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"ER" changed the financial relationship between the studios and networks

Milestones, millions, and the next 'ER'

Web posted on:
Thursday, December 10, 1998 5:21:16 PM EST

From Reporter Jill Brooke

NEW YORK (CNN) -- With so few genuine hits on the airwaves, and so many new programs arriving on new networks, a show that achieves the distinction of airing its 100th episode is a certifiable success. Some of these programs, these entertainment "home runs," do more than captivate and amuse their audiences. Some actually change the television industry.

"Roseanne" brought viewers a blue collar grittiness. "Seinfeld" ushered in the era of the single urban dweller, and "Cosby" (the first one) almost singlehandedly rejuvenated the sitcom format. And now "ER," NBC's Thursday night mega-hit, has achieved the 100-episode mark -- and established a new benchmark for cost in the process.

In fact, many say that "ER" will be remembered more for how it changed the financial relationship between the studios and networks than for any episode or awards for excellence. After the show presented a mega-bill to match its status as a ratings leader -- the price went from $2 million to $13 million per episode -- change became inevitable.

Faced with dwindling viewership, diminished profits and increased competition from cable and satellite services, network bosses decided to stop being renters and start building equity in their programming.

NBC wants to become a partner in the production of "ER" to be able to share in the profits from marketing and promotion

New goal: Part ownership

Their new home improvement plan is to get long licensing contracts and become part owners of the shows they air. This will allow the networks to share in such perks as merchandising and syndication profits.

According to CBS Entertainment Chief Les Moonves, there are other advantages. "Creatively you are more in control and you can make sure that ... people listen to you and at the same time if a show becomes a home run, you own a piece of it," he says.

On the other side of the argument, studio executives are concerned that increased network involvement, some say meddling, in the creative product could lead to a decline in the quality of shows produced through such arrangements.

Jon Feltheimer, president of Columbia-TriStar Television, says, "It's frustrating. We consider ourselves pretty flexible deal makers in terms of trying to figure out a creative arrangement between the network and ourselves in terms of co-ownership of programming."

The problems, according to Feltheimer, occur when the network has too much control. "I think if there's too much vertical integration, too much power all in one place, it seems to me that the diversity of choice that's being created for the public is going to suffer, it has to suffer."

Increased network competition means a better choice for studios

Strong trump card

But the studios have a powerful trump card to counter such possibilities. If a network's demands become more than the studio can accept, it can simply do business elsewhere. Gone are the days of the all-powerful 'big three.' With up-and-coming networks like UPN, the WB and, of course, Fox entering the market, and more cable channels seemingly springing to life overnight, studios have an ever-increasing pool of potential buyers for their products.

Back at the networks, the struggle for increased involvement in production has lead to a growing investment in new shows, particularly "reality" programming, such as "Alien Autopsy" or "Cops," which they can own and produce. As Don Ohlmeyer, NBC's West Coast president sees it, "The audience seems to want it and it also forces you not to make bad deals."

But all is not gloom and doom in the battle between the network heavies and the studios. Some industry observers feel the fight will eventually reach a mutually beneficial resolution, with viewers coming out the big winners. "They will still do business with each other," says TV Guide's Jack Curry. "What's going to happen is that the viewer will have more to choose from and the viewer doesn't really care if a program is on NBC, UPN or on cable ... as long as it pleases them."

Which is a good reason to celebrate a 100th episode -- it takes a lot of happy viewers to carry a show that far these days.

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