Once-Struggling Cable Network a Hot Property
The folks at Sony Pictures Entertainment’s Game Show Network should be cheering each “final answer” on ABC’s “Who Wants To Be A Millionaire?”
After struggling for five years, the network now finds cable operators lining up to carry the network on their systems.
“We are the fifth fastest growing cable network over the past 24 months,” said Michael Fleming, president and founder of the Culver City-based Game Show Network.
Since the arrival of “Millionaire,” GSN’s mix of new and classic quiz shows has added 7 million subscribers, bringing its total to 27 million.
That’s already more than HBO, a paid service that has 20 million subscribers. And Game Show executives project that the channel’s base will double within the next three years, which would put it ahead of The History Channel’s 50 million subscribers, and not far from CNN, a basic cable network with 70 million subscribers.
Cable operators who once said they had no room on their systems for GSN now want the network, including Comcast Corp., Adelphia Communications Corp., Cox Communications and Time Warner.
“They are benefiting in part from the success of ‘Millionaire,’ but also the increased interest in game shows in general,” said Bill Marchetti, an analyst at Paul Kagan Associates, a Carmel-based media research and consulting firm.
The network posted an operating loss of $6 million in 1999, and Marchetti projects a $1 million operating loss for 2000. Fleming anticipates that the network will be edge into the black by year-end.
Revenues, meanwhile, are smoking $42.3 million in 1999, compared with just $7.4 million two years earlier. This year, Marchetti looks for $62.4 million, with revenues pretty much divided between advertising and cable and satellite operators. “That could be conservative,” Marchetti said, “because we made our estimates last spring (prior to the debut of ‘Millionaire’).”
Part of the holdup toward profitability involves the subscriber base; advertisers tend to get more interested once the number tops 50 million.
Game Show Network is a blend of classics like “Family Feud,” “Match Game” and “The $10,000 Pyramid” and new shows like “Hollywood Showdown” and “The All New 3’s a Crowd.”
New shows now make up three-and-a-half hours of daily programming. The aim is to have one new show added each quarter until the daily schedule reaches 50 percent original content.
“People like game shows,” Fleming said, “but nobody had the guts to put them back on the air in prime time for 36 years. You also have to add the human component. People like competition.”
To enhance the appeal, GSN has embraced interactive technologies. WebTV subscribers can play real-time interactive games like “Wheel of Fortune” and “Jeopardy.” Home viewers can also win prizes while they play interactively. New technologies can also be used to freshen-up older shows like “The Price is Right” by showing what the price of an item would be today compared to its price two decades ago.
Several of the older quiz shows, of course, were tarnished during the scandals of the 1950s, raising the $64,000 question: Could it happen again?
Fleming says yes. “Look at the amount of money there are hundreds of thousands of dollars at risk,” he said. “It’s hard to believe that people, who are weak in the flesh, won’t do some manipulating.”
But Jake Tauber, executive vice president of Game Show Network, said, “The chances of fixing a show are virtually nil. The stakes are higher now. Back in the 1950s, it wasn’t illegal to fix a game show. Today, there are federal laws against it. You have to sign federal forms that you in no way altered the outcome of the show. If you do, there are severe consequences.”
