Independents’ Day : After Years of Obscurity, the Time for Non-Network L.A. Stations Has Arrived
Bob Hope served as emcee of the first commercial TV show broadcast in the western United States, a variety show beamed from a Paramount sound stage by a station that later became KTLA Channel 5. Everybody was impressed that the January, 1947, broadcast reached an estimated 500 TV sets--an audience just about as large as the 506 entertainers, technicians and sidekicks who put the show together.
The event was also memorable as the start of the Los Angeles independent, or non-network, television business. Since that day, the city has become the center of what is by far the biggest and most prosperous collection of independent television stations in the country.
The “indies” of Los Angeles and Orange counties have overcome the disadvantage of not having a major network affiliation to claim about half the advertising revenues in what is now the nation’s largest television market.
“They really are in a class by themselves,” said Harry Pappas, president of Pappas Telecasting, an independent chain based in Visalia, Calif.
The independents in the market are sometimes divided into three groups: The four biggest stations, KTLA, KTTV Channel 11, KCOP Channel 13, and KHJ Channel 9; two fast-growing Spanish-language stations, KMEX Channel 34 and KVEA Channel 52; and half a dozen others, most of which specialize in religious or foreign-language broadcasts. (The number of stations in the third tier depends on how many are included from outlying communities.)
The desirability of the stations has been evident in recent years as large corporations have bought up Los Angeles stations at dizzying prices. Golden West Television paid $245 million to buy KTLA from Gene Autry in 1983, establishing a record price for a single station purchase.
Two years later Tribune Co., parent of the Chicago Tribune, topped that record by paying $510 million for the same station, establishing a record that still stands. Australian media baron Rupert Murdoch paid about $450 million in 1985 to make KTTV the flagship of his Fox Television Network; Walt Disney Co. last year offered $320 million to buy KHJ from RKO General.
Disney’s bid itself attests to broadcasters’ passion for the stations; it is the latest suitor seeking to buy KHJ in a 22-year-old dispute over the station’s license.
The strength of the Los Angeles indies is due partly to historical accident: They have been around as long, or longer, than the market’s network affiliates. KTLA, originally owned by Paramount Pictures, was the first television station of any kind west of the Mississippi when it went on the air in 1947.
KHJ, KTTV, and KCOP, now owned by Chris-Craft Industries, were established in the 1940s and early 1950s before or at the same time as the network stations. Although they have suffered through long periods of ratings weakness and financial trouble, their longevity helped them become habit viewing.
More importantly, they were all VHF, or very high frequency stations. Such stations can broadcast farther than the the ultra high frequency (UHF) stations that make up more than 90% of all independents. The VHF stations are also assigned lower numbers on the dial--2 through 13--making viewers more likely to turn to them.
The independents have exploited these advantages with expensive programming. Together they offer more local news than independents in any other market; they also spend heavily on sports, movies, syndicated shows (shows that are sold directly to stations in various markets) and coverage of special events, such as the Rose Parade.
They have been responsible for more than a few broadcast innovations. KTLA made broadcast history in 1949, when it put on 27 1/2 uninterrupted hours of the coverage of the unsuccessful attempt to rescue a small girl named Kathy Fiscus after she fell down a well in San Marino. The station was also first to show wrestling and boxing.
While the four independents’ fare is similar in many ways, each has striven to achieve its own emphasis in recent years. KTLA schedules many hourlong action shows, such as reruns of “Magnum, P.I.” and “Emergency;” KCOP is known for the syndicated game shows “Wheel of Fortune” and “Jeopardy;” KTTV draws a sizable teen audience with reruns of “Family Ties” and “Three’s Company,” and KHJ has relied on the simulated court dramas “People’s Court” and “Divorce Court.”
The independents’ sales departments have always had a more difficult job than those of the affiliate stations. While about 70% of the affiliates’ air time is filled with network programming, the independents must sell advertising for 100% of their on-air hours.
Since many advertisers prefer to buy spots on the network stations, the independents are forced to keep their ad rates below those of the affiliates in most cases. “Some of these advertisers really have a 14th-Century attitude,” groused Rick Feldman, KCOP station manager.
But the independents get their share. Their 49% share of the local TV advertising revenue in the Los Angeles market came to about $445 million in 1986.
The biggest of them, KLTA, alone generated revenue of $107 million in 1987, with profits of more than $20 million, estimated Charles Crane, analyst with Prudential-Bache Securities in New York. Paul Kagan Associates, a Carmel consulting firm, estimates that KTLA could probably top its record sale price of $510 million by another $90 million if it were sold today.
The Tribune Co. “has had no regrets at all about the purchase,” said Michael Eigner, KTLA station manager.
The independents are happy to point out that the affiliates’ share of prime-time household viewership in the Los Angeles market has also been declining. A. C.Nielsen Co. figures indicate that the three affiliates’ share of prime time viewing declined to 64% of households in November, 1987, from 81% in November, 1977.
Some broadcasters theorize that the big independents may have done well because Los Angeles, with its population of iconoclasts and recent immigrants, is simply less wedded to the American habit of turning the dial to the network stations. “What’s traditional in America is less likely to be the case in Los Angeles,” said Terry Pittman, director research at KCBS Channel 2.