Bloomberg the Company & Products

Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

Businessweek Archives

People Of Earth, We Are A Friendly Channel


Top of the News

PEOPLE OF EARTH, WE ARE A FRIENDLY CHANNEL

The U.S. Senate has cast a cloud over Kay Koplovitz' liftoff. Chief executive of the USA Network, Koplovitz brought her new Sci-Fi Channel to the airwaves on Sept. 24. But just two days before its scheduled debut, the Senate voted overwhelmingly to reregulate cable television. President Bush has vowed to veto the bill, but lawmakers in both houses believe they can muster the votes to override.

Such news might seem eyeball-glazing, particularly to the confirmed Trekkies and Godzilla freaks who are Sci-Fi's target audience. But it has profound implications for the future of the new channel, which is owned by USA Network. Koplovitz thinks she can lock up a large and rabidly loyal audience with a 24-hour network that offers such vintage TV series as Doctor Who and such blockbuster films as Star Wars.

Now, the cable bill may hobble her plans. Among its provisions, it would allow broadcasters to demand fees from cable operators for the channels they now transmit for free. Many cable operators fear those charges will cut into their profits, so some are shying away from new services such as Sci-Fi. "Any cable operator is going to be careful about programming decisions until the regulatory situation clears up," says Richard Aurelio, president of Time Warner Inc.'s New York City Cable Group.

ALIENS APLENTY. Skittish operators are only one of the hurdles facing Sci-Fi, the industry's biggest new launch since Ted Turner's TNT began airing in 1988. Even if the network persuades affiliates to sign up, it must squeeze onto an increasingly crowded cable spectrum. Most operators are at the limit of their capacity now, so new networks usually get on the dial only by displacing old ones.

What's more, Sci-Fi is vying for a slot against none other than Turner, who is rolling out a new cartoon network on Oct. 1. Media analysts say he is having a similarly slow time gaining distribution, even though cable giants such as Tele-Communications Inc. and Time Warner own a large chunk of Turner Broadcasting System Inc. One other weakness: Sci-Fi won't be able to air such staples as Star Trek and The Twilight Zone until 1994, when their current syndication deals lapse.

The result: less reach for the Sci-Fi Channel. Time Warner isn't offering the network to its 6.8 million subscribers, but the company may yet pick it up. All told, Sci-Fi will debut on cable systems that reach 10 million TV households. Koplovitz concedes regulatory worries are making operators reluctant to sign up. Yet she still predicts Sci-Fi will reach 30 million homes and turn a profit in three to four years. Koplovitz' long-term projections are even more bullish: "We think there are 65 million viewers out there who want this," she says.

If anyone can deliver that audience, it's Koplovitz. The 47-year-old executive has used shrewd marketing and a sense for the public taste to build USA Network into one of America's top-rated cable channels. Unlike the narrowly targeted networks on the cable spectrum, USA airs everything from game shows such as The New Hollywood Squares to series such as Murder, She Wrote. The broad format has won Koplovitz both viewers and advertisers. USA, which is co-owned by Paramount Communications Inc. and Matsushita's MCA, doesn't disclose earnings. But cable-TV analyst Paul Kagan Associates estimates that USA will earn $ 95 million in 1992 on revenues of $ 379 million. That would be a 16% jump over 1991.

Koplovitz has spent well over $ 50 million on programming for Sci-Fi -- enough to keep avid viewers planted on their sofas until the return of Halley's Comet. Among its movies, Sci-Fi has bought rights to the Star Wars trilogy and the entire Star Trek canon. In addition to Doctor Who, its TV series include Lost in Space and Battlestar Galactica.Koplovitz says she will compensate for the absence of the original Star Trek by hooking viewers on new shows. Sci-Fi bought 10,000 hours of footage from NASA, which it is using to produce Inside Space, a series that will offer a glimpse behind the scenes of the space program.

SEEKING SPACEHEADS. Advertisers agree that Koplovitz is tapping into an elusive and lucrative audience of young, predominantly male viewers. Procter & Gamble, Wrigley's, and Bristol-Myers Squibb already have bought airtime on Sci-Fi. "I think it's an outstanding concept," says Marvin H. Koslow, president of the consumer products group at Bristol-Myers. "But can she get enough cable systems to buy in?" To build excitement for Sci-Fi, Koplovitz has been promoting it heavily mn popular USA programs, including its U.S. Open tennis coverage.

Few media experts doubt Koplovitz' grit or track record. And she can draw on the deep pockets of Paramount and MCA. Paramount's enthusiasm for the techie audience takes other forms, too. The company plans to open as many as 80 "virtual reality arcades" in U.S. shopping malls (page 96). Cost: up to $ 5 million apiece, say company sources. But the twin threats of regulation and the channel glut still loom over Sci-Fi like Darth Vader. If Koplovitz is really serious about reaching 65 million Americans, she had better have the patience of Yoda.Mark Landler in New York


LIMITED-TIME OFFER SUBSCRIBE NOW
 
blog comments powered by Disqus