Advertising Hall of Fame Interview: Kay Koplovitz Equates Chaos With Opportunity

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When Kay Koplovitz founded the first ad-supported cable channel, USA Network, in 1977, cable needed bundles of channels to succeed. Now, viewers are unbundling, making it "a very challenging time for advertising," Kay told me prior to her induction into the Advertising Hall of Fame.

An advertiser's message needs to be seen by "the exact person to whom it's going to matter," she said. "People don't mind the advertising, but they don't want to watch the advertising that doesn't address them. It's a chaotic time [and] a fascinating time."

Kay said she's been surprised at how quickly some of the upstart streaming channels like Netflix, Amazon and Hulu have produced "high-caliber" programming. And they've fostered the growth of binge viewing, a phenomenon that the established cable networks were forced to copy.

"I've always loved chaos because in chaos there's opportunity," she said. "Today we have some of the best-written and best-produced television series of all time."

When Kay began her career, the biggest challenge was to launch enough satellite dishes to receive signals from the new cable networks. Then HBO, at the time a client of Kay's, "changed the course of television history," she said, by telecasting via satellite the "Thrilla in Manila" boxing match in 1975 between Muhammad Ali and Joe Frazier.

But, she said, the questions remained: "How could you start a cable business with so few subscribers, and the ones that did exist were mostly in rural areas using cable antenna systems called CATV? And how could you deliver original programming without a business plan, nobody to sell advertising to [and] nobody to watch it?"

Kay's big idea was to reverse the network model: Have the cable operators pay for the programming and, in turn, give them timeslots to sell local advertising. The first package that Kay brought to the operators consisted of 125 events from Madison Square Garden, which was why USA Network was then called Madison Square Garden Network. She then added Major League Baseball, the NBA, NHL and more. "The cable operators were happy to pay for sports because they were gaining subscribers rapidly. The whole idea was to have live sports every single night and I achieved that in the second year," Kay recalled.

But then the company's ownership reorganized and no longer wanted MSGN—which it renamed USA Network—to be in sports. "I argued so hard for [another, separate sports network]. I think it was a huge mistake not to stay in sports," she said.

One other battle Kay lost—"It really angered me," she said—was a deal to buy FNN. She realized in the late '80s that financial reporting would be simple to cover. "You don't have to send people to war zones, you just have them at desks," she said. "And it was 24-hours-a-day trading." She partnered with The Wall Street Journal and, after a year of negotiating, had the needed approval. But just when she was literally signing the contract, Kay got a call from Sid Sheinberg of Universal Studios, who said he changed his mind.

And here's a story about a deal Kay thought she'd lost but ended up winning. She went to George Steinbrenner, the legendary head of the New York Yankees, to pitch him on carrying the team's away games. The first game, Yankees vs. the Red Sox, in April of '79, "went 11 innings. It was the perfect game to start with," she said.

The next day, Kay got a call from Bowie Kuhn, then commissioner of MLB, who told Kay she didn't have the rights to carry the game—even though she had the signed contract in front of her—and who threatened to get a restraining order to stop her from cablecasting more games. Kay told him she'd trade the deal with the Yankees for a deal with MLB to televise games from all the teams. "There was silence," she said. Then Kuhn said, "I'll see you in my office tomorrow morning at 9 o'clock, Ms. Koplovitz." And that was how she traded the Yankees for MLB.

In 1999, Kay started Springboard Enterprises as a venture capital firm to help women in tech raise money to bring products to market. Some numbers she cited: Springboard has brought 662 companies through the program, and her companies have raised more than $7.5 billion in venture capital. "Women still do not raise money at par with the market," she said, "but they outperform the market."

Kay said she has been most influenced by the great science-fiction writer Arthur C. Clarke, whom she heard lecture on geosynchronous orbiting satellites. "It had a profound effect on me," she said. It was a reason why she started the Syfy Channel (launched as Sci-Fi Channel in 1992), which combined her love of science and storytelling.

But, Kay warned, "we're in danger of people who don't believe in science influencing policies. ... I think we need to have more storytelling about the great scientists of the time and how they've actually impacted our society.

"So I think that's what I would say about who Kay Koplovitz really is."

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