Ted Turner is launching a classic movie channel


With John Wayne and Humphrey Bogart at his side, next spring Ted Turner will try to muscle his way onto another channel of your cable dial.

Mr. Turner will launch Turner Classic Movies, his ninth channel, April 14, the 100th anniversary of the first commercial movie. The new Turner Broadcasting System channel will feature films 24 hours a day, without commercials.

In going after the classic-movie niche on cable television, Mr. Turner faces a small but innovative competitor in American Movie Classics. The pioneer of a commercial-free cable channel featuring old movies, AMC counts 45 million subscribers and devotees.

"I wouldn't underestimate AMC," says Kim Mitchell, a programming specialist at MultiChannel News, an industry trade magazine. "AMC has a loyal following, and I don't think anybody is going to nab its audience right away."

Why is Atlanta-based Turner Broadcasting, a $2 billion giant with two of the top four cable channels, bothering with a such a specialized niche as a classic-movie channel?

Because the company loves to turn a new buck off an old trick.

Old movies, now referred to as classics, have been the staple of non-network television since the rise of independent stations in the 1950s.

Turner, with a library of some 3,500 films, owns many of these films. That means it can show them repeatedly at little additional cost.

"We're not burdened by huge licensing fees to the studios," says Bradley J. Siegel, the Turner executive vice president who will head Turner Classic.

The introduction of Turner Classic is part of a larger strategic move. The company wants to reposition its two top channels, TNT and SuperStation TBS. Both have long featured Turner library movies, which include films.

But now the company wants these channels to become more commercial, appealing to a wider audience. That means featuring more sporting events and original shows.

"Classic movies do not have the mass appeal of newer movies," says Mr. Siegel.

Turner Broadcasting already produces 10 to 15 original movies a year, but this number should grow substantially once the purchase of two small Hollywood studios is completed.

While the stakes are relatively small for Turner Broadcasting, the company is playing hardball in establishing its new channel. In January, Turner hired Mr. Siegel away from AMC, where he was in charge of programming. Mr. Siegel says he knew nothing about Turner Classic when he left AMC, but his departure was considered a blow, if only momentarily, for the channel.

Mr. Siegel's departure was just the first shot. Next Turner Broadcasting took back 13 of the best titles it had licensed to AMC. That included all of its John Wayne movies and a true classic, "Citizen Kane." The films were part of the 700-title RKO library, which Turner owns.

Taking back these films is part of a larger strategy. Mr. Siegel believes he can force up AMC's operating costs while blocking its ability to expand. Mr. Siegel explains:

While its own library is vast, Turner still licenses more films than any other programmer and gets volume discounts. But its vast purchasing pushes up prices for everyone else.

Not only will AMC pay more, it also will find less to license. "If we up our buying, we shrink what's available out there for AMC," says Mr. Siegel.

Turner Classic also will offer more movies for less, says Mr. Siegel. AMC now features 160 different movies a month. Turner Classic plans to offer 400 -- and charge cable operators less to carry its channel.

Turner Classic, like AMC, will run without commercials. Cable operators must pay for the right to carry either channel.

AMC is not cowed by the big new kid. Says Kate McEnroe, AMC's general manager: "The Turner people tend to be a bit hyperbolic. We don't really see them as a challenger."

Nor is she worried about Turner squeezing AMC out of the niche it pioneered.

By her count, Hollywood made about 10,000 movies between 1930 and 1960, a period the industry refers to as the "Golden Age." Of that, about 7,800 films are in good enough condition to run today, says Ms. McEnroe.

Sure, Turner has a large share, but AMC has exclusive rights running into the next century on about 3,000 films. Ms. McEnroe figures that's enough movies to run a classic channel.

In addition, Ms. McEnroe sees a clear difference between AMC and Turner Classic. Limiting its selection to movies between 1920 and 1970, "AMC goes deeper, while Turner Classic will go broader," featuring any movie.

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