Challenge Networks : Independent TV Aims for the Big Time

To those who tuned in, last month’s premiere of the series “Dempsey & Makepeace” hardly seemed a special moment in television history. The characters’ accents may have been British, but the story was pure Hollywood--an armored car heist, a cop cracking a crook’s jaw and a budding romance between the series stars.

To those who work in television, however, “Dempsey & Makepeace” was a sign of an important change in the medium comic Fred Allen once called “the sincerest form of imitation.” The new weekly prime-time series was not broadcast on ABC, CBS or NBC. Instead, it premiered on more than 40 independent television stations in major cities around the country, including KTLA (Channel 5) in Los Angeles.

After 40 years of dominating the medium, the networks are losing their dominance over what gets aired on national television.

Second-Class Citizens

Independent stations--historically the medium’s second-class citizens because they were unaffiliated with any of the three networks--are trying to discard program schedules long on network reruns and old movies.

Under powerful and innovative new ownership, many of these stations are airing original programs such as “Dempsey & Makepeace” and, some TV executives believe, may even be inching toward forming a fourth national network.

As the familiar plot of “Dempsey & Makepeace” suggests, however, one change does not appear imminent. Even if the new programmers are successful in approximating a fourth network--increasing the potential for news, entertainment and information on the medium--what they produce is likely to differ little from the fare the American public already sees on the three networks that have dominated the medium for 30 years.

The changes now occurring in the broadcast industry will not bring about “an immediate fourth network,” said Alfred Masini, one of the founding fathers among the new national programmers, “but they are going to position a few people to control programming other than the networks. It opens a way, hopefully, for more people to be creative and bring something else to the fore.”

Gaining Momentum

The reduction in network dominance of television actually began in the late 1970s, but it gained momentum this spring when a series of billion-dollar business deals created three new TV corporate powers.

In March, American Broadcasting Cos., fearing a hostile takeover, engineered a friendly, $3.5-billion takeover of itself by lesser-known Capital Cities Communications.

A few weeks later, international publisher Rupert Murdoch, now sole owner of 20th Century Fox, borrowed $1.9 billion to buy Metromedia, the nation’s largest chain of independent TV stations, including KTTV (Channel 11), in Los Angeles.

Ten days after the Murdoch-Metromedia deal, Chicago’s Tribune Co. became the nation’s fourth-largest TV company in terms of potential audience when it bought KTLA in Los Angeles for a record price of $510 million. The deal gave Tribune Co. stations in the three major TV markets--New York, Los Angeles and Chicago--one of them a “superstation” that reaches a nationwide audience over cable.

And, last month, cable-TV entrepreneur Ted Turner, whose Atlanta station WTBS reaches a national audience via cable, bid $1.5 billion for MGM/UA Entertainment Co., only days after he was rebuffed in an attempted takeover of CBS.

Until now, independent stations have survived through the concept of counter programming--showing “MASH” reruns, for example, while the networks air news shows, or airing Humphrey Bogart movies while the networks show prime-time series.

In effect, counter-programming means that the independents zig when networks zag, hoping to grab the audience that is uninterested in network fare. By this strategy, the independents generally give up the biggest audience share to the networks, and compete with each other for the leftovers.

Some New Players

But this spring’s events suggest to some that new players have entered the industry with hopes of changing that basic strategy.

To many, Tribune’s and Murdoch’s purchases are especially significant because they combine a program producer with a major group of independent stations for the first time. As all three networks do, Murdoch and Tribune now own stations in the three major television markets--New York, Los Angeles and Chicago.

With those as a base, the theory goes, Turner or Murdoch would have enough momentum to persuade other independent stations to buy their shows, turning independent stations into a loosely affiliated fourth network.

But the relationship between station ownership and program production is far from proven. At least some TV executives agree that it will help if Murdoch and Tribune really want to become fourth networks. In that case, owning stations in the top three cities will provide the leverage needed to do what networks do--force stations to air most of their programs.

