadcast group “never made any choices not to be No. 1 in any time period–yet.”

Still, he noted that he’d been forced to look at his cost structure and decided he could not afford to renew some good shows.

King World prez-CEO Michael King called partnerships between syndicators and stations important to their success in the future. He noted, however, that economic problems killed an earlier attempt by the syndicator to form an R&D network of stations to test new programs.

Despite indications the economy is improving, stations complain that business is still slow in the first quarter and broadcast exex remained concerned about the bottom line.

Against that backdrop, King shocked some of those in attendance by claiming that no station ever failed to renew one of the distrib’s shows because it cost too much.

When a general manager in the audience told King that his station had indeed let a KW show go because of the price, King pleaded ignorance. “I’m not in sales ,” he quipped.

NBC affiliate board chairman Jim Waterbury, general manager of KWWL-TV in Cedar Rapids/Waterloo, Iowa, jumped to King’s defense. He acknowledged that he had made a “bad decision” by failing to renew “The Oprah Winfrey Show,” which KW took to another station in the market.

The price of a renewal can be expensive. When he’d appeared at a separate panel session here, AndyFisher, exec VP of Cox Broadcasting’s network affiliated stations, said KW typically projects how much advertising revenue a station will generate from “Oprah” and includes that in the license fee.

Although stations fail to make any profit on the show, “Oprah” is so strong in early fringe that it can boost the stations’ evening news–a primary profit center. The strategy led KW to reap an astronomical $ 180 million in gross revenues on the talkshow last year.

Waterbury sees more stations that “are afraid to be No. 1 in their markets” because it can be more profitable to finish second.

Naturally, King disagreed with stations that take that tack, calling it an “extremely dangerous” philosophy. “Winning is infectious,” he said.

With the cable universe about to rapidly increase to 150 and, eventually, 500 channels, King emphasizes that it will become a business of “haves and have nots ,” in which the top stations will take the prize.

In this expanding channel universe, Viacom Intl. prez-CEO Frank Biondi Jr. noted that Congress’ passage last year of the cable re-regulation act will mean that no one else will enter the ad-supported basic cable network business that USA and TBS now own.

That is good news for the two cable webs as well as the broadcast networks, but Biondi warned that emerging channel compression technologies and the entrance of the telephone companies into the business will cause an avalanche of pay-per-view options that could further weaken their grip.

For the time being, however, the networks are simply focused on more immediate matters such as ratings.

ABC Entertainment prez Ted Harbert said it would be easy to make mistakes if the webs gave into the press’ obsession with the who-is-No. 1 syndrome.

Harbert also objected to those who automatically associate quality shows with low ratings. “Roseanne,””Home Improvement” and “Murphy Brown” prove that there are quality series attracting strong numbers, he said.

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