Chapter 749: Two Options

[Chapter 749: Two Options]

Lifetime Television's foundation ultimately lacked a bit, as Eric reviewed last year's programming schedule. In all of 1994, the network only aired 11 low-budget TV movies and a few soap operas that were repeatedly shown during prime time. There was little originality in the rest of the schedule.

However, with the success of America's Next Top Model and Project Runway amassing a solid fanbase, it made perfect sense to further invest in programming.

"Terry, I admit you have a point, but this situation is about to change. Since Lifetime was able to create Project Runway and America's Next Top Model, we can certainly produce more successful TV shows. Although the two reality shows will wrap up before the New Year, Lifetime has decided to kick off production on a second season of America's Next Top Model, which can launch right on time in the spring. So, you really don't have to worry about Lifetime's popularity issues," Eric stated, chuckling to himself as he recalled Cindy's antics earlier that day.

Because of scheduling, Project Runway wouldn't get picked up for two seasons within a year. Therefore, Eric could only hope Cindy would begin production on a second season of America's Next Top Model by year's end to maintain Lifetime's newly acquired popularity.

Despite having many workaholics around him, it was evident that Cindy and Linda were not among them. Producing two seasons a year, while balancing a ton of other work, would be incredibly draining.

Over the past few days, Eric had been scheming on how to persuade Cindy into this, even considering offering her a raise if necessary. Before he managed to bring it up, Cindy was already at his doorstep.

Terry Semel didn't know what was on Eric's mind and naturally assumed the sudden smile on Eric's face was a sign of determination. After a moment of hesitation, he said, "Eric, 20 cents is the best offer Warner can make."

Eric wiped his smile away and looked at Terry Semel. "20 cents is fine, Terry, but I have one condition."

Terry Semel raised his hand, "Go ahead."

"Lifetime can sign a three-year fixed revenue-sharing contract with Warner Cable, locked at 20 cents. However, Warner Cable needs to carry Lifetime's signal across all its cable packages," Eric proposed.

"Eric, that's not feasible," Terry Semel shook his head immediately.

The plan entailed that once they secured the broadcasting rights, Warner Cable would provide some cable options featuring Lifetime for users to choose. Given Lifetime's limited audience, it was expected that Warner Cable would see its subscribers for Lifetime reach approximately 6 million -- not even half of Warner Cable's total 15 million subscribers.

But Eric's condition was ambitiously aimed at snatching all of Warner Cable's subscriber resources. Under any considerations, Terry Semel wouldn't agree.

Eric didn't react much to the refusal and offered, "In that case, Terry, let's consider another option: increase the revenue-sharing to 30 cents, with the ability to renegotiate the rates annually."

Terry Semel shook his head again. "30 cents is too high, Eric. As I just mentioned, Lifetime is worth at most 20 cents."

Eric nodded in acknowledgment, picked up his coffee, took a sip, and said, "If that's the case, let's wrap it up for today, Terry. I'm actually not great at business negotiations; usually, Jeffrey handles these matters. You may want to consider this and send someone to talk with the higher-ups at Firefly."

After a moment, he glanced at his watch. "Lunch is almost here; you should try the apple pie. I usually don't have much of a sweet tooth, but Joan's is exceptional."

Terry Semel's expression grew grim; clearly, Eric was going to play the waiting game again.

If it entered into the formal negotiation phase, resolving this would take at least ten days to a month. Eric clearly understood the current situation at Time Warner. Lifetime could afford to wait; after all, Comcast, Tele-Communications Inc., and many other smaller cable and satellite operators were actively bringing Lifetime on board. However, Warner Cable was losing thousands of subscribers daily, and they couldn't afford any delays.

Following several minutes of hesitation, Eric sensed Terry was weighing the pros and cons, so he waited patiently.

Eventually, Terry Semel spoke up again, "Alright, Eric, 25 cents, but that's my final offer."

Eric shook his head, shrugging his shoulders. "Terry, I really only have two options. In fact, 30 cents isn't unreasonable. ESPN's broadcasting fee is $1.30. Plus, I would honestly recommend you choose the first option. Trust me, over the coming years, Lifetime's growth will astonish everyone. It will inevitably become a staple across all operator packages, and Time Warner could enjoy three years of lower revenue shares."

Seeing there was no more room to bargain, Terry Semel finally yielded. "Okay, Eric, I'll get back to you tomorrow."

"Sounds good," Eric replied without rushing him. He understood Terry's precarious position at Time Warner over the past couple of years made him careful about even minor partnerships that needed board approval.

...

The next day, Eric received a call from Terry Semel, confirming that Time Warner ultimately chose the second option, raising the revenue share to 30 cents.

The details of the cooperation would obviously be laid out by management, and in the following days, Eric began focusing on the production issues for Lifetime Television.

At that moment, no one had mentioned the initial $100 million budget plan. Everyone understood that raising Lifetime's viewership in non-prime time slots to the levels achieved by America's Next Top Model and Project Runway couldn't be accomplished with merely $100 million.

The biggest concern for Firefly Group and Hearst was how to maintain the momentum generated by the two reality shows.

The answer was straightforward: produce or acquire more quality TV programs.

