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TBS' Kellner Makes His Presence Known

Atlanta— It's been barely 12 weeks since The WB boss Jamie Kellner was named chairman and CEO of Turner Broadcasting System Inc., yet the veteran broadcast-network programmer has already begun to make his presence known to the cable industry. Kellner is creating programming synergies between The WB and the Turner-owned networks: The WB's Charmed will make its way to Turner Network Television this fall, with more of the broadcast network's skeins expected to follow. He is also bullish about the short- and long-term futures of the existing Turner networks — including the beleaguered Cable News Network franchise — as well as the prospects of creating new channels under the Turner brand, including a potential music service.
Multichannel News programming editor R. Thomas Umstead met recently with Kellner and Turner president of domestic distribution Andy Heller to talk programming. An edited transcript follows:

MCN: While your background is mostly on the broadcast side, you have had experience dealing with cable operators in the 1990s through Foxnet and later, by securing distribution for The WB within its so-called broadcast white areas. Now that you're coming back to cable, have you seen any noticeable difference?

Jamie Kellner:
I think one of the differences is there's a lot more talk about new technology coming into the business. I think a lot of the future of the business is about things that go beyond programming, which is my background.

So I'm hoping that there's still room for people that want to try to make the shows better, get the ratings higher, offer the viewers something more interesting to watch. All the attention, though, is going to be on high-speed modems and digital set-top boxes and things like that.

MCN: Recently, there was an announcement from Turner and The WB that the broadcast network's series Charmed would have an early run on TNT. Can you provide more specifics? Is it the first of many deals?

Kellner:Charmed
is going to be on TNT as part of our drama strategy. Obviously, it's a young female-skewing show and it will be exciting for them, but we have not yet formalized the plans for a second airing. The rights have been acquired by TNT, though, and in all likelihood you'll see it this fall, probably at 10 p.m.

It's not the first of many; it's the first of some. There's a limit, I think, to how much repurposing we should do. It's not new; USA has done it. But we do have a couple of advantages. One is that now our structure is such that it's all under one place, so we can make a decision by getting our senior staff together and saying, 'This is a good idea.'

MCN: Can you talk about some of the other shows that might find their way to Turner?

Kellner:
Yes, Gilmore Girls
has been mentioned, as has Smallville. My guess is we'll do one other show besides Charmed. And again, Charmed
is not locked. We have the rights to do it, but it's not locked.

MCN: Are The WB's affiliates agreeable to the repurposing of their shows?

Kellner:
Yes, but no one ever jumps up and down and is happy when you say you're going to take programming and change the way you exhibit it. But I think that our affiliates do understand that it's in our interest to have Charmed
renewed on the network in primetime on The WB for a number of years.

Being able to do both of these deals — the back-end strip deal and the TNT 10 o'clock play — is what enabled us to get the deal from Paramount [Pictures Corp.] and Spelling Television for the extension of The WB's primetime rights. So I think the affiliates look at it as a good deal for them as well as for us.

MCN: From the cable side, how important are these repurposing arrangements?

Kellner:
I would bet almost anything you're going to see dramatic increases in the time period. I'm sure that cable operators are interested in satisfying the viewers, so I think eventually the cable operators will also be very excited about the strategy.

MCN: Are we going to see any TNT programming on The WB?

Kellner:
I kind of doubt it. I guess maybe original movies, but I think the original programming on TNT will remain fairly on TNT. [TNT's original movie "Witchblade" recently aired on The WB.]

MCN: Do you foresee a time when your repurposing strategy will lead to a higher increase in licensing fees for TNT?

Kellner:
More value translates to higher prices. I think that we're going to create the value, and, once we do that, I think Andy will expect to be able to get a higher rate.

Andy Heller:
I think the issue is less about whether we're doing this as a strategy to raise rates, than it is about making sure that we continue to have compelling, strong programming on the network that creates value for the affiliates and the for the network itself. The rates will come as they always have because we deliver quality programming. It's not part of a rate-increase strategy.

MCN: When you accepted the Turner position, what were some of the positives and negatives that you saw?

Kellner:
I think that you could have hired almost anybody to run TBS [Superstation] and TNT and within a year or two, they would look like a hero. Because they bought such wonderful programming, I think that within the next couple of years those networks are going to be off the chart.

When you put Friends
and Seinfeld
and Home Improvement
and Everybody Loves Raymond
in a block on TBS, you're going to have something that is hard to match on any broadcast or cable channel.

TNT has done the exact same thing on the drama side. I believe the programming that we have purchased into the future — and that was done well before I got here — is top-notch, and it's going to make us shine. So I think that those two networks are in great shape.

CNN is still the [news] leader, but we lost some of the lead. We're the leader in quality. We're a leader whenever there's a major breaking-news story and we've got loads of attributes on that side. But we've lost some of that gap that we had between us and the competition, and that's what we're going to look to restore.

MCN: Some people say CNN is trying to follow Fox News Channel's successful strategy of creating shows like
The O'Reilly Factor or Special Report with Brit Hume that emphasize personalities over straight news, which was CNN's original mission. How do you respond to that?

