Hollywood takes on TV

April 12, 1991|By Newsday

ODD THINGS can happen in the name of deregulation. The latest is a ruling by the Federal Communications Commission: It replaces an archaic rule keeping the three television networks from earning profits on reruns with a jury-rigged contraption that effectively keeps them out. It is as if the FCC opened the door a crack to the most lucrative part of the TV business -- and then strung chicken wire across the opening.

Since 1970, CBS, NBC and ABC have been barred from earning profits from reruns of their hits. The point was to keep the networks, which then were the only form of TV entertainment, from becoming too powerful and hurting program diversity. Now, however, cable, independent stations and home video have transformed the home-entertainment business. And producers can peddle their programs not just to the big three networks but to dozens of other outlets. The rule was reconsidered in light of these changes. But letting the networks into the $5.7 billion global rerun market threatens big Hollywood studios, which control more than two-thirds of it. Hollywood lobbied hard to keep the networks hamstrung, and largely succeeded.

The FCC ruled that networks could earn profits from reruns of shows they produce themselves, subject to certain restrictions. Only 40 percent of network shows could be produced in-house. Producers are not anxious to work for networks because it prevents them from developing shows for other markets. But even if the networks suddenly start developing their own shows, it will take four to 10 years for them to have sufficient programming to break into the rerun market. The FCC also set up bizarre conditions on how networks must conduct contract negotiations with producers for shows produced independently -- conditions that all involved find objectionable.

If this all sounds hopelessly complex and needless, it is. Chalk it up as a victory for Hollywood's lobbying clout over common sense.

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