ABC Plans Close Ties to Sister Cable Channel

Walt Disney Co. is developing a strategy to link in an unprecedented way its ABC television network and its new sister cable channel, ABC Family, which it acquired in the $5.2-billion purchase of Fox Family Worldwide in October.

To expand the audience for its shows and generate new advertising revenue for the struggling network, beginning in January ABC will use its companion cable channel as a secondary outlet for a range of programs, including prime-time dramas such as “Alias,” family comedies such as “The Wonder Years” and even repackaged news from ABC.

The new channel also will give Disney a platform to cross-promote movies, such as “Harry Potter and the Sorcerer’s Stone,” for which Disney recently acquired the broadcast rights in a record deal with Warner Bros. And ABC Family could serve as a testing ground for new programs that may find their way on the network, company executives said.

“It allows you to break tradition,” said Steve Bornstein, president of ABC Broadcast Group.

The new channel reflects the growing push by the broadcasting industry toward “repurposing,” the rebroadcast of a show on cable shortly after it has appeared on network television. Hit by rising programming costs in the last decade and declining ratings, networks are searching for ways to squeeze more value out of their programs. One way to do that is to create multiple outlets for a show, generating more exposure and advertising revenue.

“The old economics of network television just don’t work anymore,” said David Miller, a media analyst with Sutro & Co. in Los Angeles. “One solution is to sell a [program] to a cable network right after the broadcast airing. That concept is particularly attractive if you own the cable network as Disney does.”

Other networks have dabbled with repurposing and cross-promotions between networks and cable channels, but none has done so on the scale Disney is proposing, Miller and other analysts said.

Disney, which has been under pressure to expand its holdings amid competition from rivals such as AOL Time Warner, acquired Fox Family from News Corp. and Saban Entertainment in October. The acquisition adds 81 million domestic subscribers, 24 million subscribers in Europe and 10 million in Latin America to Disney’s lucrative cable holdings, which include the Disney Channel and SoapNet. Disney also has stakes in A&E;, Lifetime and E! Entertainment.

The launching of ABC Family comes at a critical time for ABC, which faces a bleak advertising market made worse by the events of Sept.11 and a ratings slide in the last two years. ABC will place fourth in the latest sweeps period in the 18-to-49 age demographic group coveted by advertisers.

But Bornstein expects the channel will help expand the audience for ABC’s new shows. “I don’t think there’s any question that by giving a show incremental outlets, many people will be able to sample it, see that it has the real goods and watch in on a regular basis.”

Repurposing isn’t new. Barry Diller’s USA Networks Inc. pioneered the practice in 1999 with its drama “Law & Order: Special Victims Unit.” That show airs on NBC and repeats nine days later on USA’s cable network. A similar arrangement exists with the spinoff “Law & Order: Criminal Intent.”

The extra exposure has helped the show’s prime-time and cable ratings, while adding an important value to USA, said David Kissinger, president of USA Television Production Group.

Disney also was an early player in repurposing. “Once and Again” airs on ABC and then a few days later on Lifetime. SoapNet also rebroadcasts soap operas aired earlier in the day on ABC.

“It’s becoming almost a routine aspect of negotiations between studios and networks,” Kissinger said. “What’s going on at Disney will accelerate that process. “

ABC executives won’t say how much programming they will recycle, but its contract with affiliates allows it to repurpose up to 25% of the prime-time lineup. Some network executives fear that repurposing can overexpose shows, diluting their value for syndication.

And many affiliate TV station operators also worry that the practice could drive viewers from network television to cable.

“The question is not, ‘Is it going to happen?’ but, ‘Is it going to happen in a way that protects the base business?”’ said Alan Bell, president of Freedom Broadcasting Inc., which owns several ABC affiliate stations. “What you want to make sure of is that you don’t get so greedy and kill the goose that laid the golden egg.”

Bornstein said ABC will be very judicious in repurposing.

As part of the new strategy, ABC will hold an “Alias” marathon of the first 10 episodes of the spy drama, possibly on New Year’s Day, on ABC Family. The channel also will rebroadcast the ABC prime-time comedy “According to Jim.” The lineup also will include repurposing non-ABC-owned programs. Disney recently completed a complex deal with Warner Bros. television that grants it rerun rights to the upcoming dramatic series “The Court” on ABC-owned cable channels within eight days of its initial network broadcast.

ABC has made it clear to other program suppliers that they need to consider dual programming as part of negotiations, said Kissinger of USA.

Building on Disney’s core family fare audience, the new channel’s lineup will include a two-hour comedy block from 7 p.m. to 9 p.m., featuring ABC shows from the children-oriented “TGIF” lineup of the 1990s, such as “The Wonder Years” and “Growing Pains.”

ABC Family won’t carry repeats of ABC news programs, but it will offer repackaged news, using footage and interviews from the extensive ABC news library. To offer more programs for the key 18-to-49 demographic, in which ABC has been weak, the new channel will scale back children’s programming from 10 hours to three hours a day.

ABC executives stressed that they also will offer some new programs. ABC Family also will keep “State of Grace,” the channel’s No. 1 series.

The new schedule also will include televangelist Pat Robertson’s daily talk show, “The 700 Club.” Many have speculated that Disney might try to cut its ties with Robertson, who once blasted Walt Disney World for hosting Gay Days and whose show occupies valuable daily time slots, 10 a.m. and 11 p.m. But Disney is committed to carry the show as part of its Fox deal and has no plans to buy out Robertson’s contract, executives said.

A spokeswoman for Robertson said Disney’s family audience is a good fit with the show.

ABC Family also could be a testing ground. Without the competitive pressures of network television, cable is an ideal medium in which to test and nurture new shows, Bornstein said.

Industry analysts say Disney is likely to succeed where Fox and Saban did not because the channel fits better with Disney’s core family audience and Disney can do a better job promoting and packaging shows across many divisions.

But analysts caution that the company could have a tough time meeting its financial targets because of the sour economy and potential distribution problems with cable operators. Many of the network’s carriage contracts are up for renewal.

Anne Sweeney, president of ABC Cable Networks Group, would not comment on specific negotiations but said she was confident that ABC Family would not face carriage problems. “Family programming has never been more important to Americans.”