How USA Got to the Top of Cable
If you’ve ever wondered what most people watch on basic cable during the competitive evening hours, it isn’t the music videos of MTV, the sports of ESPN, the news of CNN or anything on any other cable station owned by Ted Turner. USA Network was the prime-time leader among basic cable networks through most of 1990. Unwilling to narrow its focus with limited interest programming the way most cable channels do, USA has branched out with original and syndicated programs to attract the broadest audiences possible.
“USA has become the independent TV station of the ‘90s,” said Larry Gerbrandt, senior vice president of the media research firm Paul Kagan Associates. “The majority of independent stations have become affiliates with Fox (Network Television). So the movies and hourlong syndicated programs you used to see on independent are now on USA.”
With a subscriber base of 54 million homes, USA is the fourth-largest cable network behind ESPN, CNN and TBS. The network’s surge to be No. 1 in actual prime-time viewers during 1990 was the result of aggressive moves that lifted the 10-year-old network from a stock player to a feature performer. Consider:
* In 1988, USA president Kay Koplovitz made a whopping $250-million commitment to develop original programming over two years. In 1989 the network produced 24 original films; in 1990 the network made 30 films and debuted two original prime-time series, the action-adventure “Counterstrike” starring Christopher Plummer and “Swamp Thing,” based on the popular 1972 comic book.
* In the last two years USA has purchased pre-syndication rights for 115 major feature films for record prices totaling $216 million. The high-profile titles include “Born on the Fourth of July,” “Back to the Future II,” “Beverly Hills Cop II” and “Good Morning, Vietnam.”
“We’re not buying films in bulk to stock a library,” Koplovitz said. “Our strategy is to acquire big-name theatrical movies that people want to see.” In addition to buying major movie packages from Paramount Communications and MCA Inc., the co-owners of USA, the cable network purchased films from Buena Vista Television, 20th Century Fox and Orbis Communications.
The primary customer of such movie packages used to be the broadcast community, either the major networks or groups of independent stations banded together. Dick Kurlander, vice president and programming director for Petry Television, a New York-based rep firm, said that USA’s monster movie buys are changing the face of the TV industry.
“The traditional feature film flow to stations has been eroded and now it’s moving to cable,” he said. “The whole problem is that the economy has worsened and Fox has expanded, taking away potential buyers for these movie packages. I don’t know where the remaining independent stations who depend on these movies are going to get them from in the future.”
This is not the first time USA has capitalized on a sagging TV marketplace to strengthen its network. Several years ago the bottom fell out on hourlong syndicated dramas as the demand for half-hour sitcoms grew. USA took advantage in 1987, purchasing 92 episodes of “Miami Vice.” The next year it bought 111 hours of “Murder, She Wrote.”
Those two shows, plus “MacGyver” and “The Equalizer,” are solid performers today for USA.
“We’re a counter-programmer,” said programming vice president David Kenin. “What we’re trying to do is serve a viewer who, in a multichannel environment, is not getting a program he wants to watch. You look at weeknights at 8 on network television and all you see are sitcoms skewed toward a younger audience. So at that time we run ‘Murder, She Wrote,’ which attracts older viewers. You don’t see a lot of adventure on TV at 7 p.m., so we run ‘MacGyver’ then.”
USA was launched in 1977 as the all-sports Madison Square Garden Network, owned and operated in part by Madison Square Garden. The network gradually turned to entertainment, spurred on in 1981 when Time Inc., MCA and Paramount acquired ownership.
Today USA holds just a part-time interest in sports, featuring weekly boxing and World Wrestling Federation matches, and providing at least partial coverage of such events as U.S. Open tennis, PGA golf and the World League of American Football, beginning in March.
One thing you won’t see on USA is news.
“News is very costly to do properly,” Koplovitz said, Rand there are so many news sources already, not just the three broadcast networks and their affiliates, but CNN, which is a stellar performer on cable. We just think there’s so much available in the news category we can spend our resources in the entertainment category, where we believe we excel.”
In October the network premiered “Dog House,” a weekend afternoon sitcom about a family with a talking Saint Bernard. Koplovitz said USA’s next major push will be into more original prime-time series.
For several years the network has been rewarded-with ratings and cable awards-for its anthologies “Alfred Hitchcock Presents,” “The Ray Bradbury Theater” and to a lesser degree “The Hitchhiker,” which USA took over from HBO. Those three series, plus “Swamp Thing,” constitute USA’s Friday night lineup.
“Originally we found we could get better star value for our budgets with anthologies,” Koplovitz said. “There’s no question you can get top-notch actors and actresses doing those series because they only take a week to shoot.”
Such cost considerations are important because USA, like other basic cable services, does not have the money to spend on programming like the networks do. “That’s USA’s biggest liability,” Gerbrandt of Paul Kagan said. “USA still can’t spend on a per-hour basis what the broadcast networks spend for original programming. They are handicapped economically by the fact that cable is only in 60% of U.S. TV homes.”
Unlike broadcast networks, however, basic cable networks have dual revenues, receiving money from cable operators, just as premium pay cable channels do, and money from advertisers, as broadcast stations do. Koplovitz insists that USA’s programming gold rush is being paid for by advertisers, not consumers.
General manager Tom Belcher of the San Fernando Valley’s West Valley CableVision said that USA subscriber rates have gone up, but no more than other basic cable channels. “In the last couple years basic cable rates have gone up 40%,” he said. “That continues to grow as customers demand original cable programming instead of network retreads.”
Advertisers, however, have noticed the difference. Paul Isacsson, executive vice president of Young & Rubicam Inc. in New York, said that most of his clients buy advertising on USA.
“Cable advertising is more affordable than network television,” Isacsson said. “USA, I think, stands out as a general interest channel, as opposed to ESPN or CNN which are vertical channels. The only thing that compares to USA on cable is TBS .... USA is more like a broadcast station in its appearance, when you look at its schedule of programming.”
Ironically, in a competitive cable field filled with narrowcasters, USA’s future appears bright because of its broad programming schedule. To achieve successful ratings, USA may show a movie or series several times in the same week, giving people numerous opportunities to catch a program.
“Cable is designed to be, in a way, more user-friendly to the way people live and watch television,” Gerbrandt of Paul Kagan said.
He continued: “Instant entertainment. Television used to be viewing by appointment. Now we sit down, flip on the TV and roam 30, 40, 50 channels