Despite ratings woes, broadcaster hanging tough

The bluster about MyNetwork TV being “profitable from Day 1″ ceased shortly after the first ratings reports rolled in last year.

The primetime program service cobbled together by News Corp. last year in the wake of the CW merger announcement has nowhere to go but up in its second year, after bombing in its debut last fall with a risky strategy of airing two hours of low-budget telenovelas six nights a week.

This season, MyNet is still adjusting to the 180-degree turn it took last spring in replacing the woefully low-rated nighttime serials with a patchwork quilt of nonscripted programs (i.e. “Celebrity Expose” and the “Cops”-like “Jail”) and movies.

The ratings on a national basis are still not pretty — less than 1 million viewers for most of its programs — but the fact that neither News Corp. nor its station affiliates are prepping to bail out en masse on MyNet speaks volumes about the peculiar state of the local broadcasting biz.

“We have never seriously considered dropping MyNetwork,” says Mark Antonitis, prexy and general manager of the net’s San Francisco affil, Young Broadcasting-owned KRON-TV. “Anybody who thought a new network would come out of the gate as a huge success is naive. It takes time. We look at it this way: Fox is an organization that has a history of success, and it has the resources and the patience to be successful.”

In short, most of the stations affiliated with MyNet don’t have viable alternatives in primetime. Dramatic changes in the local television landscape during the past 15 years have left broadcasters who once proudly billed themselves as “independents” reliant on their association with a national network imprimatur in order to have any traction with viewers and, more importantly, advertisers.

In the view of some MyNet affil owners, a go-it-alone strategy in primetime would be more costly and pull ratings just as weak, if not worse. It makes more sense to hang in with one of the world’s largest media companies, a company with a track record of sticking by its startup TV ventures.

News Corp.’s experience with MyNet during the past year stands in contrast to its recent launch of the Fox Business Network cabler. The differences in the two startups illustrate the challenges facing mid-tier local broadcast TV stations in a multichannel age — even for well-heeled outlets like News Corp.’s MyNet O&Os, a list that includes WWOR-TV New York, KCOP-TV Los Angeles and seven other stations News Corp. acquired from Chris-Craft Industries in 2000 for $5 billion.

Like Fox Business, MyNet was shepherded at the outset by master programmer Roger Ailes, chairman of Fox News and Fox Television Stations. MyNet was born in the shadow of the surprise January 2006 announcement that the WB Network and UPN would merge into a single netlet, dubbed the CW. That deal promised to leave News Corp.’s erstwhile UPN affils without any primetime programming.

In the scramble to get MyNet up and running, Ailes and his Fox Television Stations deputy Jack Abernethy seized on an experiment with telenovela-style strip serials that Fox’s Twentieth Television syndication arm (which Ailes oversees) had planned for latenight on some Fox O&Os and other stations.

Those programs were originally designed to be a low-budget flier in low-profile timeslots to see if English-language auds would bite on the limited-run nightly soap program format that is a staple in such territories as Latin America. MyNet made the 13-week serials the centerpiece of its Monday-Saturday, 8-10 p.m. primetime blocks.

At the February 2006 news conference announcing the creation of MyNet, Ailes quipped with characteristic bravado that he owed CBS chief Leslie Moonves, who helped spearhead the CW merger, a “thank you note” for shuttering UPN and paving the way for the MyNet bow. Peter Chernin, News Corp. prexy and chief operating officer, asserted that MyNet’s low-cost programming and low overhead would allow the “network to be profitable from Day 1.”

Well, not exactly. The turnout last fall for novelas “Fashion House” and “Desire” on virtually all of MyNet’s 175 station affils was shockingly low by broadcast standards. At the same time, the production costs on each hourlong episode, originally set for no more than $150,000-$175,000, inched up as Hollywood’s talent guilds became aware of the News Corp. initiative and as My Net’s stewards felt the need to add name thesps like Morgan Fairchild and Tatum O’Neal to give them something to tubthump.

Moreover, in order to make MyNet attractive to non-Fox-owned stations, the net’s business plan offered local stations a generous split of the advertising time in each network supplied hour, with the network taking only five of the 14 minutes of blurb time in each hour. That 9 minute/5 minute ad time split coupled with weak ratings has limited the cash flow MyNet has to pay for programming and marketing costs (though the revenue picture is offset somewhat by the coin generated by the News Corp.-owned MyNet stations).

