Shifting From ‘News Values’ to Stock Values

Those who spent the past week in their vacation homes on the dark side of the moon are probably the only Americans unaware of the controversy surrounding ABC executives’ secretive attempt to lure CBS talk show host David Letterman to their network by handing him the 11:30 p.m. time slot long occupied by journalist Ted Koppel and his “Nightline” program.

The response by journalists, particularly in the electronic media, has ranged from outrage to terror. After all, by any conventional measure “Nightline” is a success--professionally esteemed, handsomely profitable and watched by millions each night. On many evenings, in fact, the show’s audience exceeds Letterman’s.

ABC executives roll their eyes and wonder why anyone would object to their doing anything legal to sign Letterman, who earns huge profits and attracts the impressionable younger viewers whose impulsively disposed-of incomes high-rolling advertisers covet.

Why the disconnect?

One key to understanding can be found in the financial press, where stories routinely refer to the networks as “Viacom’s CBS” and “Disney’s ABC.” When the broadcast networks were stand-alone enterprises, their news divisions were the lovingly polished jewels in the prestigious crown called public service, particularly at CBS. But today both ABC and CBS are simply business units in sprawling corporations whose “core business” is entertainment and whose unforgiving stockholders are remorselessly focused on the bottom line.

The Koppel controversy is merely the most public example of a television trend that has been accelerating for some time--the blurring of distinctions between news and entertainment in pursuit of profit. (Cognizant of this, such savvy professionals as Koppel, whose new contract reduces his on-camera obligations, and his ABC colleague Cokie Roberts have been edging toward graceful exits.) Examples of what the future may hold for the networks already can be glimpsed in two areas of informational broadcasting--legal affairs and sports--where what used to be quaintly called “news values” once prevailed.

One of these is the Court TV cable channel, now owned by AOL-Time Warner and Liberty Media. Court TV was once a purveyor of live trial coverage and expert legal commentary. It also was hovering on the brink of extinction, with a presence in just 30 million homes and an average prime-time audience of 38,000 sets. Five years ago, Court TV began programming reruns of syndicated cops-and-robbers shows, talk shows and docudramas. Today the channel is a staple of basic cable packages nationwide, with a presence in 70 million homes and a prime-time audience of nearly 750,000 sets. The cable industry regards it as a spectacular turnaround story.

Disney hopes to accomplish something similar with its “reinvention” of ESPN, whose ratings have declined by 27% over the past five years. Along with broadcasts of sporting events and sports news, ESPN is programming so-called reality shows, sports-themed variety shows and even a made-for-TV movie, “A Season on the Brink,” about college basketball coach Bobby Knight.

To some analysts, this direction suggests not simply a diminution of the networks’ news operations but the ultimate abandonment of serious journalism. “Some of their owners will decide that the traditional news divisions’ prestige value just can’t be justified to their stockholders,” says Martin Kaplan, who directs the Norman Lear Center at USC’s Annenberg School for Communications. “The only aspect of news they are likely to retain is covering entertainment, which is to say themselves.

“News, like everything else, is a profit center to them,” Kaplan says, “and it doesn’t get cut any more slack than any other profit center. If what delivers the audience is tractor pulls, then you’re going to see tractor pulls.”

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Future Looks Bright for Independent Publishing

Corporate consolidation, which is a business school euphemism for accumulation, has been wreaking its particular form of havoc among book publishers for some time.

But strangely enough, when it comes to books, the market’s invisible hand has refused to bless the economy of scale. In fact, it has given the outlets of conglomerate publishing--Random House, Simon & Schuster and HarperCollins, for example--a solid smack upside their managerial heads. Over the past year, they all have taken a beating on the bookstore shelves. As a consequence, they have laid off staff, sacked editors and slashed their book lists.

By contrast, independent publishers pursuing their industry’s traditional model--with its single-minded focus on publishing and intense author-editor relationships--are recording their best years ever. Books by Grove/Atlantic, W.W. Norton and Public Affairs, for example, are flying off the shelves, senior editors are earning bonuses and profits are up, on average, more than 10%.

Why?

Morgan Entrekin, who directs Grove/Atlantic, says his house’s devotion to traditional publishing allows him “more control over my overhead and of my risk. I can react faster to hard times and benefit more from my successes. Every year for the past five years we have had at least one New York Times bestseller, and that helps us in ways it never could one of the big guys with their huge administrative overhead and gigantic advances. For example, ‘Cold Mountain’ sold 1.6 million copies in hardcover for us, and I don’t think any of the big guys ever have done that sort of business with a literary first novel. But because our margins are better than theirs, we can also make money selling 6,000 or 7,000 copies of a good book.

“We have one title, ‘The Bureau and the Mole,’ on the bestseller lists right now, and our profits already are up 12% over last year; we’re up about 50% for the quarter.” (That title has become controversial because its author, David A. Vise, a Pulitzer Prize-winning Washington Post reporter, ordered 20,000 copies of his own book from Barnesandnoble.com, then returned more than 17,000 of them as part of a private effort to market his book. Rival publishers alleged Vise was attempting to manipulate the bestseller lists, but Entrekin pointed out that the book has sold more than 180,000 copies. Also, leading bestseller lists guard against manipulation by discounting bulk sales.)

In Entrekin’s view, the “megacorporations”--some of which were among those grumbling about Vise’s purchases--”will stagger along because the copyrights they’ve collected will sustain them on some basis for some time to come.”

But the future, he believes, belongs to independent publishers, whose numbers are bound to increase because “the price of admission just isn’t that high anymore. All you really need is a laptop and a convenient Kinko’s.”