The E! Repair, Year 2

Nearing his one-year anniversary as pres- ident/CEO of E! Networks, Ted
Harbert faced a dilemma. He had decided to drop out of the bidding when the
contract for E! Entertainment's top ratings earner, the televised incarnation
of Howard Stern's raunchy radio show, came up for renewal. But Harbert wanted
to see if he could hold onto Stern's prized young-male
demographic—particularly with programming that was less likely to spook
advertisers than Stern's porn-star–saturated show.

“I don't want late night to turn into some other version of T&A
jiggle,” Harbert says. So he tried an experiment: three new shows, including
a toned-down version of Wild On (a racy
travelogue that was also once an E! trademark), featuring Tara Reid as a
fun-loving party girl gallivanting around the world—but, for a change,
keeping her top on.

Taradise didn't end up in Nielsen nirvana. “The
male viewer it's designed for realized there was no nudity in it, and the
ratings were lower,” Harbert says. “That's just the way it works.”

Harbert (former head of NBC Studios and ABC Entertainment) had better
luck coping with another high-profile loss, the defection of caustic red-carpet
commentator Joan and Melissa Rivers to the TV Guide channel last year. In an
indication of how he is trying to make E! more Hollywood-friendly than it has
been in the past, Harbert signed Star Jones Reynolds, who can scarcely contain
her enthusiasm for all things celebrity, to replace the Riverses.

He also spruced up E!'s pre-ceremony Emmy coverage, deploying 17
cameras and running live shots in the corner of the screen during commercials.
Those changes, along with a bump up in interest in the Emmys this year, helped
E! to a jump from 1.21 million total viewers of its Emmy show last year to 1.79
million. (TV Guide's production drew 593,000.)

Harbert's mixed record so far reflects the difficulty of turning
around something as large and unwieldy as a television network, especially
when, like E!, it covers entertainment in a celebrity-obsessed culture and must
compete with Bravo, VH1 and countless individual programs covering the same
subject. Having done triage work in his first year, Harbert now enters his
second in that could be a make-or-break chance to rejuvenate the network.

Marketers say the E! brand itself remains strong but has been undermined
by a shotgun approach to programming in recent years, a prickly relationship
with Hollywood and a fitful financial performance that saw annual revenues
actually drop, by half a million dollars to $319 million, from 2002 to 2003.
And ratings have plateaued, with 404,000 total viewers in prime this summer
versus 400,000 last year.

Still, even though Comcast, which holds a controlling stake in E!, is
making high-profile investments in some of the cable company's other
holdings, such as OLN and G4, E! remains one of its most important programming
assets. Projected net revenue for 2005 is $366.3 million; OLN's is $143

“Yes, we're investing to get a lot of our other networks moving, but
E! is the priority,” says Jeff Shell, who in May filled a new slot as
president of programming at Comcast. “E! is our flagship brand.”

Harbert's sharp-elbowed predecessor, Mindy Herman, won few friends
even in notoriously forgiving Hollywood circles, and she left behind a network
with a reputation for tabloid-edged nastiness.

“It took these unnecessary turns to be mean-spirited,” says Larry
Namer, who in 1988 founded Movietime, the early incarnation of the network
rechristened E! in 1990. One of Harbert's priorities in his first year was
repairing the network's relationships in Hollywood. Now he has to capitalize
on any progress he made.

“With all the TV magazines doing so well, there's a lot of viewers
they can attract,” says Andy Donchin, director of national broadcast for
Carat, New York. “They just need to come up with a couple of hits.”

Harbert says he'll spend the money necessary to find those hits, but
“no one show is more important than the brand.” His brand-burnishing
efforts include swapping E!'s austere red-and-black logo for a more
fun-spirited, colorful icon. He also has instituted changes intended to keep
viewers hanging around longer—a challenge for a network that features
video-clip–heavy shows like The 101 Most
specials—including buying its first movie package (Fargo
debuted recently) and cutting down on commercial breaks by running promos as
pop-ups during programming.

Producers who do business with the network say they sense a new

“They're crystal clear on what they want to be: the network for the
person who reads all those celebrity magazines,” says Dave Noll, president of
independent production company City Lights, who has had dealings with both E!
regimes. “Before, it just seemed scattered, like they were trying to play
catch-up with other networks. Somebody there knows what they're doing.”

But as the man who founded the network that became E! cautions, the
grace period for executing a turnaround won't last forever. “A year is a
short time to measure, particularly when a lot of the year is spent undoing
what was done,” says Namer. “Now, if by next year it hasn't happened, you
really have to question things.”