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Guide Braces for New Life

Jun 19, 2006  •  Post A Comment

Ryan O’Hara is the only network president who competes with a scroll.

When the TV Guide Channel executive launches new shows, he must deliver ratings increases compared with the network’s unique prior format-an old-fashioned scrolling programming guide.

If that sounds easy, the execution is more complicated. As households migrate from analog to digital set-top boxes, the scroll is becoming obsolete. TVGC viewers have to be educated that the informational channel features entertainment programming.

In addition, that new programming has to offer a tight, uncomplicated im-age, fitting in the upper two-thirds of the screen, as the scroll continues on the lower part of the screen on all television delivery systems except DirecTV.

Mr. O’Hara’s next shot at entertainment programming is a hidden-camera series that represents a departure from the news-and-chat genre that has dominated the channel’s entertainment efforts to this point.

In “Trapped in TV Guide,” unsuspecting marks find themselves in situations based on classic scenes from popular TV series (for example, male beach house rental applicants are told they can have an apartment if they dress as women, a la “Bosom Buddies”).

The one-hour series is hosted by Tracey Gold (“Growing Pains”) and debuts Aug. 4.

“We fell in love with the pilot. There hasn’t been a `Candid Camera’-like show that covers current and past television shows,” Mr. O’Hara said.

TVGC programming appears full screen for some viewers, but it is split with the scroll for others, so Mr. O’Hara and his team must operate as part information grid, part entertainment network.

Still, the network’s business model affords a wide profit margin and has plenty of room for ratings growth. Despite ramping up its programming efforts in the last year and a half, TVGC still has minuscule programming requirements. At the same time, it offers a plethora of advertising sales opportunities in the form of banner ads above the scroll.

In 2004, TVGC hired red carpet mavens Joan and Melissa Rivers (as well as a few executives) away from E! and put about 22 projects in the creative pipeline to help stem the inevitable decline in ratings as viewers and systems continued to upgrade to digital.

For 2006, the channel’s programming budget has been increased 25 percent to $33 million.

TV Guide’s Hollywood headquarters is located on a prime piece of shopping center real estate adjacent to the famed Grauman’s Chinese Theater. During a tour of the studio earlier this month, Mr. O’Hara said the location offers major advantages.

“The heart of Hollywood is a great strategic asset, even for simple things like getting stars as guests for shows,” he said.

Mr. O’Hara pointed out new cameras, shiny editing bays and computers throughout the facility as demonstrations of parent company Gemstar-TV Guide’s commitment to TVGC’s evolution.

“A good job in the past 18 months was being a vendor to TVGC,” he said.

About 18 months ago Gemstar’s management and board of directors decided to morph TVGC from purely a listing service into an entertainment network. The channel was profitable before the switch and has continued to be, according to Kagan Research.

“Their ratings have been flat, but CPMs have grown pretty dramatically over the past few years, so I think that’s a sign advertisers are more comfortable with the new model,” said Kagan analyst Derek Baine.

TVGC’s cash flow margin is much wider than industry benchmarks, though Kagan expects the margin to tighten as the network spends more revenue on original programming.

“The channel is really a cash cow,” Mr. Baine said.

Much of TVGC’s early post-rebranding press centered on the channel’s competition with E! Mr. O’Hara said the rivalry has since calmed down.

“We’re really focused on the world of television,” Mr. O’Hara said. “E! is thinking much more broadly, acquiring `Simple Life’ and looking into scripted.”

The E! relationship has also been soothed somewhat by TVGC’s covering E! programming and talent-which marks another unique aspect about the network. Because it covers TV, the channel covers other channels, which puts TVGC in a more symbiotic relationship with potential competitors. “We’re seen as agnostic,” Mr. O’Hara said. “We’re not seen as competitive or as someone to avoid. We’re just good fans who like the world of television.”