The coming year, by contrast, could be full of thrills. Last week, on the anniversary of his knockdown in Norway, the man who might just have been the best-liked (and most highly regarded) news exec in TVdom limped away from the job he loved. Stringer’s resignation ended an eventful 30-year career, crowned by six years as president of the CBS Broadcast Group. His destination: a New Age media venture set up by a trio of telephone giants–Nynex, Pacific Telesis and Bell Atlantic. Their aim: to revolutionize the news and entertainment business, and they want Stringer as revolutionary-in-chief. But even as he embraced this brave new world, his old one was thrown into yet more turmoil. Touring broadcast row in New York, Atlanta cable mogul Ted Turner told NEWSWEEK sources that he would drop his longstanding effort to buy NBC and shoot instead for CBS. If his offer materializes, the sources say, it would be for $4.9 billion in cash and shares in Turner Broadcasting.
That was a fitting coda to Stringer’s tenure at CBS. For in this season of seismic upheaval, caused in large measure by fast-evolving new technologies, both the traditional broadcast networks and their upstart challengers face enormous uncertainty. CBS has to get out of the ratings cellar and recapture a more youthful generation of viewers–without Stringer. The phone companies must break out of their traditional market and deliver the dizzying promises of interactive TV, home shopping and instant movies over phone lines.
Few TV viewers have ever heard of the Welsh-born Stringer, 53. But many more know his work. During the 1980s, CBS was widely considered to be the best news network in the business and Stringer gets much of the credit. He was executive producer of the award-winning “CBS Reports,” as well as the “CBS Evening News” with Dan Rather Subsequently, as president of the network’s news division, he helped develop “48 Hours” and “CBS This Morning.” Stringer won nine Emmys for his own writing, producing and directing. But perhaps his biggest (and most recent) coup was stealing David Letterman from NBC in 1993. The comedian s talk show dominates late-night TV and has generated some $100 million of business for CBS over the last year alone. “It was because of Howard that we decided to come to CBS,” says Letterman, flatly. “Dignified class. That’s my impression of him.”
Lots of people say, such things about Stringer, Never was his charm so deftly displayed as when he was wooing Letterman. At one key point in the negotiations, subtly suggesting that Letterman might be happier at CBS, Stringer sent him a Civil War photo of a dour-looking field surgeon, one Dr. Jonathan Letterman, with this note: “This has got to be a relative. He looks too miserable not to be.” Says one NBC executive: “Howard is funny, charming, bright and quick. He made it easier for David to know where to go.”
The stage has been set for Stringer’s departure for some time. He’s a news junkie, a believer in the value and virtue of broadcast journalism and suspicious of those who consider it a business. Yet that’s just what the new generation of network industrialists do. General Electric has acquired NBC. Media giant Capital Cities bought ABC. Laurence Tisch controls CBS. Tisch, especially, has imposed a tough bottomline cost-consciousness that grates with many of the network’s veterans. Stringer, especially, complained of being forced into a devil’s dilemma. By his own account, he’s presided over $150 million of budget cuts and scores of layoffs over the past six years. Intimates tell how Stringer took Tisch on a whirlwind tour of CBS’s news bureaus after the industrialist acquired CBS in 1985. As the tale goes, Tisch would arrive at a bureau packed with seemingly idle correspondents and news aides (most of them, in fact, waiting to meet him) and quietly ask Stringer: “Why do we need all of these people?” Stringer would then call ahead to the next stop on the tour to order employees into the field. Arriving at the empty office, Tisch would ask, “Why do we need all this space?”
Friends say Stringer finally got tired of battling Tisch over spending. At CBS, he was seen as the last fine of defense against the corporate bean counters. “We always knew we had a friend in Howard at Black Rock,” says veteran newsman Mike Wallace of “60 Minutes.” But it was grueling, frustrating work, exacerbated by the uncertainty of working at a network whose owner wanted to sell. Last year, briefly, things were looking up. Tisch, it appeared, might sell CBS to Barry Diller, an ex-Hollywood studio chief who built up the Fox network. That deal collapsed, but it started Stringer thinking about the rest of his life. Says Stringer: “It created in me a feeling that perhaps, after 30 years, I should think about what I might do.”
joining the phone companies, Stringer leaps from the known to the unknown. If you listen to Info Age hypesters, phone companies are broadcasting’s future. Even now they’re branching out of old markets and into new ones. They’re upgrading their networks with high-tech doodads that permit them to deliver TV shows, movies and interactive offerings from games to home shopping to business information on demand. Though few have won full regulatory approval for these new businesses, they are spending billions of dollars preparing for it. Trouble is, they have little or no expertise in the entertainment business. How do you select and create programming that draws customers? To the telecom folks, who run public utilities, such things are a mystery.
