May 25, 1981 issue

"Videotech" Section

PolyGram Eyes Computer for TV Program Inventory
By BOB MARICH

LOS ANGELES - Is the TV syndication business ready for licensing programs by way of computerized "title avails"? Do TV stations want to buy one program title at a time, each with an individually negotiated license period? PolyGram Television president, Norman Horowitz, believes program sellers and buyers will embrace computerized program sales as a cost-cutting, inventory-maximizing tool before too long. Mr. Horowitz was gearing up for computerized program inventory when he headed Columbia Pictures Television Distributing and even considered distributing off-network "Barney Miller" episodes to TV stations on optical videodiscs, rather than videotape.

Mr. Horowitz was named in October to head newly formed PolyGram Television, a partnership of Netherlands' N. V. Philips and West Germany's Seimens A.G., two electronic conglomerates. In an interview at PolyGram TV's West Los Angeles offices, Mr. Horowitz predicted new video media will try to dominate program distribution as the networks once did, until the government stepped in, and that a rude awakening is in store for those just entering program distribution/production, such as ad agencies.

In an unconventional trade advertising campaign, PolyGram TV has positioned itself to program producers (in efforts to acquire syndication rights to their programs) as a distributor that can be trusted to give them a fair shake, playing on the creative community's distrust of major distributors' accounting.

"It's not attacking the studios," Mr. Horowitz said. "It's attacking the anachronism of the way they distribute" because major studios have to support large overhead. "You know, somebody's got to pay for that branch office in Chicago."

Fair accounting and flexibility to sell programs on a custom basis - with computer-armed salesmen in the future - are some of the threads that tie PolyGram Television together in Mr. Horowitz' mind. Computer inventory would provide seller and buyer with a film's synopsis, track record on TV, availability and a price quote - all to maximize sales to the benefit of software creators holding royalties.

"When you have large audience fragmentation in the future, why should a station warehouse a particular picture?" Mr. Horowitz asked. In syndication today, each title in multi-title film packages don't always get maximum utilization.

"And when there are 40 competitors in the future, you can't afford to buy films just to keep them from competitors," he continued. "With pay TV and tiered services, there is no reason why a particular service can't carry a picture on a Monday and then another service use it on the following Thursday."

"Exclusivity is going to be a major issue in the future," Mr. Horowitz said.

* Is PolyGram Television practicing what it preaches by putting its syndication films on computer? "Oh yes," Mr. Horowitz said with a grin, "all seven pictures."

Since October, PolyGram TV has grown to 13 execs - many following Mr. Horowitz from Columbia. In September, PolyGram TV will move into a new office building on the MGM Studios lot in Culver City, where it will share offices with PolyGram Pictures.

Run separately, PolyGram Pictures (whose works are currently distributed by MCA's Universal Pictures) will syndicate its films through PolyGram TV, Mr. Horowitz said.

PolyGram TV is building an inventory by acquiring syndication rights to TV movies (and is looking for series as well), believing its low operating overhead enables it to cut competitive deals with producers.

Mr. Horowitz is steering clear of providing upfront development money "because ultimately, you get killed," he said. "Two out of three won't happen, then you've got to get that lost $50,000 from the next guy."

* Mr. Horowitz spent most of his career in two large distribution organizations, working at Columbia from 1959 to 1980 interrupted only by a two-year stint with CBS program distribution, when networks were allowed to operate syndication divisions.

Under Mr. Horowitz, Columbia considered giving TV stations a free industrial optical videodisc player if they'd accept syndicated "Barney Miller" episodes on videodiscs, in an economy move to avoid videotape distribution. That idea never reached fruition, like the more controversial proposal of syndicating "Barney Miller" in each market twice, offering exclusive rights only in 12-hour day-parts. This would break from tradition where one station in a market holds exclusivity around the clock.

Mr. Horowitz said flexibility and a willingness to make "untraditional" deals at PolyGram continues his style from Columbia. He recalled making a foreign distribution pact for MTM Enterprises' "WKRP in Cincinnati," "Paris," "White Shadow" and other MTM TV programs that called for no up-front payments or distribution fee formula, only a straight percentage of sales. The loosely structured accord with MTM exec VP Arthur Price (formerly Mary Tyler Moore's agent) was "for as long as he was happy."

That deal made news in early May when Columbia foreign sales chief Fred Gilson resigned to form his own distribution company, taking with him foreign rights to "WKRP," "Hill Street Blues" and other MTM TV properties. "I guess Arthur decided one day he would be happier someplace else," Mr. Horowitz said.

Contrary to the prevailing view that software producers will reap benefits of the video revolution, Mr. Horowitz predicted new video media such as cable TV networks media such as cable TV networks "want to put you in the position the networks used to" before the Federal Communications Commission forced the three networks out of program ownership in 1972. "It's a business of greedy people - and this is just an observation of the human condition - that have to answer to shareholders and managements."

"Recently, new companies have entered the production/distribution fray, making program financing less difficult, but still requiring "network exposure to make something valuable and known," Mr. Horowitz said. "But there's no warranty for profitability because this is a high risk business."

Managements impatient for quick profit will scuttle their companies' TV program ventures as the business becomes more crowded, Mr. Horowitz said. Broadcasters and ad agencies overextending their localized broadcast business experience were mentioned.

Aside from newcomer shakeout, Mr. Horowitz believes "almost the entire TV business has floated on unexpectedly high receipts from previously produced material. I think there will be fewer 'Laverne & Shirley' and 'Barney Miller' successes in the future, and a lot more cases of a guy with six episodes of this one or one year's worth of that."

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