Diller has already laid the groundwork. An alliance between QVC, partially owned by Diller, and HSN, owned by an arm of giant cable operator Tele-Communications Inc. (TCI), could create a virtual electronic-retailing monopoly. Under the plan, QVC has the option to acquire both HSN and a controlling stake in an HSN spinoff called Silver King Communications, which owns 12 UHF TV stations. The merger is backed by some of the cable industry’s heaviest hitters. Diller, who started the Fox Network, has joined forces with TCI chief John Malone. NEWSWEEK has learned that former Diller protege Stephen Chao will also join the organization next month, possibly to develop programming for the proposed network. (Chao had been a Fox Television executive until he was fired after offending boss Rupert Murdoch by hiring a male stripper to perform at a company conference.) With the weight of both HSN and QVC behind it, analysts say Best would likely mark the biggest launch of a cable channel since Ted Turner started TNT in 1988.
What makes the network so appealing is its potential for getting more bang out of the broadcasting buck. Unlike conventional TV networks, which make their money through selling ad time, Best would receive a percentage of the profits from merchandise sold on the air. While most networks lose money during the day and make their profits in prime time, TV shopping is profitable virtually all the time. Best could sell goods for say, 12 hours a day, provide 12 hours of entertainment and still come out ahead. “Once the fifth network attracts a broader audience, it’s all upside,” contends Craig Bibb, an analyst with PaineWebber.
But the key is programming, and Diller has bought into a ready-made source. TCI’s Liberty Media Corp., which holds a 65 percent stake in HSN and about a quarter of QVC, also has investments in cable networks like Black Entertainment Television and The Family Channel. Trade publication Inside Media reports that HSN is already negotiating to have Court TV and Sony Pictures supply it with programming. The Walt Disney Co. may also sign on.
Diller hints that the new network will offer limitless possibilities for both product lines and entertainment. But he promises not to build a sitcom around a home-shopping product. “We are not going to have singing and dancing toasters,” he says. One advantage of the format would be to allow product tie ins to particular shows. For example, the network might sell Vanna White T shirts after an episode of “Wheel of Fortune.” But some analysts fear that TV watchers’ penchant for heading to the kitchen during commercials will undermine the concept. Another question: will viewers want to combine shopping with TV watching? “When people go to shop, they’re in a mind-set to shop, but a couch potato is in a mind-set to be entertained,” says infomercial marketer Greg Renker.
Not everyone is confident a fifth network will benefit consumers, either. Some industry observers fear it will attract reruns and cheaply made sitcoms. Others caution that creating a monopoly in home shopping will increase prices and make it more expensive for vendors to get their product on the air. In the end, the ultimate test of Best TV will be its ability to offer innovative and, eventually, original-programming. “There’s an old saying that every palm tree in southern California has been seen on TV at least once,” says media buyer Jon Mandel of Grey Advertising. Given Barry Diller’s track record, however, the vast programming forest may already be sprouting new saplings.
