He was the strategic visionary behind the union of Time and Warner. He was a cable pioneer and an early adopter in videogames. And he was an inspirational leader with a knack for making superb deals.
To those who worked for him, it’s hard to believe that Thursday will mark 20 years since the death of Steve Ross. His legacy in the media and entertainment remains strong, even if his name is not as familiar as it should be to a younger generation of showbizzers.
Ross created one of the first and most successful media congloms in 1969 with his acquisition of Warner Bros. at a time when the studio had seen better days — much better days.
Steve’s “architecture” for business was two-fold: hire, empower and retain the best executives to aggregate world-class content; and be very proactive developing or acquiring, “new media” as markets for new and library content. It was a daring strategy for the late ’60s, when the three networks were quasi-monopolies and the Hollywood studios were all in flux.
The renamed Warner Communications soon emerged as the world’s most consistent movie producer/distributor — a title it maintains to this day. Ross revved up TV activity under the WB umbrella with the 1989 acquisition of Lorimar/Telepictures, a prolific producer of smallscreen fare. The music industry’s pre-digital Internet heyday was dominated by Warner Bros.’ labels — Atlantic, Warner, Reprise, Elektra, Geffen, et al. Cassette tapes and CDs then provided the “new technology” sales stimulus.
Under Ross, an all-star studio exec team took the field and played their positions expertly: Ted Ashley, Frank Wells, Bob Daly, Terry Semel, Barry Meyer and Leslie Moonves, to name a few.
Warner was also ahead of the curve developing international markets, homevideo, pay-per-view and digital distribution.
Ross bet on the future of the wired world with the creation in the early 1970s of Warner Cable. He saw it as a way to expand the studio’s markets for high-end content. Warner Cable won the most major city franchises early on because of its pioneering and unique interactive technology.
Warner Cable also spawned such enduring channels as Nickelodeon, MTV, VH1 and the Movie Channel, and it had equity stakes in Ted Turner’s nascent efforts.
Ross was quick to see the potential of the videogame business, acquiring Atari in 1976. But here, Ross’ trust in management failed. Great early success led to hubris, product incompatibility, heavy debt and the boardroom dispute that ultimately forced Ross to fire-sale some of his jewels — the cable program business — to Viacom’s Terry Elkes, whose subsequent ouster ceded its core business to Sumner Redstone.
The Time Warner merger in 1990 restored the initiatives of hardware-plus-software by increasing cable footprint, reshaping program network leadership and capitalize on new digital technologies.
Warner stock was at $39 per share prior to the merger. Ultimately, Time paid $72, greatly enriching Warner shareholders. Steve soon fell ill, but the strategy to acquire Turner Broadcasting was already on track. The debacle of the AOL merger was well after Ross’ time. Time Warner’s current CEO, Jeff Bewkes, has followed a similar vision of pursuing technological expansion to increase markets for superior content. Contrary to music, digital distribution and the Internet can be accretive for video content. Just look at HBO Go, TV Everywhere and international markets.
I loved working on Ross’ ad hoc strategy committee as an early planner of homevideo, PPV, VOD and the studio’s senior contact with program networks and MSOs, especially Time Inc. My division specialized in ever-expanding markets for more products, which realized many of Steve’s dreams.
When thinking of CEOs who shaped this business — Dolan, Murdoch, Turner, Malone, Eisner and Iger, Roberts. Burke, Jobs — the industry should remember to give Ross the trailblazing credit he earned.
(Edward Bleier was a senior distribution executive at Warner Bros. from 1969-2003.)