Programming and station ownership “don’t get inherently better by putting them together,” said Frank J. Biondi, executive vice president of Coca-Cola’s entertainment division, “unless you make the decision that you’re going to be a network.”

Too Much to Chew

James Dowdle, president of Tribune Broadcasting, for one, said, “They ought to lock me up and throw the key away if I propose to our board that I want to go prime time seven nights a week. That is biting off far more than any one company can chew.”

But the new programmers apparently do intend to tread where the networks compete already: prime time, where the costs and revenues are highest; the lucrative daytime hours, where networks traditionally have operated most profitably, and in afternoon and morning children’s programming, where the networks’ grip is weakest.

Tribune’s “Dempsey & Makepeace” is the first prime-time effort. Another is “Small Wonder,” a half-hour situation comedy produced by the New Program Group, a consortium of Taft Broadcasting, Storer Communications, Gannett and Hearst--a group whose stations cover 50% of the country’s TV audience.

“We were formed so that we can control our program destinies,” said Lucy Salhany, vice president for programming of Taft Broadcasting and head of the program consortium.

“We don’t call ourselves a fourth network, because all of us in the group feel that probably is not going to happen.”

Prime time is also where Rupert Murdoch and colleague Barry Diller, chairman of 20th Century Fox, are headed.

One Night of Prime Time

Diller said he and Murdoch plan a Los Angeles-based operation that will present at first one night a week of prime time shows. From that, their venture could grow, perhaps to include news, although Diller denies eyeing a full-service network in the traditional sense--126 hours a week of news and entertainment. Fox recently formed a new unit called Fox Television Network to handle its increased commitment to TV programming.

“What we have in mind is . . . to begin a program service--a ‘networking’ service,” Diller said. “We think there’s a market for it . . . and we think we can fulfill it.

“We believe that we can become a strong fourth in that area.”

Network executives confidently warn that independents will be disappointed if they try to compete regularly in prime time. That is the arena where the networks spend the most time and money.

“Switching to direct competition with the networks in prime time on a regular basis just doesn’t make business sense,” said David Poltrack, vice president of research at CBS Broadcast Group. “You can make more money with low-cost programming” requiring smaller audience shares to break even--the strategy of counter programming.

Where the Money Is

Yet prime time is also where the most money is to be made.

Another potentially lucrative area for independents is daytime, those hours when cheap-to-produce game shows and soap operas typically have earned the networks their biggest profits.

Until now, independents countered mostly with reruns, and daytime has remained the area where network dominance has stayed strongest.

“For the first time there is a glimmer of being competitive” in daytime, said James B. Hedlund, chief lobbyist of the Assn. of Independent Television Stations, a trade group in Washington. Until now, Hedlund said, independents have had “a dead daytime.”

Tribune Co., again, is first, with an effort called Inday, a project offering independents a daily two-hour block of four original news and feature magazine shows. Inday already has signed up 96 independent stations.

Independents also are eyeing weekday children’s programming, an area largely abandoned by the networks.

Children’s Series

Last month, four new syndicated children’s series premiered, including shows from Tribune and Group W Productions. Taft Broadcasting, which owns the Worldvision syndication company, also owns the Hanna-Barbera animation studio.

For five years, Tribune has also offered half-hour national news programs called Independent Network News. The prime-time version of the syndicated show airs on 93 stations, and a daytime broadcast is on 64.

Ted Turner emerges as something of a wild card in all this. As he does not own stations in any of the major TV markets, his strategy is less clear.

Turner declined to be interviewed for this story, and MGM Television President Lawrence Gershman hesitated to discuss plans because Turner’s acquisition of the movie studio has not yet been completed.

Speculation in the industry ranges from the notion that Turner has no firm plan in mind, but merely bought MGM to assuage the pain of losing his CBS bid, to the idea that he will use MGM’s film library for his Atlanta superstation and permit the studio to produce shows for anyone.

