Paramount weighed down by UPN, syndication

HOLLYWOOD (Variety) - It's been a mixed bag for Paramount on the TV side.

Struggles at the UPN network and trouble spots in its formidable slate of firstrun syndicated shows were partly offset by the network production arm's late-year sleeper success with the CBS drama ``JAG'' and the new Ted Danson sitcom ``Becker.''

Parent company Viacom is still betting big on the broadcasting side: the Paramount Stations Group continued its acquisition spree, buying three more stations to bring the total number of outlets in the group to 19.

UPN

ROCKY ROAD: It's been a difficult year for UPN, which has seen its ratings erode by 40% after newly installed CEO Dean Valentine revamped nearly the entire programming lineup and rapidly expanded from three to five nights.

In its attempt to air more mainstream, broad-appeal series, UPN lost its core audience of black viewers and failed to find new ones to replace them.

UPN further alienated its black viewers with ``The Secret Diary of Desmond Pfeiffer,'' a farcical comedy set in the Lincoln White House during the Civil War. It drew protests from black activists who said the show trivialized slavery.

LOOKING AHEAD: At midseason, Valentine decided to reverse course. While he had previously decried the networks' foncus on demographics, UPN is now targeting a younger and more male audience with edgier and more experimental fare.

The network has high hopes that a midseason animated version of ``Dilbert'' will be the hit it needs. UPN's new drama ``Seven Days'' is showing some promise as a companion to `` Star Trek: Voyager.''

UPN has also cut a creative deal with the talent agency UTA, which will serve as an extension of the netlet's development team by shepherding projects from alternative writers on the agency's roster.

The biggest challenge in the new year is to put to rest speculation that one of UPN's owners, Viacom or Chris-Craft, will pull the plug, or that Viacom will partner with a larger network like NBC or CBS.

PARAMOUNT NETWORK TV

HIGH POINTS: Two of Paramount's series are candidates for sleeper of the year: ``Becker,'' the CBS midseason sitcom with Ted Danson, and the CBS drama ``JAG.''

``Becker'' arrived with little fanfare, but has chugged along nicely after ``Everybody Loves Raymond'' on Monday night.

``Talk about bravery to come back to a sitcom that fast'' said Paramount Network TV president Garry Hart, referring to the quick demise of Danson's 1996 sitcom ``Ink.''

At the start of the season, no one even mentioned ``JAG'' in the Tuesday battle among ``King of the Hill,'' ``Home Improvement,'' ``Mad About You'' and ``Buffy the Vampire Slayer.''

But ``JAG,'' in its third season on CBS after NBC canceled it, has blossomed into a top player for CBS, winning its timeslot in homes and nearly matching Fox's ``King of the Hill'' in key demographics.

Paramount tends to make fewer expensive writer deals and launched fewer shows than some other studios, but its persistence has paid off.

``I'm proud of the fact that we don't give up,'' Hart said. ``To take a show one network has canceled and to have it emerge as a hit on another network is extremely rewarding. And 'JAG' isn't even close to peaking. It's like a snowball rolling downhill.''

It's also been quite a year for Paramount's biggest sitcom, ``Frasier.'' After winning the best comedy Emmy for a record-setting fifth year in a row, the sitcom won the coveted Thursday 9 p.m. timeslot, filling in for ``Seinfeld.''

Getting the spot was a mixed blessing, though, and ``Frasier'' has received its fair share of criticism this season, both about the storylines and about the ratings declines, especially among men, compared with ``Seinfeld's'' enormous peak.

LOW POINTS: Paramount Network TV was caught up in the controversy surrounding UPN's ``Desmond Pfeiffer,'' which Paramount produced. Protests were staged outside the studio gates, and Hart said the controversy and its effect on the show were low points for the studio this year.

``'Desmond Pfeiffer' got the raw end of the stick,'' Hart said. ``We're always willing to take our lumps, but it was absolutely never given a fair chance.''

Also a disappointment was the highly anticipated Nathan Lane comedy from the producers of ``Frasier,'' called ``Encore! Encore!,'' which NBC benched after just four episodes.

