TV’s monumental millennial makeover

Mergers, new media fuel industry revolution

Last year proved huge for consolidation in the TV biz, but the big are poised to get even bigger in 2000.

Fueled by deregulation, rabid competition and a strong economy, the new decade will usher in a much-changed TV industry.

Consider what may transpire:

  • CBS and Viacom are set to officially merge and presumably unveil the combo’s restructuring plans, which are almost guaranteed to have a profound impact on the network TV, syndication, cable and broadcast station industries.

  • Despite GE’s denials, most pundits expect some sort of merger scenario involving NBC.

  • Barry Diller may reveal his anticipated long-range strategy for the USA Networks properties. Other non-network-aligned studios, such as Sony, may also have a few surprises up their sleeves.

  • The dot-com revolution could continue to trigger strong ad sales for the networks. Despite viewership erosion, the webs might land another record upfront market.

  • The FCC fairy could grant the networks their deregulation wish for a higher station ownership cap.

“I think anybody who believes the wheeling and dealing is over, with the possible exception of Viacom and CBS, is probably kidding themselves,” said Fox Television Entertainment Group chairman Sandy Grushow.

UPN and prod’n fates

Fallout from the Viacom/CBS merger will probably dominate the media landscape in the first and second quarters of 2000, as the fates of properties such as netlet UPN are put to the test.

Viacom has stated it would prefer to keep UPN, which smacked up improved ratings with the WWF Wrestling franchise this fall. But the weblet’s fate rests in the FCC’s hands. Viacom admits it will divest UPN if it stands in the way of the merger with CBS, but the FCC might be hesitant to kill off a broadcast network.

Also unclear to all except perhaps Viacom chair Sumner Redstone and CBS chief Mel Karmazin is how the new CBS/Viacom colossus will merge network production and syndication operations.

On the network side, what once were the separate production houses of Paramount Network Television, Viacom Prods., Spelling, Big Ticket, Rysher and CBS Prods. will now share a corporate parent.

Syndie situation

The same is true with the syndication properties, where just a few years ago Paramount Domestic Television, Worldvision, Rysher, King World and Eyemark were all independent of one another.

Paramount/Worldvision/Rysher have already merged, while King World and Eyemark will soon map out ways to share resources.

Potential merger scenarios are still no more than speculation. For example, some industry observers expect that Paramount’s syndication unit will continue to operate separately from a combined King World/Eyemark.

Just about the only industry players not freely musing about post-merger scenarios are CBS and Paramount/Viacom execs, who remain mum on the record. With the CBS/Viacom deal expected to close in the first quarter of 2000, serious change may not be evident until midyear.

Synergy scenarios

CBS and Viacom will have a chance to learn from ABC/Disney, Fox/Twentieth and Warner Bros./the WB, which all experienced executive changes in 1999 at the network and/or studio level triggered by heightened synergy mandates.

“They will undoubtedly find that there are a lot of efficiencies realized by combining operations to some degree,” said ABC Entertainment Television Group co-chair Lloyd Braun. “Or they may take the point of view that merging units doesn’t fit their business plan.

“That doesn’t mean they’re doing it the wrong way or we’re doing it the right way, it just means every company has a different set of issues to consider.”

At ABC, the first test of last year’s decision to merge its entertainment unit with Touchstone Television will come in May, when the fall 2000 schedules are announced.

But Braun calls it “foolish” to rate the success or failure of the combined ABC Entertainment Television Group based on how many Disney series end up on the network sked.

“We don’t have any expectations that we are dramatically changing the mix on our schedule by having done this merger,” Braun said. “If this year we show we were able to effectively sell to the outside and buy from the outside, we will have accomplished an enormous amount.”

All in the families?

Still, it shouldn’t come as a surprise next fall if ABC owns more of its on-air product. The same will probably be true at the WB, which has developed a tighter relationship with studio sibling Warner Bros. since the arrival of TV studio prexy Peter Roth.

And given Grushow’s dual oversight of Fox and 20th Century Fox Television, don’t expect a repeat of last year, when “Roswell” ended up on the WB rather than Fox. It’s inevitable that network and studio, already rather tight, will work more closely together.

In fact, the first real test of network TV synergy will come later this year when 20th starts renegotiating “Buffy the Vampire Slayer” with the WB. The studio has made no secret that “Buffy” could end up on Fox if WB doesn’t step up to the plate.

“If the WB comes in below market value for a show that helped establish that network three years ago, then there’s a possibility that the show might move,” Grushow said. “But that’s not our agenda. That will be a reaction to how the WB chooses to run its own business.”

Depending on outcome, the “Buffy” negotiations could have a profound effect on how network/studio siblings buy from and sell to their competitors.

Peacock speculation

Meanwhile, the last of the non-aligned networks, NBC, could too be soon thrown into the throes of corporate synergy if the buzz surrounding the possible sale of the network turns true.

At the close of 1999, GE chief Jack Welch firmly denied that NBC was for sale. But the Peacock may be too tasty a dish not to be consumed by some hungry media conglomerate.

“We’re one of the last open pieces, but I don’t know what the future will end up holding,” NBC Entertainment prexy Garth Ancier said. “I’m sure at some point there will be some combination, but it will be up to Jack Welch or his successor.”

