Turner on TV

His role may have changed, but Ted Turner’s burning ambition - to

rule the TV airwaves around the world - remains the same. By Meg

Carter.

Big is beautiful in Ted Turner’s book. And powerful too. The former head

of his own international TV business, Turner Broadcasting System, is now

vice-chairman of the even larger Time Warner Inc, which took over TBS

last September. Turner is now getting used to answering to a new boss,

Time Warner’s chairman and chief executive, Gerald Levin. In spite of

this, he says he is as committed as ever to increasing his presence

around the world.

The dollars 6.5 billion merger of Time Warner and TBS resulted in a

restructuring of both companies’ activities. Until then, TBS’s domestic

business had centred on cable TV - it ran the cable news network, CNN,

and the entertainment station, TBS Superstation; overseas, it ran CNN

International and the entertainment channels, TNT and Cartoon Network.

Time Warner’s activities spanned movie production and distribution

through Warner Brothers as well as TV production and cable networks (it

operates 34 cable systems in the US), not to mention music, book and

magazine publishing, licensing and merchandising.

’After the merger, we substantially restructured and rationalised all of

the international lines of business,’ Phil Kent, the president of TBS

International, explains. ’The merger forced a complete rationalisation.

TBS handed four areas over to Warner Brothers - international

syndication, home video, licensing and merchandising and theatrical

distribution. It was decided that all international advertising

supported channels would go under the Turner side of the business.’

In his new role as vice-chairman, Ted Turner took on responsibility for

all Time Warner/TBS cable TV interests - including programming and

running the Time Warner systems along with running Time Warner

Entertainment’s Home Box Office network. He continues to oversee the

development of TBS’s international interests - CNNI, TNT and Cartoon

Network.

Turner says he - and Time Warner - remain committed to increasing

international business. Internationalism is one of the motivators behind

the development of CNN. But he is not shy of owning up to the

difficulties of achieving this goal. CNN’s international performance is

just about covering the losses of TBS entertainment channels around the

world that are still viewed by the financial department as a ’start-up’

business.

’We are breaking even in South America and Latin America and we are

losing in Europe and Asia. And that’s without a whole lot of programming

costs.

If we were doing a lot of original programming it would be worse,’

Turner says. Europe in particular is proving difficult. ’We are growing

our business in Europe, but it’s like newspapers in Britain - there are

so many channels it’s hard to be profitable because the audience and ad

revenue get split so many ways. Our entertainment networks aren’t making

money internationally.’

A major challenge is Rupert Murdoch’s attempts to dominate distribution

platforms around the world. The Murdoch-owned News Corporation and Time

Warner have already had their run-ins. In the US last year, Murdoch

failed to get his Fox News channel on to Time Warner-owned cable

networks in New York. In the tit-for-tat fall-out, Time Warner’s Warner

Channel failed to launch in the UK - it would have been part of Sky’s

multi-channel package.

Turner’s feelings towards Murdoch are, to say the least,

antagonistic.

One way in which he hopes to combat the growing dominance of his rival

is to place a greater emphasis on the local relevance of his stations’

content.

’I don’t think Rupert’s plan to try to dominate the digital platforms

and dominate the programming are working. His plans are failing

everywhere because nobody wants someone who doesn’t even have a country

- nobody knows where he’s from,’ Turner says. ’We don’t want to take

over anywhere. We want everybody to vote for themselves and have their

own language, produced and distributed by their own people in their own

country who have their best interests at heart.’

To this end, a new strategy is being honed - regionalisation - one that

would have happened irrespective of the Time Warner merger, insiders

claim.

The official line according to the CNN News Group president and

chairman, Tom Johnson, is that market forces are making CNNI, TNT and

the Cartoon Network more regionally relevant. ’This is being driven by

market demand for more regional news,’ he says. ’We are very pleased

overall with the international growth in advertising, subscriptions and

audience response, but recognise we are very thin in certain parts of

the world and must do more.’

Sceptics suggest the regional focus is as much being driven by

commercial expediency. With more local channels now competing for

carriage on national cable systems and pan-regional satellites, channels

will have to prove they are locally relevant if they are to stay on

air.

Previously, all network distribution, programming and advertising

reported to a single head of distribution in the US, Kent adds,

outlining the new structure. ’In order to be more reactive to a quickly

changing market - and, more importantly, to push decision-making into

the field - we planned (the new) structure across regional lines, Europe

and Africa, Asia Pacific and Latin America.’

Each region presents different challenges and opportunities and the

international operations. The business development director at TBS, Dan

Stone, says. ’We need to be flexible and keenly aware of what viewers’

and advertisers’ preferences are across different markets.’ There’s not

just one way to approach a market. He adds: ’Language can be modified,

as can programmes and schedules while keeping the essence of the brands

we represent.’

Until now, CNN was CNN in the US, CNNI everywhere else. Now, different

language and local variants will be rolled out. In March, TBS launched

CNN en Espanol in Latin America - a Spanish-speaking service with news

values tailored for the region. This summer, a CNN Asia service will

launch and, from the autumn, CNN Europe. The company is spending dollars

3 million on the infrastructure needed to develop this strategy in 1997

alone; a further dollars 3 million will be spent over the next five

years. This excludes programming and staff costs.