That’s where Stringer fits in. “Howard sees an incredible opportunity to be able to create a company from the ground up,” CEO of Bell Atlantic. That’s an understatement. The new venture doesn’t have a name or a logo. Stringer has no office, let alone a staff. But unlike his situation at CBS, he’s got a lot of money -and a brief as big as his budget. According to insiders, his mission is to woo Hollywood, to create entertainment and news services unlike anything the phone companies have ever offered-and sell them to you and me at an attractive price. By 2001, Stringer and the phone companies hope, they will have built a bustling business that dwarfs CBS. You can only wish them luck, showbiz s e: break a leg.
title: “Changing Channels” ShowToc: true date: “2023-01-11” author: “Dona Emanuel”
“The Count of Monte Cristo” fits the stereotype of European television programming–long and lofty. But it also marks a crucial change in European TV. America used to own the global TV market. The United States exported “Dallas” and “Wheel of Fortune” the same way it exported McDonald’s and Coke. Europeans sulked over America’s cultural imperialism, but they couldn’t do much about it. Now all that is changing. Deregulation and new digital delivery systems are reshaping the European market. There are more channels and better technology; millions of new ad euros are flowing into the business. National media companies are partnering to create Pan-European production and distribution networks. After years of worrying that “Dynasty” and “Baywatch” would corrupt their kids, Europeans have discovered that they can do the corrupting themselves. Besides producing high-toned entertainment like “The Count,” they’re now cranking out sitcoms and cop shows of their own and selling them all across the Continent.
Often, they beat the American competition hands down. Content laws do give Europeans a leg up; in some markets 60 percent of what’s on the airwaves must be local. Still, protection alone can’t account for ratings. In Britain, France, Germany and Italy, there were no American series and only two American movies among the top 10 most-watched programs in 1998, according to the Eurodata TV report put out by the French research firm Mediametrie. What’s more, 78 percent of all the new programs launched during the 1997-98 season in Europe were national productions.
That’s not to say that Hollywood is out of the picture. The United States is still by far the world’s largest exporter of television. And American movies are still in prime time all over the world. But when it comes to series and specials, Europeans are going local whenever they can. The switch has shaken up some American producers, who expect up to 60 percent of their production budgets to come from overseas.
And it has them pining for the days when an immature market was theirs for the taking. Until the 1980s, European TV was public and the production was done in-house. When the first commercial networks sprang up, they looked to American programming to distinguish themselves from the public stations and generate ad revenue. Later, as the local production industries grew, Americans hung onto their market share by forcing Europeans into “output deals.” A Hollywood studio might sell a European TV company the rights to its latest action flick, but the company would have to buy hundreds of hours of sitcoms and drama series along with it, packaged in deals that could top $1 billion. Sometimes they got hits like “Dallas.” More often, they got dicey shows that even Americans didn’t want to watch. “You’d have to suffer major write-offs,” says Remy Sautter, head of CLT-UFA, which owns several European TV stations. “You’d have to face losses on products that were not shown on the screen.”
Output deals haven’t died out completely, because Europeans still need the blockbusters. But Sautter and others are signing fewer such contracts and demanding better terms. They know there are strong European shows to fall back on. Says TF1 spokesman Ronald Blunden, “If you put two shows of equal quality next to each other, the French will go for the French shows over the American ones.” Blunden points to the hit show “St-Tropez,” which is sort of a French “Baywatch”–a bunch of cute twentysomethings manage a beach resort. Produced by the French company Marathon, it rates as high as or better than American hits like “Dawson’s Creek.” The show also sells across Europe the same way American programs have. Marathon International CEO Olivier Bremond says the international locale is a lure, but more important is the budget–$500,000 an episode. That’s half what “Baywatch” costs, but since the stars get less money, the quality is comparable.
It had better be, because Europeans are used to American production values. If the show looks cheap, they’ll flip right back to “Baywatch” or “Melrose Place.” Still, European stars don’t necessarily need to be silicon-enhanced. “People used to laugh at the idea of a German cop show,” says Alexander Coridass, the president and CEO of ZDF Enterprises, the commercial production and distribution arm of Germany’s most popular public network. Now, its cop show “Derrick” is one of Europe’s biggest hits, sold in more than 100 markets globally. “He’s old, he’s boring and he’s not good-looking,” says Coridass of the title character. Swedish station manager Patrick Svensk says audiences back home aren’t necessarily looking for flash, either. They’re happy with their local version of “ER.” “It’s not as exciting as the U.S. version,” he admits. “People don’t come in with gunshot wounds every day. Sometimes they just cut their finger.”
