News

Two Cheers for the Old Cable Guys

12/15/2002 7:00 PM Eastern

Today's market is a tough sell for any kind of television programming, unless you're Tony Soprano. Viewership is down, garnering advertising is a more difficult task than ever, and audiences are fracturing into tiny pieces.

What's a mogul to do?

Take John Malone, once as feared in Cableland as Soprano is in his fictional New Jersey. But the latest major article on Malone was a story in The New York Times
by influential media writer Geraldine Fabrikant suggesting that Malone — who as CEO of cable giant Tele-Communications Inc. put up cash and cable carriage to give birth to Discovery Networks, Black Entertainment Television and others, and later engineered the industry financial bail-out of Ted Turner when Turner's overreach for MGM put his company in jeopardy — has, uh, lost some of his mojo.

Turner himself, put out to pasture when AOL and Time Warner Inc. merged, reportedly is stalling a merger of ABC News and Cable News Network, demanding a greater dowry for his brainchild in the marriage.

Cablevision Systems Corp. chairman Charles Dolan — who has had a hand in creating more channels than you can shake a stick at, including Home Box Office, American Movie Classics, and the rich regional sports niche that features the National Basketball League's New York Knicks and the National Hockey League's New York Rangers — had to sell his own favorite network, Bravo, to NBC to meet liquidity needs. Dolan is also being threatened by a put-call on the sports businesses by his partner Rupert Murdoch.

While none of these media princes is likely to be seen cashing in cans to make margin calls, the fact remains — the multichannel-video programming business is tougher than ever these days, and a primary reason is a part of the zeitgeist that brought these worthies to fame and fortune in the first place: programming choice.

Programmers like Dolan and Turner, and cable distributors like Malone did something 25 years ago that continues to reverberate today. They took advantage of a technological change, the communications satellite, and not only created new outlets, but also an entire new market.

How? By creating new programming itself, in expanding existing genres to 24-hour status (like ESPN or CNN), or creating entirely different compilation structures (like HBO). The number of channels available to an average cable subscriber went from under 10 in 1980 to over 36 in 1990, to over 70 in 2001, and literally hundreds at the remotes of digital subscribers.

Contrast that with the direct-broadcast satellite providers who followed the cable pioneers into the home-video business. I can only think of one new programming concept — DirecTV Inc.'s NFL Sunday Ticket, and its counterparts in other sports, which gives subscribers the ability to view any team's games on a pay-per-view basis.

Satellite providers would say their business is distribution, not creation, and that the programming they get from established sources is fine. But where would the industry be today if in 1976, when [Time Warner Inc.'s] Gerry Levin came knocking with HBO, Malone and his cable pals had made the same argument?

As distribution of content continues its shift from an economy of scarcity to that of abundance, fed by the telecom industry, which has its own headaches to nurse, it might not be a bad time to shout out at least two cheers to the accomplishments of Malone, Turner, Dolan, and the like. And remind those that follow them in media executive suites that the old Sam Goldwyn proposition — "There's nothing wrong with the movie business that good pictures won't cure" — might apply to television as well.

John Hillis is president of Equinox Media International, LLC, a media analysis and consulting firm in Fairfax, Va. He has a microscopic personal stock holding in Liberty Media and worked for both Turner and Cablevision in the 1980s.

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