Kellner:
That's a joke, suggesting that we're trying to emulate the competition. I think what you have to look at are the assets that we have. One is Headline News. Headline News is a newsreel that reports up to the minute on what's going on, so we're covered whether its every 15 minutes or half-hour or whatever. So we shouldn't be kicking ourselves.

The talk shows we have are working. The personalities on shows like Crossfire
are working as well. I think you will see more of those on CNN than you've seen in the past years. You'll probably see more hour-long shows on CNN; they work better than the half-hour shows. But again, CNN's No. 1, so you make changes slowly and carefully and try not to disrupt the viewership.

MCN: I raise the question because CNN has suffered a severe ratings decline, while its competitors' performance has improved significantly. There's also been controversy over Headline News' hiring of actress Andrea Thompson.

Kellner:
I'll bet you not one person that has criticized Andrea Thompson's hiring has seen her work. I did not make that decision. My colleagues at CNN made the decision after going through hundreds, if not thousands of casting tapes and selecting who they felt were people who could be premiere talents on Headline News. I think they made the right decision and we're sticking by it.

MCN: What do you hear from operators about CNN? Are they still positive about the service despite the layoffs and the on-air changes?

Heller:
We're still getting a very positive response from the entire cable industry about CNN. The answer is that CNN still delivers for them in terms of reputation and integrity. I think they like the fact that we're evaluating it and trying to make it better and allowing it to maintain its position in the industry.

MCN: What are your plans for CNNfn [to be repositioned later this year as CNN Money]? There have been questions about whether, in order to increase distribution, you may pay operators for carriage.

Kellner:
We are evaluating all different kinds of scenarios. We definitely want to get it out to a full distribution and we have a lot of good ideas. It's going to cover the personal- finance sector, which is not being covered very well but where there's a growing interest. Money
magazine has just done a fantastic job of creating something that people are very interested in and using regularly, so we basically feel it provides a real service to the cable industry. And it's going to happen. It's just a question of how quickly we can get it distributed.

MCN: How many homes do you want to be in by the end of the year?

Heller:
I think at the moment what we're focusing on is integrating the personal-finance component into the programming. I really don't want to speculate on what the distribution will look like because I think that the changes aren't likely to come until the end of the year.

MCN: Do you have any specific plans for new networks?

Kellner:
We really haven't had a lot of time to focus on other space that we think might be open. That is more likely to be something that we'll be doing after the first of next year. The first challenge that we face is generally with our existing networks. We're working very hard on Headline News, creatively. I can tell you that I'm thrilled with where Headline News is going.

We've got a bunch of issues that we're dealing with on The WB and getting that scheduled right for the upfront market, so that's our next priority. We've got CNNfn facing us within the next three, four, five months and we'll be getting heavily involved in that.

MCN: Is launching a new music channel on the agenda?

Kellner:
Yes. That's one of the things that I personally would enjoy doing. And I think that there is a place for it. But again, that's not on the front burner right now.

MCN: There are also discussions about AOL Time Warner Inc. investing in New Urban Entertainment TV in an effort to tap the urban market. Is that service a major play for Turner?

Heller:
I think we're close. I don't think the investment part is closed yet, but investment bankers are lined up. It's a network that already exists out there, it's getting distribution and it has a management team in place.

I think that, again, we are unbelievably well positioned to court a network like NUE. We have Home Box Office programming and a lot of programs that we have here in [Turner's] library that would fit. I think that the urban market is underserved, and I believe that there is room for another player in that genre.

MCN: Turner Sports' National Basketball Association package is up for renewal after next season. NBA ratings for TNT and TBS have declined over the past two years. Will you aggressively pursue a renewal of the deal, as well as other high-profile sports packages?

Kellner:
I think we will be aggressive in pursuing all sports rights in the future. But if it goes beyond our ability to afford it, then we won't.

I think it's great to have diversity of programs on the networks. We made the investment in NASCAR [National Association for Stock Car Racing], the NBA, Wimbledon [tennis] and other sports. We look at everything that comes through here as a major investment, and I do think having some sports is a good idea for our networks.

But I do think that in the cable industry there's an imbalance in terms of the importance of the audience for sports. I think whenever you have men running a business or an industry, you tend to have an imbalance. If 80 percent of the executives in the business were women, you wouldn't have gotten that rate increase for ESPN. We just like sports, so we overpay for them.

MCN: What are your plans for CNN/Sports Illustrated? I know it's offering some live programming, but it remains mostly a sports news service.

Kellner:
I think we're still feeling it out. We think it's getting better and we are working on it, but it's not as far forward as CNNfn. There are only so many projects you can pour yourself into at one time.

Heller:
We're going to constantly look at the programming mix and try to find a way to make sure that we are delivering. We were happy to be able to partner with the cable industry and deliver a big bulk of the WUSA [women's soccer] games. We're excited about the Wimbledon product that we have on the network. We're going to keep trying to make that compelling product, both for the cable operator and for the consumer.