As the top-rated network among key demographics and owner of two strong cablers, NBC still looks like a fine purchase for a company looking for distribution or programming.

Web, shows aid webs

It’s also not a bad time to be in the network TV business. Despite premature reports of their demise, the broadcast nets head into 2000 riding high on an unusual wave of recent good fortune.

Pundits predict another strong upfront season. The success of “Who Wants to Be a Millionaire” proved that viewers will still flock to primetime network TV. A number of frosh dramas have likewise clicked with audiences.

And in the biggest irony of 1999, rather than putting the old medium of television out of business, the new media (through the seemingly unending dot-com boom) has actually proven a godsend, creating a strong ad market at the webs.

“You’ve got an awful lot of people out there with an awful lot of money trying to build businesses,” Grushow said. “The only way to do it is by buying network television.”

Said CBS Television president and CEO Leslie Moonves: “The economics are better than they have been in four or five years. The economy is great, the advertising revenue is just terrific. Three years ago people were predicting the demise of the networks a bit prematurely.”

Word of caution

But given the volatility of the new media world, Ancier takes a more cautious view of where network TV economics are headed.

“I don’t think you’re looking at a long-term turnaround,” Ancier warned. “We’re living in an extraordinary set of circumstances. It’s a remarkable sales market right now. Obviously that’s not going to last forever.”

Plus, the verdict’s still out on the long-term effects of new media and technology on television viewing. Gizmos such as the personal video recorders marketed by TiVo and Replay, already causing a stir in 1999, could very well explode in 2000.

Satellite programmers such as DirecTV may also make a greater impact in the new year now that local signals will be available in most major markets.

And the Internet continues to mature and perhaps even steal eyeballs away from television. With viewers distracted by so many advances, the network dinosaurs aren’t safe from extinction just yet.

Crystal ball, anyone?

“There’s no better way to reach a mass audience than through broadcast television,” said DreamWorks Television head Dan McDermott. “It’ll still be true five years from now — but beyond that it’s anyone guess.

“It’s very possible that broadcast television will end up as a specifically 20th century phenomenon. But I don’t claim to know the answer.”

The good news for broadcasters is that audience erosion has stabilized a bit this season. Year to year, only Fox has seen serious declines. In homes, CBS, ABC and the WB are down slightly, while NBC and UPN are up vs. last fall.

But that doesn’t mean the bleeding has finally been stanched.

“You’re seeing the audience saying very clearly, ‘I have a lot of choices with what I do with my time, and when I watch TV I’m not going to waste my time with mediocre product,'” Ancier said.

With the era of viewers settling on the “least objectionable programming” long over, the networks are at a crossroads in terms of how they schedule primetime.

‘Millionaire’ mania

The sitcom genre hit rock bottom in 1999, while gameshows and wrestling found new life.

But although viewers flocked to “Millionaire” and demonstrated the drawing power of network TV, industry execs (with the exception, of course, of ABC) expressed dismay that the show causing waves wasn’t a traditional effort.

“I’m heartened in that clearly it’s possible to create programming that galvanizes the country,” Grushow said. “I’m disheartened in that it’s a gameshow that’s ultimately been able to do that. All of us would like to believe that scripted drama and comedy is something that could have a similar impact on a week-in, week-out basis.”

Nonetheless, that’s not stopping other nets from jumping on the bandwagon: The post-“Millionaire” gameshow onslaught has already began with NBC’s “Twenty-One,” CBS’ “Winning Lines” and Fox’s “Greed” all joining “Millionaire” as regular series this month.

Besides the “Millionaire” phenom, viewers flocked to dramas such as CBS’ “Judging Amy” and NBC’s “The West Wing.” Despite all the hype about “edgy” series such as Fox’s “Action” or youth-obsessed skeins like ABC’s “Wasteland,” the mainstream won out in 1999.

“It’s a year of traditional solid storytelling,” Moonves said. “It’s more relatable. Americans are embracing people like themselves who are dealing with the same problems as themselves, as opposed to the off-center things like ‘Action.’ ”

‘Sopranos’ hits high note

The one exception would be the real creative story of the year, HBO’s “The Sopranos.”

The unconventional Mafia drama, from creator David Chase, wowed TV critics, viewers and even rival webheads with its darkly humorous storytelling and richly conflicted characters.

In 2000, the networks will take another stab at reviving the sitcom genre while also attempting to place more families, and even more crucially, minorities, on the small screen.

And then, of course, there are those gameshows.

“I hope there aren’t a million more shows like ‘Who Wants to be a Millionaire’ on the air,” UTA agent Martin Lesak said. “But I don’t think there will be. The networks will go back to what it’s all about, which is creating original entertainment.”

If 1999 proved anything, it’s the old adage that there are no certain truths in the unpredictable world of television.

Who would have predicted the success of “Millionaire” or “The Sopranos”? That the young, hip veejays of MTV would share a corporate parent with the “Touched by an Angel” seraphim?

“I personally believe that the public wants programs that are distinctive,” Braun said. “They want the next ‘Practice,’ the next ‘Drew Carey,’ the next ‘Seinfeld’ and the next ‘Millionaire.’

“But those great ideas don’t come in every day. The key is not to be scared off when you’ve given a couple of them a chance and they didn’t work.”

(Josef Adalian contributed to this report.)

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