Jim Cullen, president of the Bell Atlantic Corp., told a NATPE audience Wednesday that he’s eager to buy “minority positions” in movie or TV companies, but not until the Baby Bell’s merger with cable giant Tele-Communications Inc. gets the blessing of all the relevant government agencies.
After the public session, Cullen denied rumors that Bell Atlantic was about to buy King World Prods. Before making any more big deals, he said, “We want to get this merger completed and get all of the regulatory approvals behind us.”
The best guess, Cullen added, is that the lawyers and regulators are likely to drag out the proceedings through early next year. The last thing Bell Atlantic wants to do, he said, is add to the complications surrounding the merger by engineering a high-visibilitypurchase of a TV-syndication powerhouse like King World.
Cullen thinks the rumor about King World got started because Bell Atlantic is negotiating with King World and other companies with valuable TV and movie libraries to join in a video-on-demand test the Baby Bell will soon make available to 1,000 households in northern Virginia.
In an interview following his remarks, Cullen declined to discuss exactly how Bell Atlantic will share profits from the Virginia commercial test with the companies that supply the movies and TV shows. But he said the parties would be unlikely to use as a guide the current model for distribution of movies on pay-per-view, in which the major studios basically split 90% of the revenues with the cable systems, the other 10% going to PPV distributors like Request and Viewer’s Choice.
Cullen and his co-panelist at the session, TCI prexy Brendan Clouston, took great pains to assure broadcasters in the audience that they’ll be helped, not hurt, by the technological revolution that will create as many as 384 channels on what the industry calls “the full-service network.”
Although the broadcasters’ “share of audience” will go down as new networks spring up all over the cable landscape, Clouston said, “their CPMs will go up.” As he sees it, advertisers will pay higher cost-per-thousands for viewers of the broadcast networks, TV stations and established cablers like USA, ESPN, CNN and Discovery because these services have created a brand identity that viewers feel comfortable watching.
Cullen acknowledged that universal application of the new technology still awaits a commonly accepted industrywide standard for both “the software platform” (which will funnel to living rooms movies, home-shopping services, banking and all of the other consumer services) and “the set-top boxes,” from which subscribers will draw these services into their TV sets.
A number of companies are working on these standards, and, Cullen said, “The best of the breed will emerge over the next five years.”