Satellite Technology

Still others say that Turner may use MGM to develop first-run programming, with an eye toward his WTBS superstation itself becoming a fourth network using satellite distribution technology.

Whether all these new efforts will actually evolve into a full-blown fourth network is television’s next $64-million question.

Frederick S. Pierce, president of ABC, says no. “You can only cut the audience so many ways and sooner or later it spells tilt. “

Mel Harris, president of Paramount Television Group, believes that the television audience is already sliced thinner than ever before. “In a sense, 10 years ago, from the consumers’ point of view, it would have been easier to have a fourth network because there were fewer alternatives.

“Today, there is no fourth, there are 20--all of which are choices.”

Tremendous Cost

Advertisers, who foot the bill, are interested in reducing the tremendous cost of reaching a national TV audience on the existing networks. In general, said New York advertising executive Duncan Pollock, independent stations can offer advertisers of upscale products a lower “out-of-pocket” expense because so much of their audience is concentrated in urban markets.

Pollock, whose advertising agency, Ammirati & Puris, represents such clients as BMW automobiles, Sony electronics and Waterford crystal, said many of his customers have found network entertainment shows unattractive. BMW, for instance, has done most of its advertising on network news shows or sports events--”smaller audiences but certainly the right kinds of audiences.”

Others argue that the advertising marketplace is still not large enough to support a full fourth network and that the number and quality of independent stations is still insufficient.

Anyone attempting a fourth network would have to spend roughly $2 billion a year on programming, several executives estimated, a figure roughly equivalent to what Murdoch had to borrow to buy Metromedia in the first place.

Even MGM’s Gershman points out that the amount of programming involved in producing a network is far beyond what any one studio produces today.

Can’t Yet Compete

“I don’t think you can supply enough product to compete day-in and day-out with the networks at this particular moment in history,” Gershman said.

Fox’s Diller has heard most of the arguments before.

But like a gambler sensing a streak coming on, Diller thinks that the odds are better than others figure they are and believes that he and Murdoch have the talent and luck to make the best of them.

First, Diller argues, there are enough independent stations to reach a network-size audience. “You’ve now got access. . . . Now, will anybody pay attention to you? Do you have the flair to be able to get there with something? Up until very recently, it was absolutely not. It’s now maybe, maybe not.”

Diller thinks he has a chance because he believes that the three networks have lost their creative identities in their chase for ever slimmer margins of victory in the ratings.

The networks are now “so competitively juiced up that there is no juice left,” Diller said. “You really now have one network sliced three ways, one non-personality sliced three ways.

‘You Will Get Attention’

“If you can define yourself differently, then I believe you will get attention.”

Tribune’s Dowdle agrees. “In my estimation there are no set formulas, no set criteria anymore. There are more and more companies and more and more people in this business who have thrown away the book.”

One axiom not discarded, however, is that television is the mass medium, and success comes from finding that common denominator of taste that attracts the largest possible audience.

That guiding principle, television’s aesthetic, is likely to guide the new programmers, whether they succeed with ad hoc and occasional first-run shows, or something approximating a new network.

The reason, economists explain, is that economics pushes to reach the largest possible audience, which means airing programming with the lowest common denominator.

Splitting 90% to 10%

Assume, for instance, that three networks split 90% of the TV audience three ways, each getting roughly 30%, explained Los Angeles communications attorney Tracy Westen. If 90% of the audience is willing to watch sitcoms, no station will air cultural programming that attracts only 10% of the audience.

For there to be a real diversity of programming, Westen said, there would need to be 15 or 20 stations in every city.

The new programmers, too, talk of police shows, game shows and sitcoms.

“Will there be a change in sitcoms?” Tribune’s Dowdle asked. “If the American people start watching different kinds of sitcoms, and that is what they want, they will get it. They will get it in spades.”

“This is America. And there is too much money involved to have people get on crusades.”