MyNet’s early growing pains offer a vivid illustration why major media companies are almost exclusively focused on the cable/satellite realm for startup channels. Consider the case of Fox Business Network, which launched this month with 19 hours of original programming per day with much less of a struggle than MyNet had in fielding 12 hours a week. No matter how minuscule its aud may be at the outset, Fox Business can bank on guaranteed subscriber fees from cable and satellite operators. Plus, its programming strategy is extremely well-defined, in keeping with cable’s mandate that channels serve a distinct niche.

In broadcast TV, the old rule of thumb for independent stations was to offer something the Big Four network affiliates did not — namely, a generous supply of local news, sports, community-oriented programming and counterprogramming of the web affils in primetime with off-network programs and movie telecasts.

But going all local, all the time, or pasting together their own sked of original and off-network series, sports or movie telecasts is, pragmatically speaking, not an option for the vast majority of little guys trying to compete with the ABC, CBS, NBC, Fox and CW affiliates in their markets.

For one thing, the product just isn’t there like it used to be in the 1980s and early ’90s. The movie packages once proffered by Hollywood’s majors are mostly steered to cable outlets (at least the most sought-after titles). The major syndicators stopped churning out first-run syndicated dramas a la “Star Trek: The Next Generation” and “Baywatch” after the expansion of WB and UPN sucked away all the available time periods.

So what to do with MyNet? Industry observers said News Corp. made a savvy move in January by hiring former Paramount, Twentieth and Universal TV chief Greg Meidel to serve as MyNet’s first dedicated prexy under Abernethy. Meidel is a syndie biz vet with long-term relationships with the station operators that MyNet needs to keep in the fold.

Shortly after Meidel arrived, MyNet dumped the novelas and scraped together reality TV scraps and specials from the Fox archives and anything else Meidel could get his hands on. And it was all welcome news to MyNet affils.

“We feel a lot better this year than we did last year,” says Mark Cornetta, prexy and g.m. of MyNet’s Denver affil, Gannett Broadcasting-owned KTVD-TV, and its NBC-affiliated sister station KUSA-TV. “The new programs they’ve launched are doing a lot better for us … Greg Meidel stepped in and right out of the gate took action. They didn’t sit around making it difficult for us with the novelas. They made the change. Because of (News Corp.’s) stations, they have as much interest in making the network successful as we do.”

That sentiment is echoed by Lew Leone, general manager of My Net’s Gotham O&O, WWOR, as well as Fox O&O WNYW-TV. With MyNet’s revamped slate, WWOR has been able to take advantage of a strong spot ad sales market this fall and reap “a lot of money that couldn’t get placed on the (Big Four) networks” — something that wouldn’t have come as readily with national advertisers if WWOR was strictly local programming, Leone says.

Meidel acknowledges the uphill climb facing MyNet, given its rough start last year and budgetary limitations vis a vis his larger competitors. Profitability remains a way’s off, and there are rumblings that MyNet may seek to adjust in that generous ad time split with affils in the near future. (Meidel declined to comment on this.)

But the network’s shift to a strategy of themed nights has been a plus so far this season. Meidel has implemented a laser-like focus on instantly identifiable franchises a la Monday’s two-hour block of the tabloid-y “Celebrity Expose,” chronicling the latest antics of Britney, Lindsay, Brangelina, et al.

Tuesday’s law-and-order reality combo of “The Academy,” focusing on police acad rookies; and “Jail,” from “Cops” producer John Langley, is drawing MyNet’s largest auds, in the 1.5 million-1.7 million viewer range.

MyNet shares the rights to “Academy” and “Jail” with cablers Fox Reality and Court TV, respectively, in arrangements that benefit MyNet on a cost basis but also help bring in the widest possible aud to MyNet airings through the additional exposure.

Affils say they’re happy with the nonscripted thrust of the sked, which also includes movies on Thursday and Friday and the Saturday hodgepodge of “NFL Network Total Access” pigskin roundup and “Control Room Presents” concert speshes. And Meidel says MyNet has a “very cool” comedy series in development as well as an action-drama series.

“The ratings for ‘Celebrity Expose’ have gone up every week since it premiered. The very specific focus on targeted nights is working for us,” Meidel says. “It was important for us to deliver some growth because the stations went through a lot last season. We’re now a very different network.”

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