The demand for local programming will only increase as Europe enters the 500-channel digital age. Delays in privatization hindered the development of multichannel television in Europe, but there was an upside. Europeans can now leapfrog ahead to the latest technology. Parts of Europe were cabled with fiber optics, which can handle digital signals. In the areas that weren’t, consumers can always switch to one of the many new digital terrestrial or digital satellite systems. The landscape is complex, but also competitive, which means that companies will move quickly to upgrade their technology and offer consumers the most up-to-date services. Europeans are even exporting their know-how to the States–MediaOne will launch a digital cable system in America this summer using Canal Plus technology.
Europeans are already taxed for their “free” TV, but 12 percent are willing to shell out around $30 a month for pay TV, according to a 1998 J.P. Morgan report. J.P. Morgan estimates that number will rise to 27 percent within the next five to 10 years. The reason? First-run movies and sports. Niche programming, like documentary, kids’ and music channels, is also a lure. There again, localized content is likely to win–as U.S. networks can attest. MTV launched a Pan-European channel in 1987. German veejays peppered their speech with English and Italian. Content was the same from market to market. By the early 1990s, local competition had forced MTV to revamp its strategy. Now the German channel has local veejays who show German videos. American channels like Discovery have learned this lesson well–they tailor their schedules to the viewing habits of each market.
Discovery also has a long-term partnership with the BBC, and coproduces documentaries with Canal Plus and Germany’s ZDF. These deals are less about bridging cultural gaps than financial ones–they split up costs and allow companies to keep the rights to shows. “Baywatch,” for example, might never have made it past the second season if the KirchGroup hadn’t poured $350,000 per episode into the production. The investment is paying off handsomely, since Kirch has continental European rights for the show. In fact, the “content is king” cliche has never been more true–any European TV company that hopes to hold its own against the studios must have not only distribution streams, but a substantial library. After years of production and acquisition, Kirch now owns 80,000 hours of programming, more than some Hollywood studios. Kirch and others are also producing and acquiring more English-language content to ensure global sales. But European executives know local content is still key. “I am absolutely sure,” says Canal Plus CEO Pierre Lescure, “that 50 years from now, the French will still speak French, the Spanish will still speak Spanish and so on.” Thus, Canal Plus produces in a dozen languages, including French and English. Granada, a British company that is producing a new comedy series for NBC, is planning to open its own production facility in Germany. The company would make German-language shows for the German audience. Says Granada Media International’s managing director Nadine Nohr, “If you want to be a success in a market, you can’t impose your ideas on others.”
Europeans have also figured out that economies of scale can help them stand up to the Hollywood studios. Led by the hyperambitious Lescure, Canal Plus continues to swallow up much of European pay TV, operating in nearly every major market. Says Lescure rather modestly, “I think it’s now very interesting for the U.S. companies to deal with us.” At MIP, the international TV market in Cannes last April, the European TV company SBS Broadcasting (owned by American TV veteran Harry Sloan) announced plans to merge with Eastern Europe’s CME to create a company with broadcasting capacity in 13 countries. Meanwhile, Kirch and Mediaset announced their own Pan-European partnership. According to Fedele Confalonieri, chairman of the Mediaset Group, the deal will allow the two companies to produce more content, exploit a larger European ad market and cut better output deals with the Hollywood studios. “The strategy,” says Confalonieri, “is to become more independent from the U.S.” Kirch also hooked up with EM.TV, a German kids company that hopes to create a brand that will rival Disney. It’s got the marketing bit down. EM.TV threw one of the best parties at MIP and sent a fleet of minicars buzzing around Cannes with its bright yellow logo.
Buzz counts in the Palais des Festivals, where Europeans had a lot more clout than in years past. It used to be that Hollywood came to sell, and Europeans lined up to buy. This year, Disney ditched its lavish sales booth; the BBC snapped it up, and “Balzac,” the $16 million follow-up to “The Count of Monte Cristo,” generated lots of interest. Does this mean that European high culture will finally push American pop culture off the small screen? Perhaps–with a little assist from the beach babes of “St-Tropez.” When it comes to peddling TV on both ends of the spectrum, Europeans are proving that they can give as good as they get.
