Michael Jackson's Universal TV View

Since his appointment one year ago as Universal Television Group chairman, Michael Jackson has positioned the group as one of the few bright spots for troubled Universal Vivendi Entertainment. The former British TV executive oversees a diverse teaming of entities: cable networks USA Network, Sci Fi Channel, Trio, NewsWorld International and 50 percent ownership stake in Sundance Channel; production studio Universal Network Television; syndication arm Universal Domestic Syndication & Distribution and pay-per-view content provider Universal Television Distribution. He recently sat down with
Multichannel News programming editor R. Thomas Umstead to recap his first year as head of the group. An edited transcript follows.

MCN: With a year under your belt, how would you characterize the Universal Television Group in terms of its overall value and standing within the telecommunications industry?

Michael Jackson: I think the thing that most struck me when I arrived about a year ago was just what a great business the cable network business is.

People are really hungry for shows with a point of view that differentiate themselves. I think cable has the great advantage of not being a seven days-a-week original business, so you can get really get behind a few special projects. I think you can show to the creative community, and to the viewers, shows like Monk, The Dead Zone
and Taken
— and go toe-to-toe with anyone, including the networks.

MCN: You mentionedMonk. While USA has the premiere window for the series, are you concerned that ABC may look to grab the first window for itself during the second season?

They can't because we control the show.

MCN: True. But there is speculation ABC might try to buy first-run rights to the series from USA.

I think that's unlikely. One of the things we're trying to do is to grow USA by saying to the viewers and advertisers that there'll be some special things available on the channel.

One of the dangers of being a general-entertainment network is that if you're over reliant on other people's content, by doing so, you end up paying good money to help other people, and you don't create valued, unique content. So we need to have some of that unique content — whether it's sports or original dramatic content. It helps every other part of our business.

That's not to say that we don't want to continue what I think has been a pretty interesting record of innovating in terms of repurposing or working with competitors. I think the ABC window will help Monk's
backend value — I think it could be the first cable show that could work well in syndication.

MCN: How would you define the USA Network brand at this point?

Jackson: Really, the only general-entertainment network that has a brand in my view is [Home Box Office]. I think Fox has a residual point of view, which is very powerful in the [telecommunications] market. I don't really believe that NBC or CBS or ABC has a brand.

We don't have a brand strategy at USA, we have a program strategy. The brands that are important to us on USA are shows like Monk
and Dead Zone.

Whereas with Trio, it's all about the brand. It's a niche network, and over time as we grow that network, we want people to think of Trio as a kind of home where its brand — like the Vanity Fair
brand in magazines — means something and adds something to the program experience.

MCN: So what is Trio's brand?

While USA is about shows, Trio is about an environment. We're programming it in a completely different way to, say USA.

We're programming half a dozen big seasons a year, like the Uncensored
season we did in the summer. We're about to do Brilliant, but Canceled
about shows that were canceled before their time, then we're doing Easy Rider
as an introduction to filmmakers of the 1970s.

You get original programming and then a whole month of show marathons that belong in that premise.

MCN: Operators seem a little unsure about what Trio is. They see the network as a combination of maybe A&E and Bravo.

[Trio] tried to be a bit of an arts channel with a bit of this and that. I think now we have a really good idea of what we want it to be. It's not about high culture, but about popular culture. It's about things that people are interested in and care about.

A&E and Bravo have gone away, as far as popular arts [programming] is concerned. We're the only game in town, which is great. There is nothing like a unique idea in cable.

If you look at what we're doing, we're doing movies, television and music. We're not being snooty about it, but instead we're being intelligent, and we're respecting the intelligence of our audience.

MCN: How do you get from Trio's current 19 million-subscriber count to a more broadly based network?

You get there because you have a great proposition. Cable operators, especially within a time of consolidation, are going to start thinking: Why do we need this network? For small networks like Trio, the answer is going to be: Here's a service that is utterly unique, that is really well-marketed.

The other part of it is paying cash, and we're going to do that. We're going to go out with an offer based on something of value.

MCN: Are you revealing how much you are willing to pay for carriage?

Jackson: No. But the point is, we see Trio as the third big network from Universal Television. In the next two to three years we want to get toward 30 [million subscribers] and beyond.

MCN: A couple of years ago there was talk about the group launching another service, like a crime channel. Is that still on the table?

No, we killed off Crime. Court TV became the crime channel. But we will develop new channels over time. The company as it is presently constituted can't afford that. But we hope as it reconstitutes and reorganizes, there will be opportunities to do that.

But today's job in terms of development is getting Trio out there.

MCN: You've talked about USA as being a general-entertainment service and Trio as a niche service. How do you define Sci Fi Channel and what are the prospects for its future?

I think the folks at Sci Fi have done a great job of branding the network. It's a great identity, it's clear about what it is and we don't want to lose the relationship with that base.

But over time, we want to invite other people into the fold. Taken, produced by Steven Spielberg with $35 million of cash, is part of that. Making a series based on the Tremors
movies is part of that. We also have some great reality [programming] next year, such as Scare Tactics
and The Dream Team.

Dead Zone,
Tremors and Monk are all original scripted shows that are somewhat costly. A lot of networks have abandoned the scripted series genre because of the cost and the high failure of these shows. Why is Universal Television so aggressive in pursuing scripted series?

It is costly, but look at the price of buying a movie. Look at the price of an off-network strip that might cost you $1.6 million an hour. Look at the price of sports rights. It's all costly.

But there's nothing more costly than becoming irrelevant because you're just showing commoditized stuff. That's really costly. We're about creating that kind of library value. We want to drive an audience both today and tomorrow.

MCN: Are we going to see an increase in programming budgets for both networks?

Yes. Next year we're investing around $150 million more in USA alone. I think there's huge opportunity in particular for USA to grow and become a competitor with certainly [broadcast networks] UPN, and The WB.

We're starting on a journey expansion and growth and making these networks even more valuable.

MCN: Will the success of USA and Sci Fi translate into higher licensing fees to operators?

I think that initially it translates into working to change a big issue for cable, which is the acutely false gap between broadcast CPMs [costs per thousands] and cable CPMs. Over time, we intend to remove that gap. We are going to mount a case through strong creativity and a very effective sales effort that our product is valuable. That's about collaborating with advertisers and working together with them to maximize what we have.

MCN: So any revenue increases are going to be on the advertising side, not necessarily on the cable operator end of it?

We aim to get the market price for what we produce.

R. Thomas Umstead serves as senior content producer, programming for Multichannel News, Broadcasting + Cable and Next TV. During his more than 30-year career as a print and online journalist, Umstead has written articles on a variety of subjects ranging from TV technology, marketing and sports production to content distribution and development. He has provided expert commentary on television issues and trends for such TV, print, radio and streaming outlets as Fox News, CNBC, the Today show, USA Today, The New York Times and National Public Radio. Umstead has also filmed, produced and edited more than 100 original video interviews, profiles and news reports featuring key cable television executives as well as entertainers and celebrity personalities.