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Product Name: Entertainment & Syndication
Product Description
Hearst Entertainment and Syndication, an operating group of The Hearst Corporation, includes the company's cable network partnerships, television programming activities, and newspapers syndication and merchandise licensing operations.
“We have become more adept at changing our programming strategies to keep up with viewer tastes. Advertisers gained a greater appreciation of the bond we have with viewers.” –Bruce Paisner, Executive Vice President, Hearst Entertainment & Syndication
In the current landscape, each of 31 cable networks now reaches more than 85 million U.S. households. Another few networks should hit that benchmark in the next few years. But after that, predicted Paisner, the window of opportunity for a new network to reach 80 million households is going to close. For good.
“There is only so much room,” he said. “There is only so much time a consumer can spend watching TV. There are only so many choices he or she will make. So companies that have the scale now are the ones that are going to be the future of cable.”
Hearst, he quickly pointed out, is a member of that very select—and valuable—club. The company is invested in five of the networks, which reach more than 85 million households: ESPN, ESPN2, Lifetime, A&E and The History Channel.
“Our brands are the key,” Paisner said. “Consumers know our networks. They are attached to them. And the attachment runs deep. Just try telling someone you are going to take away their ESPN or their Lifetime movies.”
While these network brands create an invaluable advantage, they are still part of a growing, swirling mix of new technologies and consumer demand. “You can break up cable by eras,” he said. “The ’60s were about infrastructure; the ’70s and ’80s, deregulation; the ’90s, the explosive growth of programming and networks. Now it’s about the payoff of digital technology. Consolidation has created more reach by the most powerful companies. Broadband is now a mass market. Interactivity is a consumer expectation. The product menu is expanding. We’re investing and laying the groundwork to be a player in the coming broadband marketplace.”
Paisner said that there were some concerns early in the year over ad softness and consumers defecting to other ways of spending scarce leisure time. But thanks to quality programming, Entertainment & Syndication was up 9 percent in revenue and up 16 percent in profit for the year.
“A number of things came together to turn the year around,” he said. “We have become more adept at changing our programming strategies to keep up with viewer tastes. Look what they did at A&E: Advertisers gained a greater appreciation of the bond we have with viewers. And I think the power of our brands broke through the clutter.”
At the A&E Network, the shift to a more broadly appealing program menu continued with new seasons of “Growing Up Gotti” and “Dog the Bounty Hunter” and the successful launches of “Intervention,” “Inked” and “Criss Angel Mindfreak.” In all of them, audiences responded to characters bigger than life and to the focus on real people, not contrived situations.
Paisner said A&E’s new programming has created buzz, improved ratings and lowered demographics.
For the first time in many years, A&E’s average viewer is now under 50 years old. In addition to its reality series, A&E presented several highly rated original movies, including “Faith of My Fathers,” a dramatization of John McCain’s POW experiences in Vietnam, and “Knights of the South Bronx,” starring Ted Danson as an inspirational inner-city public school teacher. A&E also began to air the popular off-network series “CSI: Miami” and will start airing it Monday through Friday in the fall of 2006. Next up: “The Sopranos.”
The History Channel had big hits in 2005 with high-tech series like “Modern Marvels,” “Deep Sea Detectives” and “Man, Moment and Machine.”
“The History Channel has a simple mission,” Paisner said. “It’s to serve the history enthusiast in all of us. And I think we delivered on that.” Among the highlights: “Rome: Engineering an Empire,” “The Crusades: Crescent & The Cross” and “Da Vinci & The Code He Lived By.” The History Channel also offers outreach programs in museums, libraries, schools and historic sites around the U.S. Internationally, local versions of the channel are now available in more than 75 countries.
The Lifetime network beat expectations in 2005 with a resurgence of its unique Lifetime original movie franchise. “We set out to create a mix of high-profile event movies and popular basic storytelling movies. And it worked. We grew ratings and increased ad revenue,” Paisner said.
Highlights were “Murder in the Hamptons,” starring Poppy Montgomery and David Sutcliffe; “Odd Girl Out,” starring Alexa Vega and Lisa Vidal; “Ambulance Girl,” starring Kathy Bates; and “Dawn Anna,” starring Debra Winger.
One of the network’s programming standouts was “Human Trafficking,” with Mira Sorvino and Donald Sutherland. “It reached a very wide audience,” Paisner said, “and got a lot of praise for shining a light on the brutal realities of the international sex trade.”
Lifetime also completed several important renewals with its cable affiliates, improving subscriber revenue in the process.
The new Lifetime Movie Network reached more than 45 million homes by the end of the year and, in most surveys, was the new network most desired by cable subscribers.
ESPN is not just a network, Paisner explained. It’s a growth industry. ESPN now offers nine TV channels, the largest U.S. sports radio network, the biweekly ESPN magazine, and several online and broadband services. Internationally, it is the world’s largest distributor of sports, with services available in 11 languages and more than 180 countries. ESPN2 started a new programming strategy to add original sports-related drama, starting with “Four Minutes,” a dramatization of Roger Bannister’s breaking of the four-minute- mile barrier. Capping another year of high ratings and brand expansion, long negotiations produced a big win. Beginning in 2006, ESPN will be the home of Monday Night Football.
Outside the U.S., Cosmopolitan TV continued to take hold in the markets where it has been launched. Growth has been especially strong in Spain, where, in the third quarter, the network became the No. 1 cable satellite viewing choice for women 18 to 35. The network also concluded a new long-term affiliation agreement with its satellite carrier, Digital Plus.
Company Details
"In our third century, Hearst is continuing to place traditional media products alongside exciting new technologies in a formula that has consistently proven successful."
—Victor F. Ganzi
Ganzi began his career with Hearst in 1990 as general... more
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