WB, Par Weblets Square Off

Michigan J. Frog, the mascot for Warner Bros.’ WB Network, could be seen as an ominous symbol for a new programming service looking to attract a big audience.

The frog, faithful cartoon viewers will recall, sang for only one person: The construction worker who had the misfortune of finding him. Every time the guy tried to cash in on the frog’s talents, it would only croak, driving its owner into bankruptcy and insanity.

WB Network chief Jamie Kellner and Time Warner chairman Gerald Levin are betting that they aren’t the only ones who will hear the frog sing when the WB Network premieres on Jan. 11 with two hours of programming.

Launching their own frog at the same time are Paramount and Chris Craft with the United Paramount Network.

Both networks are starting small, with big ambitions. WB will run one night of programming initially while UPN launches with two nights. Both hope to add at least one more night within the next two years.

While both cite underserved audiences as their motivation, the real force driving these two upstart webs is a changing regulatory environment that allows the Big Three networks to produce and syndicate more of their own programming. Creating their own networks is a way for Paramount and Warner Bros, to ensure that their product gets a home.

On the programming front, WB is betting on comedy to get its network off the ground while UPN is being built around “Voyager,” the latest entrant in the $2 billion-plus “Star Trek” enterprise of films, TV shows and merchandising. In an uncertain business, another “Trek” spinoff stands a good chance of being an instant hit, following syndicated predecessors “The Next Generation” and “Deep Space Nine.”

Advertisers and WB execs say its four comedies, which launch Jan. 11, push the envelope. The upstart network is going after the 12-to-34 audience with “The Wayans Bros.,” “The Parent Hood,” “Unhappily Ever After” and “Muscle.”

“There is a uniqueness to our programming not seen on TV before,” promises Kellner.

Conversely, United Paramount is relying on familiarity to drive its network. UPN, focusing on men in the 18-49 age group, is headed by former Fox Broadcasting chairman Lucie Salhany, whose recently appointed staff of top execs has been putting in 15 to 18 hours a day preparing for the Jan. 16 launch of the service. It will consist of four hours of programming over two nights.

On Mondays, UPN will carry “Voyager,” which will be followed by two sitcoms: “Platypus Man” and “Pig Sty.” The following night, UPN will offer two hourlong series, “Marker” and “The Watcher.”

WB is playing it safe with advertisers, offering a 3 share for a guarantee and keeping plenty of inventory for make-goods if it underdelivers. Media buyers say the net is averaging about $25,000 for a 30-second spot.

Salhany is keeping mum on ratings guarantees, but Madison Avenue sources say UPN is pledging a 7 share-a “Voyager” spot going for $110,000 to $115,000 and the other series garnering $45,000 to $50,000.

Instead of offering make-goods, which networks typically employ, UPN is understood to be promising refunds if it fails to hit its ratings goals-an approach commonly used by syndicators.

While both networks are expected to lose money initially, the advertising market is strong enough right now to support their launches. The real question of survival will likely come in two years, when they try to expand.

As for their affiliate lineups, UPN boasts the stronger batch of primary affiliates, reaching 80% of the country. About 72% of the coverage comes from primary affiliates that will air the shows in pattern-meaning at the same time-on Monday and Tuesday nights, according to Salhany.

But UPN also is being carried by secondary affiliates that won’t clear programming in pattern and will be unlikely to expand beyond two nights of programming as the network grows.

No secondary affils

Warner Bros, has about 45 stations that reach 55% of the U.S., but it has no secondary affiliates. Many of WB’s primary affiliates in medium markets are new stations that have not yet established themselves. Kellner is betting that WB, like the Fox network several years ago, will put new stations on the map.

WB also is relying heavily on cable for its success. The network is using Tribune’s super-station WGN to reach 25% of the country, bringing its total reach to 80%. That’s a move that has some media buyers concerned.

“The difficulty for the WB Network is its reliance on WGN. That is a big drawback until they get their first ratings numbers,” says an ad agency exec.

Kellner insists the use of WGN is only a short-term solution for the weblet. In two years, when the programming lineup expands, WB will go to cable operators to create local channels for the service in markets too small to support a new broadcast channel.

“The cable industry plays a role in the next network,” says Kellner. “To not address that in a business plan is a mistake.”

Time Warner’s own cable holdings will likely play a big role in creating channels for the WB net, and Kellner has met with other operators to discuss the formation of local channels.

If WB proves that WGN can deliver ratings for the service, then the creation of local cable channels as affiliates won’t seem so far-fetched to media buyers.

Longterm matters

“The WB Network is building a national distribution system to cover 90% of the country,” says Renaissance Communications chief executive Mike Finkelstein. “If Paramount’s ambitions are to do four hours of programming, then secondary affiliations are nice. But if their goal is seven nights, the secondary affiliates won’t matter.”

Renaissance’s Miami and Dallas stations are now designated WB affils.

Salhany disagrees, saying UPN’s current lineup of primary affiliates will permit the service to expand to three nights within 18 months, or possibly sooner. But there is still a question of reliance on secondary affiliates, especially at a time when the Big Three are going to start cracking down on programming clearances.

WB affils have contracts ranging from two to five years, Kellner says. Salhany won’t discuss the length of UPN’s contracts, but station sources say they run about three years.

Under the WB plan, when stations start to show growth with WB programming, they will share the additional revenue with the studio.

“The principle has been totally misunderstood,” says Finkelstein. “If WB does not perform, I don’t pay. We only share the increased ratings the network delivers.”

Kellner is optimistic that WB will start seeing reverse compensation from stations by year two, when the service is expected to have at least two nights of programming as well as a morning block of kid’s shows.

UPN is taking a more traditional syndication approach, withholding national barter time in each show and allowing stations to sell the remaining time. They are also encouraging double runs of their shows, an other syndication ploy.

Both netlets are planning to deliver their ratings to advertisers the same way the Big Three and Fox do. Results will be available the following day and bunched on Tuesdays with the others.

Salhany says UPN is working with Nielsen to decide how to handle the double runs of “Voyager” in the national ratings. All the primary affiliates and a large contingent of secondary affils will be required to air the second weekend run, thereby boosting the show’s gross rating average (a syndication approach that takes into account duplicated viewing of the original and repeat).

Eventually, UPN hopes to extend the practice to other shows, according to Salhany.

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