Networks Applaud Decision To Let Them Sell Reruns

TV'S LUCRATIVE SIDE

BOTH the creative and financial sides of Hollywood are trying to calculate the effects of a decision last week by a federal judge that allows networks to own, produce, and syndicate the reruns of their prime-time television shows.

Will television viewers be offered more hit series, such as ``All in the Family,'' ``Maude,'' and ``The Cosby Show?'' Or will they be watching lesser-quality shows, such as ``Snoops,'' ``City,'' or ``Grand'' - three recent TV sitcoms that were canceled early because of low ratings?

Since 1973, the networks have been prevented from entering the lucrative television program production and distribution business, or to profit from the selling of reruns to local TV stations.

At that time, ABC, CBS, and NBC commanded 90 percent of the nightly TV-viewing audience. Rules imposed by the Federal Communications Commission (FCC) were designed to foster independent production to ensure diverse programming on the airwaves, which are regarded as public property.

By allowing the greatest possible access to airwaves from the largest number of sources, the FCC believed it was acting in the public interest.

But since the network audience has dwindled in recent years, now attracting less than 65 percent of the TV audience, networks have been arguing that the economic landscape of the industry has changed enough that such rules should be lifted.

On Nov. 8, United States District Judge Manuel Real lifted the antitrust consent decrees that had prevented the three major networks from owning stakes in the programs they aired, and making money off reruns.

``The fragmented viewing environment has really threatened the network's existence,'' says Brian Stonehill, a media analyst at Pomona College in Claremont, Calif. He points out that network ratings have dropped steadily in recent years, as have the quality of shows. Rapidly converging cable and telephone industries are also creating new frameworks for fiber-optic transmissions offering up to 500 channels.

``The judge bought the argument that it was time for the networks to be allowed to catch up,'' Mr. Stonehill adds. ``The basic motive was to keep the environment competitive.''

How competitive and with what consequence is the subject of wide debate. Major Hollywood studios such as Warner Bros., Paramount, and MCA object to the ruling, saying it invades their turf, depriving them of potential income in the $5-billion syndication market. Smaller, independent producers say the jury is still out, depending on how networks utilize their new power.

``It's a whole new world,'' says Bonny Dore, owner of Bonny Dore Productions, which produced ``The Jill Ireland Story,'' for NBC last year and ``Captive'' for ABC. ``We will be rethinking our whole personal and corporate future, [deciding] how to create programming, how to finance it, and under what auspices.''

Ms. Dore describes the new environment as one in which smaller companies will need to align themselves with larger entities to survive financially. She sees a possibility of less individualized product and more homogenization.

She says there is one benefit, however: ``It's possible that since we could be worrying less about deficit financing, we can produce better programming.''

Leonard Hill, a producer of movies and TV series and founder of Leonard Hill Films, is concerned that the new ruling signals the end of independent producers.

``Network control of the production of programs will seriously dilute the ability of creative talent to secure a fair price for their services,'' he says. It will ``also stymie the emergence of new talent and the expression of nonconformist views.''

Because networks are entering into major deals with foreign distributors, foreign tastes could exert themselves more over program choice, Mr. Hill says. But network executives counter that the new rules will create new sources of funding for projects.

``Independent producers will have three more bidders for their ideas,'' says Richard Cotton, general counsel for NBC. Mr. Cotton calls the new ruling, ``a historic moment.''

``Over the years, the sources for the independents to recoup their cost have dwindled,'' he says. ``This should help expand their ranks.''

Dore says that although that possibility exists, personal, creative control over her product will be lost. Before, if a network did not like certain aspects of a product, the producer could look elsewhere. Now, Dore says, it is more likely the same producer will be employed by that network.

``The chance for one of us to grow into an empire like [Norman] Lear, [producer of ``All in the Family,'' ``Maude,'' and others] is now very unlikely,'' she says. ``Some of the best in the business got into it because they had a personal vision. Now those people may go into another business.''