Upfront 2010

Why Broadcast and Cable Are Starting to Look the Same

Turner President Steve Koonin on Conan O'Brien, New Economics of TV, Why Networks Must Take Risks

By Published on .

NEW YORK (AdAge.com) -- Steve Koonin looks like a genial everyman, the type of person you might see in a TV ad talking pleasantly about car insurance or family cellphone plans. In reality, he's an aggressive marketer who wants to make a place for his products, which happen to be TV programs.

Steve Koonin
Steve Koonin

Mr. Koonin, a former marketing executive at Coca-Cola who now is president of Time Warner's Turner Entertainment Networks, is used to plugging away at a competitor or two. At one time, he may have had Pepsi in his sights. These days, he and his colleagues are using cable's business model -- one that depends not only on ad dollars, but also on fees from cable systems -- to help bolster events and programs on networks that would in years past be found only on broadcast.

The Time Warner cable outlets (Mr. Koonin supervises programming on TBS, TNT, TruTV and Turner Classic Movies) have a lot of wind at their backs. When NBC decided to cancel its critically acclaimed police drama "Southland," citing its dark storylines, TNT was able to pick it up and make it a going series. When CBS found it necessary to find a new way to finance the NCAA men's basketball championships, Turner stepped in, and will soon air many of the games on its TBS, TNT and TruTV cable outlets. And when late-night host Conan O' Brien saw negotiations for a late-night show on News Corp.'s Fox network break down, Turner found a way to get the comedian on TBS starting this fall.

While Turner's networks are starting to look like an alternate-universe version of CBS or NBC (due to the reliance on top broadcast shows such as "Law & Order" plus the new additions), their finances are different, thanks to dual revenue stream. At a time when outlays of ad dollars have been shaky, that's a crucial distinction.

Mr. Koonin discussed with Advertising Age the new models that have begun to emerge, described the shape of Mr. O' Brien's new show and explains why aggressive marketing can sometimes help bolster a TV network's cause.

Ad Age: Do you think viewers differentiate between a CBS and NBC and TNT and USA?

Mr. Koonin: The only people who use the terms "broadcast" and "cable" is our industry. ... I've never been in a place where someone says, "Huh, Marge, what do you want to do? It's Wednesday night." "Let's watch cable." "No, I was thinking broadcast." That's not the way they watch.

Ad Age: You've got a new late-night show starting in November, and you've won rights to broadcast a major sporting event. Is this part of a larger building process? If so, what else is on your shopping list?

Mr. Koonin: It's analogous to the beverage business. There was Coke and Pepsi, and several years later there are a thousand other beverages. People are trying water and juices and teas. It's the same thing: Whenever consumers are given choice, they go find it. Cable created choice and choice creates opportunity. We see that opportunity now is to try and build some of the scale and reach of broadcast, but really and truly not repeat the pitfalls. [Broadcasters] are trying to be all things to all people. We're not. ...

What we've been able to do with Conan [O' Brien] is knock down another wall broadcast had, and that's late night. I think we have the late-night duo for the next decade. What we have with NCAA's is a piece of programming that has geographic applications in Peoria and Seattle, Wash., and Miami, Fla., which is very, very rare. Even the NFL is only in 32 cities. We are able to take these building blocks and continue to build upon them. Our shopping list is to find the best dramas and best comedies off broadcast -- premium content -- and build our own premium content, because at the end of the day, that's really what we are selling: premium content which creates a great environment for advertisers.

Ad Age: How about a morning show?

Mr. Koonin: I would never say never, because I would have said never to late night three years ago, so possibly, yeah. It's not on the drawing board today.

Ad Age: There was talk you folks were initially cool to the idea of going after Conan. What changed your minds?