SYNDICATION

Paramount Domestic TV, headed by co-presidents Frank Kelly and Joel Berman, had a rocky year with some of its firstrun programming, but it scored big on the off-network side by nabbing the distribution rights to DreamWorks' blossoming ABC sitcom ``Spin City.''

REVAMP: All told, the effort spent on shoring up existing shows may have distracted Paramount's top brass from focusing on syndie development for 1999. ``Who Knew?,'' an offbeat gameshow developed by ``Lethal Weapon'' director Richard Donner, is the one project confirmed as a contender for fall '99.

Paramount went to great lengths in 1998 to salvage its long-running newsmagazine ``Hard Copy'' by replacing its longtime anchor team and shifting the tone from tabmag dish to newsmag human interest stories. Paramount's new talkshow hosted by Howie Mandel has garnered tepid ratings since its bow last June, making it unlikely that ``The Howie Mandel Show'' will be picked up for a second year.

And after a five-year run, NBC decided to drop Paramount's Leeza Gibbons- hosted talker from its daytime lineup when the show's contract runs out in August. However, Paramount intends to keep ``Leeza'' going in syndication, and by year's end the distributor had sealed a number of deals with stations.

HIGH POINTS: On the plus side, Paramount syndication veterans ``Entertainment Tonight,'' ``Star Trek: Deep Space Nine'' and ``Montel Williams'' remained strong. In fact, Paramount signed long-term renewals for ``ET'' with the CBS station group through 2003. And the studio opted to take ``DS9'' out on a high note by announcing that the 1998-99 season would be its last, adhering to the seven-year tradition set by its predecessor ``Star Trek: The Next Generation.''

On the off-network front, Paramount struck a deal in May with DreamWorks to handle the sales of ``Spin City,'' which surprised most TV prognosticators by coming on strong at the start of its third season this fall. Paramount also wrapped up the syndication sales process for its own ABC comedy ``Sabrina, the Teenage Witch'' and the UPN comedy ``Clueless.''

CABLE

HIGH POINTS: Driven by its powerhouse MTV Networks division, Viacom's cable networks had a strong 1998, and there's no reason why 1999 should be any different.

During the last year, MTV made significant programming adjustments, which solidified the channel's ratings.

Over the past few years, the cable channel had been moving away from its core music programming, with shows like ``Singled Out,'' ``The Real World'' and ``Road Rules.'' But this strategy took its toll on ratings -- as well as the hipness zeitgeist -- so programmer Brian Graden was brought in.

The new programming chief quickly put dozens of new shows into development. Many brought MTV back to its music roots in innovative ways.

``BIOrhythm'' is MTV's unique take on A&E's ``Biography.'' The show profiles musical artists and relevant VIPs such as Martin Luther King Jr. using only video clips and music.

Other new shows appealed to the often irreverent taste of teenagers. MTV's new hit ``Celebrity Death Match'' features Claymation celebrities pitted against one another in a no-holds-barred fight. Matches have included Hillary Rodham Clinton vs. Monica Lewinsky and Tim Allen vs. Jerry Seinfeld.

As a result, the average number of households watching in primetime increased 10% in 1998 to 518,000. Total day households increased 14% to 346,000.

Because advertisers value MTV's high concentration of 12-24 viewers, the network earns much more per rating point than most of its competitors. In 1998, Paul Kagan Associates estimated that MTV earned $350 million in ad revenue. In comparison, Lifetime ($339.2 million) and A&E ($225 million) earn less ad revenue even through they draw twice as many viewers as MTV.

NICK PICK: Even more important to MTV Networks and Viacom is Nickelodeon, which is now the third-highest-grossing basic cable channel. Kagan estimates that Nick generated $865.4 million in revenues in 1998 and will total $938.5 million in 1999.

With a stockpile of original hit kids shows such as ``Rugrats,'' ``Hey Arnold!,'' ``The Secret World of Alex Mack,'' ``Wild Thornberries'' and ``Angry Beavers,'' Nick has become the dominant kids programmer in television.

It could be difficult for Nickelodeon to keep growing its kids ratings, however. From 1997 to 1998, Nick held its No. 1 ranked 1.6 cable universe rating for total day, but its average households declined by 22,000.