The aim of CNNI is not to compete with national broadcasters in any one

country, Chris Cramer, the CNN vice- president and managing editor, who

joined from the BBC last year, insists. Rather, it is to offer a more

locally relevant international news service.

’In my belief, it is no longer possible to provide a truly generic news

service,’ he observes. ’We are now providing services for many markets

and a variety of (local) tastes.’ It is likely to be a fine balancing

act. The more ’regionally relevant’ an international news service

becomes, the more likely it is to challenge local competitors in Europe,

such as BBC World or Sky News.

At the same time, CNNI must not - in Cramer’s words - ’surrender its

franchise for international breaking news’.

Regionalisation is also shaping the strategy for developing TBS’s

entertainment channels around the globe.

TNT, for example, is already adapted for different regions. The Cartoon

Network also has regional language variations.

Developing these entertainment services as brands in their own right, as

well as TV networks, has become a priority, Cartoon Network’s global

marketing and strategy director, Lisa Fernow, says. This is helped by

the TV merger. ’Warner Brothers has wasted no time getting behind our

properties,’ she claims.

Cartoon Network characters are promoted heavily within local Warner

Brothers stores, they enjoy the attentions of Time Warner’s

merchandising and licensing divisions and, in April, a publishing

spin-off strategy was introduced for the networks’ top characters.

It’s all about ’synergy’ - the close co-operation between, and

co-promotion of, Time Warner and TBS products.

And it is relevant to both programming and sales. Already, the

co-operation between CNN and Time magazine has led to Impact, a new

feature show, whose stories also feature in coinciding issues of Time.

Then there’s CNN SI - a US channel launched last year in partnership

with the Time Warner magazine, Sports Illustrated.

Such co-operation also extends to sales, David Levy, the executive

vice-president of international advertising sales at TBS, says. A recent

deal with Cathay Pacific resulted in the airline funding the production

of a regional show, Asia Edition. The deal also incorporated a sponsored

feature in Time magazine. ’Magazine and airtime sales are now working

closely together,’ he says. ’This co-ordination is not about

discounting.

It’s to promote brands and offer much better reach to consumers.’

For the foreseeable future, the print and TV sales operations of TBS and

Time Warner will remain separate. ’We’re experts in our business,

they’re experts in theirs,’ Levy explains. However, the relationship

between the two is getting closer. ’We’re already talking about a TBS

advertiser doing product placement in a Warner movie. Say an advertiser

like Pepsi appeared in a new Superman film which, in turn, was promoted

throughout Europe on Cartoon Network - it’s synergy all the way down the

line.’

Regionalisation allows advertisers far greater flexibility, Levy

adds.

’On CNN, we have 500 to 600 advertisers right now, around 25 per cent

are global. Yet while IBM, for example, is bought out of New York

globally, it makes no decision without asking each region whether a deal

makes sense for them.’ TBS is also considering offering brand owners

advertising sub-regions. ’It’s no secret that P&G, for example, doesn’t

have a lot of products that cross borders right now, so there are

opportunities for us to get them and attack them in a different

way.’

For all this fighting talk, a major obstacle for advertisers remains the

lack of detailed ratings data for global and pan-regional cable and

satellite channels. TBS executives may boast about their channels’

global coverage - with 55 satellite transponders employed around the

world, the only places CNN, for example, cannot be received are

Greenland and Siberia - but many international advertisers regard using

TBS channels as an act of faith.

Another question mark hangs over future plans for channel launches

around the world. Observers note that the abandonment of the Warner

Channel launch in Europe may not have just been down to disagreement

with Murdoch. ’Time Warner is a large company made up of a number of

powerful fiefdoms,’ one suggests. ’Add to this mix TBS, which already

has its own entertainment channels, and just who would future Warner

Brothers entertainment channels really benefit? Not Ted.’

Turner, is quick to quash any suggestion of differences between him and

the rest of the organisation. ’It’s only been six months. Like everybody

else, I think I’ve been part of trying to create a new spirit of

co-operation and cohesiveness for the company,’ he says. Of his

relationship with Levin, Turner adds: ’He’s a decent human being and

thinks a lot in the same way I do. I’ve known him for a long time.’ He

plays down his long-held ambition to run his own US TV network: ’I’ve

got networks, but they’re cable networks. It’s getting hard to tell

what’s a network and what isn’t.’

His priority now is to outperform the big networks back home while

continuing to nurture international business and stand his ground

against Murdoch.

Time will tell - literally - if he can make this dream come true.

Turner on international business:

’We are breaking even in South America and Latin America and losing in

Europe and we are losing in Asia. And that’s without a lot of

programming costs. If we were doing a lot of original programming it

would be worse’

Turner on Europe:

’We are growing our business in Europe, but it’s like papers in Britain

- there are so many channels the audience and ad revenue get split many

ways. Our entertainment networks are not making money

internationally’

Turner on dreams for a US broadcast network:

’I’ve got networks, but they’re cable networks. It’s getting hard to

tell what’s a network and what isn’t’

Turner on Murdoch:

’I don’t think Rupert’s plan to try to dominate digital platforms and

programming is working because nobody wants someone who doesn’t have a

country - nobody knows where he’s from’.

This article was first published on Campaign