Focus : E! for Expansion

E! (the E for entertainment channel, the ! for emphasis) is on a rampage. It owns much of Los Angel es now and charges full force into Manhattan in July. It figures to swallow the United States in three to five years. Then . . . the world!

Well, E! executives get an E for Enthusiasm. They may have bloated ambitions but clearly are proud parents of their adopted child channel. “We define ourselves in a lot of ways,” said network president and chief executive officer Lee Masters, citing his slogans. “It’s People Magazine on TV, ‘Entertainment Tonight’ 24 Hours a Day and the CNN of Entertainment News.”

As E! is about to celebrate its first birthday Saturday, Masters boasts that ever since a consortium of cable interests bought the 3-year-old Movietime network, the round-the-clock E! has grown in all directions. The annual $30-million budget is overspent (he won’t say how much: company policy) but projected break-even is early 1992.

E! has been expanding on Movietime’s short-program forms because advertisers want viewers to stick around for longer shows. E! now does specials and live events and recently added “Extreme Close-Up” and “E! News Week in Review.” A nightly “E! Daily News” spot-news show is set to debut in August, with other series in heavy development: “Early next year we’ll be rolling into our ‘Phase 4,’ our prime-time block of three-hour daily strips,” Masters said.

Another measure of success is “subs”--subscriber homes. E! counts 18.5 million such subs (in 775 systems), up 4.5 million in the year. Why doesn’t E! reach all 54 million cable homes?

“Well, that’s the challenge,” Masters said. “But that’ll be resolved in three to five years.”

Masters said that even the 4.5 million total amazes cable watchers, because the problem is “channel lock”--when all the channel space is locked up. But fiber optic and “video compression” technologies, both of which exponentially expand channel capacities, are spurring cable operators to rewire their systems.

As the channel’s programmer, Fran Shea, a veteran of HBO and Cinemax, had to fill up 24 hours of E! Her first goal--star power: “We run on celebrities,” she said. “And we wanted to deliver credibility and a good product back to them.”

She wooed the Hollywood community: “I had to get James Woods, for example, to lend his time to us and you have to say, ‘This is what we need from you--we need an interview and more.’ We were asking (stars) to do ‘Shameless Plugs’ (they playfully hype their new projects) or ‘Fans Ask’ (on-camera fan questions and star answers are spliced together).

“And (Woods) asks back, ‘What do I get back for this?’ We said, ‘Well, we won’t just give you sound bytes (brief clips) back. We’ll give you a longer interview. If you spend a half-hour with us, maybe we’ll cut it into a longer piece or two pieces. ‘It won’t be on the ‘Today’ show once. Yes, their audience is huge, but we have a repetition schedule and we can give you a couple prime-time plays and maybe morning plays.’ ”

“Shameless Plugs” frightened publicists at first--but when Arnold Schwarzenegger saw the humor as well as the marketing potential for “Total Recall,” he gladly did it; other stars turned eager.

“When ‘Dances With Wolves’ came on and we were doing publicity for it, Sly Stallone was sitting at home watching all this stuff,” Shea recalled. “His publicist called and said, ‘How do we get this kind of coverage?’ ”

Stallone was a happy hyper: “He asked for everything,” Shea said. “He did ‘Shameless Plugs,’ tags, everything. He did it all. He’s a great guy.”

Shea said she doesn’t see conflicts with such a celebrity-friendly atmosphere and E!’s expanding harder-news coverage: “But we have to be very careful not to go to ‘tabloidism,’ ” she said. “We know from our audience--we do a lot of research--they don’t want a lot of half-truths and speculation; they want the truth.”

(In illusory Hollywood, of course, truth is relative. Gossip--basically true in different variations--is integral to the scene. Michael Castner does E!’s “The Inside Word,” formerly titled “True Gossip.”)

Masters, widely credited as the programming genius behind MTV, seemed thrilled with this assignment: “We call it Guerrilla Television. We’re inventing the medium here--original programming on basic cable.”

He recalls his 19 years in radio, particularly the creative explosion on the FM dial. E! reminds him of those days.

“I think we’re on the cutting edge of something brand new,” he said. “Well, this is tougher than FM in the early ‘70s. Then you just needed a couple records.”

Since E! is so much Hollywood, there would seem to be grand opportunities in a world market hungry for Hollywood.

“We have a terrific advantage that a lot of other channels and networks don’t have,” he said. “We own our own products--we make it, we own it. We don’t get any off-net shows (former network series) and entertainment is the No. 2 export of the United States.”

But, he acknowledges, world domination will have to wait. First, he has to conquer this country.