"I have communicated with headquarters; Lifetime will obtain broadcasting rights for Sleepless in Seattle, Ghost, and Pretty Woman next spring. These films have proven very popular with women," Anne Sweeney reported to Eric from the ABC headquarters office.

All three films had grossed hundreds of millions, and even years later, the price for individual broadcasting rights remained above a million dollars. Though all were under the Firefly Group, inter-departmental finances needed clear accounting. Fortunately, Lifetime would receive a favorable deal.

Sitting across the table, Eric flipped through the memo Anne Sweeney handed him and asked, "How do you plan to schedule the broadcasts?"

"As a lead-in for our new shows next year, Lifetime secured six airings. The standard prime time covers 22 hours weekly, but Lifetime lacks the capacity to fill all that time. So, I plan to focus on airing two hours from Sunday to Thursday, and an hour on Fridays and Saturdays for a total of 12 hours of prime time programming starting next spring."

Typically, only the traditional Big Three networks could fill all 22 hours in prime time. Even Fox, in its current state, only managed 18 hours each week.

Eric was satisfied with Anne Sweeney's programming arrangement and nodded, inquiring, "Have you reviewed the original text and scripts for the first two episodes of Sex and the City?"

"Yes," Anne Sweeney affirmed.

"What's your take?"

After pondering for a moment, she replied, "Bold, avant-garde, stylish, with a touch of feminine nuance and cleverness. Personally, I love the story, and I believe female viewers will too."

Eric smiled and said, "Exactly. Avant-garde and stylish can easily serve as the standards for future Lifetime productions. Although, during our audience surveys, we found nearly 30% of the viewers for both America's Next Top Model and Project Runway were male, don't ever think about broadening the audience for the network. General audience networks belong to the big public broadcasters. We need precision; Lifetime must solidify its viewer base among strong, fashion-conscious women aged 18 to 35, and tailor the programming around this demographic."

"Eric, if that's the case, it might restrict Lifetime's growth potential, as 18 to 35-year-old women are still a minority," Anne Sweeney countered, sketching a circle on her paper, continuing, "If this circle represents that demographic, then while producing programming, we need to keep their needs in mind, thus further narrowing our subject matter. Some topics in that tighter circle will inevitably not appeal to some women, leading to viewer loss and gradually shrinking the circle more and more."

Eric laughed, taking the paper and pen from Anne Sweeney's hand, and drew a larger circle outside of what she had just drawn. "You're looking at it the wrong way. I assume this circle reflects North American female viewers, right? But outside of North America, there are far larger audiences in Europe, Asia, and Latin America. As long as we can craft quality programs in this female viewer demographic, we can establish a solid brand presence. Lifetime's signal could extend to markets beyond North America. I hope you won't limit your focus here but keep an eye on the entire globe. Your ultimate goal should be to create a lasting impression among all women worldwide that Lifetime's programs are the trendsetters in fashion and the conversation starters among women. Ideally, it should feel like a girl would have trouble fitting in if she hadn't watched Lifetime."

Anne Sweeney's eyes widened, and she was genuinely surprised by Eric's ambitious vision. She asked instinctively, "Is this really achievable?"

"When Ted Turner founded CNN in 1980, almost everyone laughed at his audacity, convinced that a dedicated news channel could never be profitable. And yet? Look at where news networks are today, operating worldwide and generating profits that rival the Big Three. That is the possibility."

"Well," Anne Sweeney shrugged, "perhaps I'm a pessimist while you're just the opposite."

"Your statement reminds me of a saying: Do your best, and prepare for the worst."

Anne Sweeney rested her chin on her hand, casting an appreciative glance at Eric as she chuckled softly, "Haha, Eric, turns out you're not entirely confident."

"Who would have thought just a few months ago that a single Lifetime program could attract over 4 million viewers simultaneously? So yes, the future I'm outlining is very much within reach. If there's a potential gold mine here, our job is to dig it out as deeply as we can."

Anne Sweeney perused through the original programming plan and remarked, "If we take a conservative approach, Lifetime could already start turning a profit from this year. However, if we follow your vision and aim for excellence, the program's investment will surely spike, and for the next two or three years, Lifetime may not turn a profit at all."

"Firefly isn't a publicly traded company, so you don't need to sacrifice more extensive development plans for a financial report," Eric pointed out.

"True," Anne Sweeney smiled again. "Since the boss doesn't mind, I'll set things in motion. Let me revise the original plan."

Eric nodded with a smile. "I can temporarily forgo profits, but if we don't achieve sufficient annual growth, expect a "stick" to come down."

"Heh, boss, if your statement carries any dark humor, I suggest you save it for another woman."

After their discussions wrapped up, Anne Sweeney collected her papers and stood up to leave but paused to ask, "By the way, are you attending tonight's party?"

With America's Next Top Model and Project Runway achieving such impressive ratings, the company had to celebrate, and a party was set for that evening.

Eric nodded, "I'll be there. Also, could you call Candace Bushnell, the author of Sex and the City? I have some revisions for the first two episodes' scripts, and I want to discuss the upcoming plotlines with her. Oh, and invite Elizabeth Hurley too, so she can meet with Candace ahead of time to chat about the lead character."

Anne Sweeney was aware that Eric had little time to discuss the script with Candace, so she had to seize this party opportunity. Nodding in understanding and seeing Eric had no further instructions, she turned and left.

*****

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