Nick's viewership growth could be stymied by two different factors.

For one, competition for kids' eyeballs has never been more cutthroat: among the crowded field are Fox Family Channel, which launched in 1998, the Cartoon Network, the Disney Channel and its offshoot Toon Disney, ABC and Fox on Saturday morning, Fox and the WB on weekday afternoons and PBS on weekday mornings. In addition, HBO has launched a separate family-targeted service, and Showtime airs much more kids and family fare than it used to.

Also problematic for Nick -- and all other kids programmers -- is research that indicates kids are watching less TV than they used to. After years of gradual declines in kids 2-11 TV viewing, Nickelodeon's own research said that kids' viewership dropped a stunning 13% in the fourth quarter of 1998 compared to the same period a year ago.

ADULT FARE: Nick's post-9 p.m. of vintage fare, Nick at Nite, also continued to garner strong ratings through the night and overnight.

Nick at Nite's 24-hour spin-off, TV Land, has quickly grown to more than 35 million subscribers. This year, the channel of classic oldies will add more than 30 cop and crime series from Universal, including ``Dragnet,'' ``Kojak'' and ``Baretta.''

Through ratings and distribution growth, TV Land increased its primetime household average 106% to 200,000 in 1998.

MUSIC FIRST: MTV Networks' other music channel VH1 also had a breakthrough year and executed a major turnaround in 1998. Under the direction of hard- driving president John Sykes and programming chief Jeff Gaspin, VH1 has been transformed from a floundering flanker channel for MTV into a channel that authoritatively portrays the stories and music of rock stars from today and yesterday.

It's no small feat to grow viewership on a music channel, and VH1's average primetime households increased 45% to 256,000 last year.

IT'S SHOWTIME: Viacom's other programming division, Showtime Networks, also had a positive year in 1998. Helped immensely by the growth in direct broadcast satellite distributors such as USSB and EchoStar, Showtime and its smaller sibling networks the Movie Channel and Flix added 1.2 million subscribers in the year ended Sept. 30 to total 18.8 million subscribers.

Under the supervision of Showtime's programming chief Jerry Offsay, the pay TV network premieres several dozen original films each year, much more than its competitors. The strategy has made Showtime less reliant on theatrical films and has appealed to viewers looking for fresh, provocative product. It also has helped Showtime keep its costs down because the network cuts original production deals where it only has to put up about half of the film's budget.

Reuters/Variety

***

Smooth sailing for Paramount

By Andrew Hindes

HOLLYWOOD (Variety) - What better way to kick off the highest-grossing year in the studio's history than by co-producing the highest-grossing picture ever made?

While ``Titanic'' actually left port on Dec. 19, 1997, most of its historic voyage took place during 1998. Besides racking up a stunning $488.2 million at the domestic box office during the year -- and $1.21 billion overseas -- it also made a historic splash in the video market, with about 25 million sell- through units already sitting on consumers' shelves. Of course, Paramount had to divvy up the record-breaking haul with production partner 20th Century Fox.

But ``Titanic'' was far from Paramount's only box office success of the year: the studio's two big summer releases, ``Deep Impact'' and ``The Truman Show,'' have grossed about $360 million and $250 million worldwide, respectively. ``Saving Private Ryan,'' which Paramount distributed overseas, has grossed about $450 million worldwide to date. The studio ended up No. 2 in the marketshare race, just behind Disney's Buena Vista, with a domestic take of $1.08 billion.

The studio's most profitable 1998 release was probably the Nickelodeon Movies' co-production ``The Rugrats Movie.'' Made for $24 million, the picture is on track to finish with about $90 million domestically, vying with DreamWorks' ``Antz'' to become the highest-grossing non-Disney animated feature ever.

Meanwhile, the company managed to squeeze money out of its library with the $28 million re-release of ``Grease,'' the highest-grossing live-action reissue ever after Fox's 1996 relaunch of the ``Star Wars'' trilogy. Even box office lightweights such as ``Neil Simon's The Odd Couple 2'' turned a small profit for the studio as did the Saturday Night Live spinoff ``A Night at the Roxbury'' and the Miramax/Paramount collaboration ``Sliding Doors.''

