Kay Koplovitz, founder, chairman and CEO of the USA network, gets really annoyed when she hears industry pundits proclaim that MCA/Universal is suffering a horrible handicap by not owning a broadcast network like its major-studio rivals Disney, 20th Fox, Paramount (with the fledgling UPN) and Warner Bros, (the brand-new WB network).
From Koplovitz’s standpoint, Universal need look no further than USA -of which it owns 50% (Viacom has the other half) – as a national distribution outlet for its movies and TV series. UPN and WB are elbowing each other in the press for the designation of fifth network, but “we’re the real fifth network,” she says.
There are a number of factors that Koplovitz points to in making her case:
* By the first quarter of next year, USA will be available in 70% of U.S. households, making it a significant player in the TV landscape, Koplovitz says. And when the year 2000 rolls around, she’s predicting that USA’s TV-household reach will be “north of 80%.” These figures place USA close to parity with UPN and WB, and USA runs programming 24 hours a day compared to a handful of hours a week for the greenhorn broadcast networks.
* USA is spending a record $140 million for firstrun series scheduled during the 1995-96 season, drawing on top network suppliers that include John Landis, Brandon Tartikoff, Stephen J. Cannell and Gary Nardino. This figure doesn’t take into account the $50 million-plus USA ponies up in license fees every year for two dozen or so original movies. Rod Perth, the former CBS programmer who joined USA less than a year ago as president of the entertainment division, is spearheading the firstrun effort.
* Even though it doesn’t possess such high-rated event programming as the Sunday night NFL football games on ESPN and TNT and live coverage of the O.J. Simpson trial on CNN and Court TV, USA’s primetime schedule has solidified itself as a consistent first-place finisher in the cable universe over the last few years.
Among its primetime highlights, USA runs more recent big-grossing theatricals than any other basic-cable network, it airs the highest-rated off-network series in “Murder She Wrote,” its “Silk Stalkings” is the most popular firstrun action hour, and two of its staples are freshly produced boxing and wrestling matches every week.
While the continued care and feeding of primetime, particularly with more original series, is the main programming priority of USA, Koplovitz says she has beefed up the development budget for the daytime lineup. King World, for example, is working on a talkshow featuring Justin Gunn, a reporter for its syndicated magazine strip “Inside Edition,” and Group W is developing a San Francisco-based youth-oriented talkshow to be hosted by Paget Brewster.
And, since “counterprogramming is the heart and soul of USA,” as Tim Brooks, USA’s senior VP of research, puts it, the network will start stripping re runs of “People’s Court” and “Love Connection” between 1 and 4 p.m. this October while the broadcast networks are scheduling soap operas, and TV syndication is awash in talkshows.
USA is among the five most profitable cable networks in the business, generating an estimated cash flow of $140 million for calendar 1995 on net revenues of $500 million, according to Paul Kagan Associates. Kagan’s 1996 projections for USA are $180 million in cash flow on $591.5 million in net revenues. But USA’s programming expenditures are also shooting up, from $260 million this year to $300 million in 1996.
Koplovitz says USA’s subscriber count has jumped 7% so far this year, to more than 65-million homes. It gained 957,000 subs in the second quarter alone, way over forecasts, she says.
Koplovitz attributes a lot of the growth to “the opening of the marketplace” by two new direct broadcast satellite distributors, DirecTv and Prime-star, both of which transmit USA and its young sibling the SciFi Channel to dish owners.
Other sources say that the cap on monthly cable bills instituted by cable reregulation has lured new bargain-hunting subscribers. But legislation out of D.C. expected later this year could overturn those regulations and lead to a new round of rate increases.
Koplovitz created the USA network in 1980 out of a partnership of the original Madison Square Garden network and UA-Columbia Cable. Fifteen years later, she still radiates competitive fire.
“I love the fact we’re going to be in 70% of the country early next year,” she says, “but I’m really not going to be satisfied until every home in America can turn on the set and pick up our signal.”