Mr. Koonin: One of the big lessons -- we learned a lot of lessons -- is don't assume everything you read, no offense to the press. ... Everyone assumed [the Conan deal] was done [with Fox]. Our motivation was, in doing our strategic planning, we saw that ["Tonight Show" host Jay Leno] instantly aged up. His average audience is now 56, it's 22 years older than ["Lopez Tonight"'s George] Lopez. You know, if the audience for Conan is 47 on NBC, with news as a lead-in, putting him in our environment, we can go really young. When we read there was a crack in what everyone, including us, assumed was a done deal, we made our plans and we moved.

Ad Age: In terms of ratings , people don't expect Conan's new show to match Leno's current one. Explain the economics of the situation and how you'll make this work.

Mr. Koonin: Our model is different than NBC's. We will air the show at 11 p.m. and 2 a.m., first of all. We will also do a stack of his best of the week on Friday nights. ... We think the aggregate rating will be very strong and make it a very profitable program for us. Remember, Conan O' Brien is not doing "The Tonight Show." We don't want "The Tonight Show." That's an institution. We want Conan to be his own creation, and that creation will cost less than "The Tonight Show," and we think it will give us comparable ratings to anything premium on cable or broadcast.

Ad Age: Are you folks any better than the broadcast networks in picking true hits?

Mr. Koonin: We don't keep a scoreboard. That doesn't behoove us. We have launched acclaimed, award-winning heavy-audience dramas. On comedy, it has been much more elusive -- for everyone. There is a statistic I won't be precise about, there have been over 700 comedies launched over the last 16 years, and 10 are hits on cable. ... We have seen a lot of success in hour comedies -- "Desperate Housewives," "Monk" -- and we've been developing four one-hour comedies that we should see coming off the pipe.

Ad Age: What's your definition of a hit? "Men of a Certain Age" isn't "24."

Mr. Koonin: When you add in the DVR, [the audience for 'Men'] is a little under 5 million people. We evaluate programs on three elements. First is critical respectability. They don't have to be critically acclaimed, because there are a lot of shows that are critically acclaimed shows that don't attract audiences, but they have to have critical respectability. Second is value to both advertising clients and cable operators. All this programming is the reason people subscribe to cable. Third is the ability to grow. When we look at "Men of a Certain Age," critical respectability is a check-plus. When we look at value to advertisers and cable operators, is this an environment people want to be in? "Men of a Certain Age" has a very unique premise to talk to men and the women who love them. And the ability to grow? We launched that in the teeth of the broadcast season. We think we can and we will do better.

Ad Age: Not everything you take from broadcast is bound to flourish. What has your experience been with "Southland"?

Mr. Koonin: You had 13 episodes, seven of which had run, the first four to great fanfare on NBC, replaced "ER," led in big, and the last six that we had never seen. We didn't know exactly how and what to do. Do you start with No. 7 and hope everyone saw it on NBC? Or do you start it with No. 1? So we just went back to the beginning and the first seven weeks were OK. The last six episodes have been astounding. I saw the DVR raised the number 70%, which is why I say the DVR is important as a programmer. To me, if somebody is taping it, it's the absolute No. 1 act of engagement.

Ad Age:In the recent past, you've made some very aggressive marketing moves. One of them involved an on-air promo on TBS in which comedian Bill Engvall came out on the bottom of the screen during episodes of "Family Guy," started talking over the show, stopped the show and kept on talking. Do you think viewers appreciate seeing that?

Mr. Koonin: It's a hard call, because when you do something like that that gets so much attention, it says to me that it's working. What you've got to be careful of is that working can be defined positively or negatively. I think we were very careful that we only interrupted the last four seconds before a break, so you truly missed no programming. ... We have seen and we have learned that with the amount of clutter and images people see in a day you have to stand out to be heard. ... I think right now we're kind of split internally. I think I would do it again with the right show and the right circumstances. I think I might make the interruption a little funnier so there's more value. If you paused it and people were hysterically laughing, it would be a welcome interruption. If you paused it and people are like, 'What the hell are you doing?' it wouldn't. But we've got to try new things. The only way we fail is to stay pat.

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