MIDDLING TO LOW POINTS: Of course not every Paramount release struck box office gold. Flops included the $28 million Paul Newman/Susan Sarandon starrer ``Twilight''; the $49 million actioner ``Hard Rain'' and the nearly $60 million thriller ``Snake Eyes.''

Once again the studio stuck with its long-held co-financing strategy, partnering with either another studio, a foreign financier or an equity investor on virtually every picture. That forced Paramount to split the proceeds on hits such as ``Deep Impact'' and ``Saving Private Ryan'' with DreamWorks. (Both Paramount and DreamWorks' slice of the ``Ryan'' pie was further eroded by gross participation payouts to Steven Spielberg and star Tom Hank).

But the co-financing strategy took the sting out of costly box office duds like ``Snake Eyes,'' on which Disney took foreign rights, and ``Hard Rain,'' which Mutual partially bankrolled. In the end, both pictures are expected to result in only minor losses to the studio.

Meanwhile, Paramount's 19-year-old ``Star Trek'' franchise appears to be running out of fuel, at least in its current configuration. The ninth installment, ``Star Trek: Insurrection,'' got off to a slower start than the studio had hoped for, and should just top $70 million domestically. But the sci-fi saga hit warp speed in its initial overseas bows in the U.K. and Germany, so the $58 million-budgeted pic probably won't be the franchise's last voyage into the final frontier.

TALENT SCOUTS: Paramount has produced or co-produced three of the last four best picture winners: ``Forrest Gump,'' ``Braveheart'' and ``Titanic.'' As Oscar season goes into high gear, Paramount hopes to keep its recent streak alive with such entries as ``Saving Private Ryan,'' ``The Truman Show'' and the low-budget thriller ``A Simple Plan.''

The past year saw the studio signing a number of potentially promising production deals, including ones with former Touchstone chief Donald DeLine, multi-hyphenate Jodie Foster -- whose deal calls for her to star in an upcoming Paramount pic -- and writer Paul Attanasio and Katie Jacobs' Heel and Toe Films.

Adding to the company's list of financing partners is Mandalay Pictures, which has already signed on to bankroll the Tim Burton-helmed ``Sleepy Hollow,'' starring Johnny Depp and Christina Ricci.

LOOKING AHEAD: 1998 will be a tough act to follow, but Paramount has put together a star-heavy lineup to meet the challenge. Pictures featuring Mel Gibson, Tom Cruise, John Travolta, Tommy Lee Jones, Nicolas Cage, Julia Roberts and Richard Gere, Steve Martin and Goldie Hawn, and Matt Damon and Gwyneth Paltrow grace the studio's tentative 1999 slate.

Behind the camera, too, the studio is in business with some heavyweight filmmakers, including directors Martin Scorsese, Tim Burton, John Woo, Anthony Minghella and Alan Parker.

As usual, production powerhouse Scott Rudin has his hand in an astounding number of Paramount pictures, including the aforementioned ``Sleepy Hollow,'' Parker's ``Angela's Ashes'' and Scorsese's ``Bringing Out the Dead.''

At the same time, MTV Films, Viacom chairman Sumner Redstone's experiment in corporate synergy, will supply at least four low-budget, youth-oriented releases from less-seasoned filmmakers. Those entries include high school sports comedy ``Varsity Blues,'' Gen-X dramedy ``200 Cigarettes,'' high school black comedy ``Election'' and urban comedy ``The Wood.''

Paramount's specialized division will also make its long-awaited theatrical debut with at least three recent acquisitions: ``The Adventures of Sebastian Cole,'' ``Get Reel'' and ``The Powder Keg.'' The fledgling specialized arm will also release Lakeshore's ``Passion of Mind'' starring Demi Moore and directed by ``Ma Vie en Rose'' helmer Alain Berliner.

Paramount will also partner to an even greater extent with rival studios, including Warner Bros. (``Payback''), Disney (``Bringing Out the Dead'' and ``A Civil Action''), Miramax (``The Talented Mr. Ripley'') and Polygram/Universal (``Angela's Ashes'').

Reuters/Variety