DAVATZES STEERS A&E; TO SAFE WATERS

“One of the reasons for our success,” explained Nickolas Davatzes, president of cable TV’s Arts & Entertainment Network, “is that we have not gone Hollywood.”

It was a somewhat incongruous statement, coming on the eve of a lavishly subtle pitch to advertising executives in West Hollywood earlier this week by this small but significant purveyor of cultural fare. The gathering marked the formal announcement of two new fall series on Arts & Entertainment--”American Panorama,” a series of dramas and entertainment specials focusing on America’s varied ethnic groups, and “United States,” an acclaimed domestic comedy canceled by NBC in 1980.

Also screened was a slick video reel touting A&E; shows.

Yet the “not-gone-Hollywood” sentiment had the ring of truth coming from Davatzes, a mild-mannered, New York-based former Xerox sales executive. Substituting prudence for flash, Davatzes has steered the year-and-a-half-old Arts & Entertainment Network to relatively safe waters in an otherwise turbulent sea.

Big-spending cultural competitors such as CBS Cable and the Entertainment Channel met an early financial demise while Arts & Entertainment took a more stable, if less exciting path. It spends little on new production, instead relying on a middle-brow mix of dramas and comedies from the British Broadcasting Corp., classic American films, taped performances and obscure docudramas. British works, in fact, make up half of A&E;’s programming via an arrangement with the BBC worked out when the Arts cable network acquired the programming of the Entertainment Channel in 1984 and gave birth to A&E; (a co-venture of the Hearst Corp., ABC Video Enterprises and RCA Cable).

“We look for unusual properties that we feel have not been given adequate opportunity. We see ourselves as the acquirer and deliverer of programming,” Davatzes said. “Clearly, that is one of the keys to our success, understanding who and what we are.”

That understanding is reflected in Davatzes’ own background. He opted for the business world when his father, “a pretty level-headed Greek immigrant,” asked him how he expected to feed a family. But earlier he had aspired to a career as a painter, having displayed a modest talent with oils while still in high school.

Thus, A&E; is aggressively wooing advertisers--but will not interrupt a 52-minute Beethoven movement for a commercial.

Both advertisers and viewers seem to be pleased. In the course of this year alone, A&E; subscribership has leaped by about 25%, to 15 million homes in the United States and Canada. Profitability, meanwhile, is in sight; Davatzes said he expects the network to be in the black by the end of 1986, which would be “ahead of plans.”

Though fans of the former Arts network have accused A&E; of selling out to the masses, Davatzes believes his network’s shows rightfully run the “complete gamut.” “In every household there are people interested in classical drama or comedy from the BBC or opera. There is a wide range out there.”

Each day of the week, A&E;’s prime-time schedule is intended to appeal to a different type of viewer within that range. Monday nights are reserved for series, such as the 10-part “Diana,” a romantic drama produced by the BBC that premieres Aug. 19. Tuesdays are given to the stage, such as Tuesday’s presentation of “Popular Neurotics,” starring Jeff Goldblum and Mimi Kennedy.

A production of Mozart’s “Don Giovanni” taped at the 1977 Glyndebourne Festival was presented Thursday night (Thursdays and Fridays are devoted to classical and performing arts), and Los Angeles’ War Babies comedy troupe will be featured Sunday, which is comedy and variety night. The prime-time schedule is rounded out with docudramas and biographies categorized as “Discovery” on Wednesdays and on Saturday nights with a “Double Feature” of movie classics.

Davatzes disputes the notion that A&E; in many ways seems like a poor man’s PBS. “I think there’s a significant difference between us,” he said. “PBS is an issues-oriented medium.” A&E;, by contrast, is “98% entertainment-based,” he said, the 2% exception being the occasional docudrama.

Both outlets, however, are nurturing a “thought-provoking audience. I’m happy to walk alongside them.”

With few other exceptions, Davatzes said, “the consumer has been conditioned to only look at the networks . . . you can understand why the level of appreciation is not where we’d like it to be.”

Davatzes believes that A&E;’s staying power--and continued growth--will help expand that appreciation level. The network’s aggressive plans last year included its purchase of its own transponder (the satellite channel by which it feeds cable operators). This year, it geared up a multimillion-dollar promotional campaign that began with newspaper ads on the theme “Surprise Your Eyes.”

A healthy nudge to A&E;’s expansion strategy came last week in the form of a federal appeals court ruling that paves the way for many more of the 8,000 U.S. and Canadian cable affiliates to carry A&E.;

The ruling calls for the Federal Communications Commission to drop its 20-year-old “must-carry” rules, which forced cable operators to retransmit over-the-air signals from local TV stations. Those signals typically occupy cable channels that otherwise could be used for basic services such as A&E; that are free to cable subscribers.

Davatzes said that the ruling “will accelerate our opportunity to reach 20 million (households),” a goal he now expects to reach by the end of 1986. Though the ruling is expected to be appealed, Davatzes said that he not only expects it to stand, but to be “a tremendous boon to the consumer. The consumer will have more and more choices.”

That doesn’t mean KCBS or KTLA suddenly will disappear from the cable box, Davatzes noted. But smaller stations and especially duplicated signals probably will. A&E; has the potential to reach another 4,500 or so cable outlets from which it currently is excluded because of the must-carry rules.

“In the final analysis, the cable operators’ No. 1 concern is meeting the consumer’s need,” Davatzes said. A&E;, he added, is a service “communities are proud to have.”

It is that thinking, presumably, that convinces cable affiliates to pay the network 72 cents a year per household and, more importantly, assign A&E; a cable channel and get its programming before the public. “Without their support,” Davatzes said, “it wouldn’t happen.”