Back in 1987, the broadcast industry sneered when media baron Rupert Murdoch announced the launch of a fourth network. He would start, he said, with two hours of Sunday prime time against the full slates of ABC, CBS and NBC, no affiliate stations, no news division and practically no production base.
No one is sneering now. The words ”fledgling” and ”upstart” have disappeared from the lexicons of TV reporters who write about Fox. It`s FBC now: the fourth network.
Fox emerged from the 1991-92 season with an audience growth rate for its first five years in excess of 130 percent. In the same period, ABC, CBS and NBC audiences continued to erode, to a combined total of 62 percent of American households, compared with 76 percent five years ago.
Fox`s end-of-season rating of 8, with only five nights of programming against seven for the competition, was up 25 percent from the previous year`s mark of 6.4. Season winner CBS was up 12 percent, to a 13.8 rating from 12.3, and ABC and NBC were fractionally down. (Each A.C. Nielsen Co. rating point represents 920,000 households.)
Fox also emerged as virtually sole owner of the audience of children and teens, tied ABC for the audience of men 18 to 34, and made heavy inroads into the demographic group of adults 18 to 49, most valued by advertisers.
Most important, by avoiding exploding production costs and stratospheric sports licensing fees, Fox was operating at a profit while the competition was swimming in red ink. Last week, Fox announced 11 new series, premiering as early as July and August, which will expand its prime-time programming to seven nights during the 1992-93 season.
In addition to Fox`s seven owned-and-operated stations (including WFLD-Ch. 32), the network has expanded its affiliates to a respectable 140
(compared with ABC`s 230, NBC`s 218 and CBS` 215). Murdoch, president and chief executive officer of Fox Inc. and of its international parent company, News Corp., is happy, but he isn`t satisfied.
Like Johnny Rocco in the movie ”Key Largo,” he wants more. Unlike Rocco, he is likely to get it.
”We want to grow a lot faster,” Murdoch said in a telephone interview from his Los Angeles headquarters, where he recently took over day-to-day network operations after the departure of his right-hand man, Barry Diller.
”We`ve got a long way to go.”
Murdoch also plans to get into the network news business, but not in the pattern followed for years by his competitors. Highly paid, high-profile
”evening star” anchors, he said, are ”going out of fashion.”
”We have to make all our own stations much better in news,” he said.
”We have to help them with news feeds, material they can edit locally and fit into what their own communities need. We`ll be apt to go for a cable news service in addition to FBC, but that`s in a more distant future.”
To launch his nascent news division, Murdoch named longtime employee Stephen Chao news president and, as usual, raised the eyebrows of media critics. They growled that Chao, who formerly worked for the National Enquirer, and who created such tabloid-style Fox shows as ”Studs” and
”Cops,” would taint FBC News with the outrageous journalism long practiced by Murdoch`s London tabloids.
But ”The Last Godfather: The John Gotti Story,” the first Fox news documentary to bear Chao`s stamp, was a hard news report, devoid of dramatic re-creations and other gimmicks. When it aired May 9, it beat ABC in its time period and scored first among men 18 to 34.
Though Fox`s news operation is not yet in full swing among affiliates, only a few of which have their own news divisions, Chao has been flexing Fox muscle with live reports ranging from exploding sewer pipes in Mexico to coverage of the Los Angeles riots.
Published reports indicate that the establishment of a news service rather than a national news program, allowing local stations to highlight their own anchors, will cost about $20 million over the next several years, in addition to the $40 million Fox already spends annually on news at the station level.
To pay for this, the entertainment slate must grow, both in volume and in profitability from advertising revenue-which Murdoch said already is under way.
”I think as we have more hours (in prime time), we`ll broaden our appeal,” he said. ”At the moment, we have certainly a very strong position. We have signature programs that have very strong appeal.”
The ”signatures” have been written in boldface across the A.C. Nielsen Co. ratings sheets: ”Beverly Hills, 90210,” ”The Simpsons,” ”In Living Color,” ”Married . . . With Children.” But can Fox hang on to the youthful viewers of such fare as they grow older?
Bill Croasdale, president of national broadcast for the Los Angeles ad agency Western International Media, said it won`t have to.
”They`ve had phenomenal growth, and they are still the leading edge network in terms of reaching the youth of America,” he said. ”They`ll lose some of them as they age, but their shows will tend to gentrify too. The longer a show stays on the air, the older the audience becomes because the hard-core viewers stay with it.
”But Fox will always stay on the leading edge and continue to go after the young demographic, so as their shows start to gentrify, you`ll see them start to disappear.”
Fox President Jamie Kellner said that is the essence of his network`s long-term strategy.
”If you look at the Fox children`s network, which this year (at 19 hours a week) is going to have more (children viewers) than any other entity in television, you could say, in effect, that we are growing these kids up on Fox,” he said. ”We have kids, we have teens, and we slowly age them up into the 18-to-34 and 18-to-49 demographic. We have a better long-term strategy than any of the existing broadcasters to sustain our growth.”
Kellner said another key Fox strategy will be to ”just say no” to series stars and producers who, in the flush of ratings success, demand more and more money for their efforts.
At NBC, Ted Danson, star of ”Cheers,” sought and won a hefty salary increase, driving the cost of producing the series to $1.6 million per episode-up, Croasdale said, from roughly $350,000 at its inception. Danson would get a polite turndown at Fox.
”There is no point in operating a network if it can`t be operated on a profitable basis,” Kellner said. ”Fox has made a profit for the last three years. The fact that CBS and NBC this year are not going to make a profit in some ways can be attributed to the idea that you have to make the deal. You have to pay the price.
”That`s a mistake,” he said. ”You have to be willing to say: `Hey, I just can`t afford to do that. I`m sorry, it`s been great and we thank you for your service.` ”
Kellner said that even the recession, which has hit all media, has not severely hobbled Fox, which has signed affiliates in every fiscal quarter. He predicted that the Fox news service, which Murdoch said eventually may become a global enterprise, will be available through Fox affiliates to 70 percent of all U.S. households within two years.
Only one stumbling block remains for Fox: the Federal Communications Commission rule defining a full network as an entity programming in excess of 15 prime-time hours a week and barring it from having any financial interest in first-run syndication of the fare it produces. To exceed 15 hours-and the move to seven nights a week planned for the 1992-93 season would push Fox over the limit-would cost Fox its lucrative syndication arm under the rule.
Kellner said that if the rule is still in effect at the end of the six-month grace period the FCC allows to adjust a schedule that exceeds 15 hours a week, Fox will cut its programming.
But Murdoch is confident the syndication rule will be eliminated, either by the FCC or Congress. ”It will go,” he said. ”It`s just a question of whether it goes in a year`s time or five years or eight years. It`s something out of the Dark Ages and it won`t last.”
Because of the pressure within the TV industry to overturn the rule, Fox`s move to take advantage of the six-month grace period seems a shrewd one.