MCN: You talked a bit about TNT's repositioning to a more drama-based programming service. What's behind the change there?

Kellner:
If you look at what people watch on television, there's only a couple of categories that, if you can own from a marketing standpoint, you put yourself in a great position. The drama category has been left open — we have a bunch of guys in the news space, a bunch of guys in the sports space and in comedy.

But I think it's fair to say when you think big, dramatic movies, and you think about our great movie library that's the best in the industry, we are positioned well. The current titles that are coming online every month are bigger than anybody else's titles, and series such as Law & Order
and ER
are some of the best on television.

So I think it's really clever marketing, and I think the viewers are starting to associate drama with TNT better than with anybody else.

MCN: Will we see similar alliances and program sharing between Cartoon Network and The WB that we've seen with Nickelodeon and CBS?

Kellner:
The difference between the two is that CBS was dead in the water with their kids' programming and they got their heart beating with Nick Jr.

What you have with our situation is the No. 1 broadcast kids' network and, with a bullet, the fastest-growing, hottest cable kids' network. These two together are really a powerful one-two punch.

We've got two great properties and they'll remain distinct. But they'll be cousins coming from the same family, and if we get the audience to see that, both networks will succeed.

MCN: Are you satisfied with the pace of the operators' launch of digital boxes at this point?

Kellner:
I'm a newcomer. I won't voice dissatisfaction with anybody in the industry at this point.

Heller:
I don't think it's so much a question of satisfaction or dissatisfaction. I think as an industry, we probably all hoped that digital would have taken off faster than it did and that the penetration would be higher. But I do think it ties into the question about the importance of programming as you move forward. Content will always be king, because the cable operator still has to sell product to the consumer.

MCN: Is Turner planning any interactive ventures in the near future?

Kellner:
I think that interactivity and enhanced TV are drivers for the digital platform. I think it's a challenge with the entire industry to figure out an economic model that is going to make that work. And I think that we, again, are perhaps better positioned than anybody, with all of the products we have in-house that can be repurposed.

And when I say repurposed, I don't mean replaced. We have thousands of hours of news footage that has never seen the light of day on CNN. We have tons and tons of library programming that can be repurposed and reused to create enhancements.

I think it's going to be a big part of our future. But one of the real challenges for us as an industry is to figure out a new economic model, in how you create this stuff and how you sell it to the consumer.

MCN: Have you done any VOD testing?

Heller:
Well, we've done some tests with Diva [Systems Corp.], and we've done some tests with In Demand. I think that as the industry's appetite for this increases, and the boxes roll and the technology begins to work, we'll look to see which of our products make sense to put into those platforms.

MCN: The WB's programming philosophy over the years has been to skew its programming to a younger audience than the other broadcast networks. Will you bring the same strategy to the Turner networks?

Kellner:
The median for TBS is 39 now. The median age of TNT is 40. When you look at CBS, it's in the mid-50s, ABC is at 47 or 48 and NBC is at 46. It's not until you get to Fox that you get to 36 or 37, and The WB is 28 or 29.

So TBS and TNT are really younger-skewing networks compared with NBC, ABC and CBS. We've been telling advertisers about the importance of reaching younger adults.

Now by adding Friends
next year and these theatrical movies which skew young, we're really providing something that is distinctive. It's important in the menu of offerings on cable, the majority of which skew older.

We're now in this differentiated place from most of our competitors and certainly if you're a cable operator, you want to make sure those 35- and 40-year-olds are subscribing, too, not just the 60- and 70-year-olds.

MCN: Have there been any surprises in your first 10 weeks at Turner?

Kellner:
No. I think this is a well-run company. I think everybody here acknowledges that CNN at one point had no competition and now it has good, strong competitors. It is our job to take our game up a notch and be very creative about it. CNN is very important to me personally. It was something I relied upon. I watched election coverage. I went to CNN when there was a big news story. I'd go to CNN first because I knew they were on the stories all the time, and then we started to get involved with what it does.

We had three journalists in Kosovo attacked recently. I wish we had the exact line but I think someone in the State Department said of the network that the cameras at CNN are the first line of defense in human rights in this world today. And what it meant was that when you go to Kosovo and people are doing terrible things, or when you go into some of these revolutions in Africa, civilians are being massacred and things. The cameras of CNN are what carry that message out across the world and get the rest of the world angry enough or … build up enough guilt that they have to do something.

It's a very weighty, important institution for this world to have. It's done so many things, and it's changed so many things, that when you get involved in it, you begin to feel its importance more than if you just are a casual viewer.

I met a reporter who was describing [his experiences]. First, he shows me the hole in his flak jacket, having been shot at, and he's describing how the camera crew learns how to walk, in effect, with their front toward snipers or places where there are suspected snipers because the bulletproof jackets have holes in the sides. So they have to learn how to hop across sideways when they're running from one area of cover to another.

As a human being, you sit there and you go, 'Are they crazy? All of this, to get pictures of what's happening to send out to the world.' And they're remarkable people on remarkable missions, and I'm honored to play a role in what they do.