Baseball from filmmaker Ken Burns (center) will be an early release by Turner Home Entertainment as the new retail distributor of PBS Home Video. Left to right are Sass, Duggan, Burns, Turner and Snyder.

PBS makes a different home video deal with Turner
Network will own rights, do more direct selling

Originally published in Current, April 25, 1994

By Steve Behrens

PBS has signed Turner Home Entertainment as the new retail distributor of silver-topped PBS Home Video cassettes. [Turner later became part of Time Warner.]

In a new coproduction fund that comes with the 10-year deal, Turner will contribute up to $10 million to produce programming, matching the amounts PBS puts into selected programs.

The agreement, announced at a New York press conference April 11 [1994], leaves PBS to do more of the direct-response marketing itself and makes it the rights-holder, owning video rights, receiving royalties from Turner and paying them to producers.

In that role, PBS will be accountable to producers, who are still awaiting payment of hundreds of thousands of dollars in royalties by Pacific Arts Home Video--PBS's original home video distributor, which hit the skids financially and lost the PBS label in October. Under the old deal, Pacific Arts bought video rights directly from producers.

"This will be a lot cleaner,'' said PBS Senior Vice President of Video Marketing Eric Sass. "We will be responsible to producers. The producers would not be in the situation they are with Pacific Arts, where they are unable to collect.''

New venture: PBS Direct

To handle PBS's beefed-up role in direct marketing, Sass said the network will start a new nonprofit called PBS Direct, which will make on-air offers and publish catalogues listing cassettes and other merchandise.

Though PBS will keep direct-marketing rights for PBS Home Video programs, it will let Turner sell cassettes through its affiliated cable networks and mailing lists, while PBS does the same with public TV lists. PBS also will be able to wholesale cassettes to stations for a few dollars per tape, according to Sass.

Turner's huge cable audience for these promotions was a major reason PBS chose the company among more than 14 suitors, including major Hollywood studios, according to Sass.

PBS also saw a compatibility with Turner Home Entertainment's cassette lineup--including the movie "Gettysburg,'' CNN specials and a recent documentary on Geronimo--which would not overshadow PBS programs the way movies would dominate the cassette arms of major studios.

Besides providing revenue, the direct marketing will also give PBS a valuable way to test consumer interest in buying titles on tape. The consumer makes the decision, not a wholesaler or retailer, Sass points out. If a program does well in direct sales, that information could help persuade retailers to give it shelf space.

Testing won't be necessary when PBS knows it has a hit, however. Turner's first PBS release will be a re-release in late June of Ken Burns' The Civil War, followed in late September by his new series, Baseball. In all, 12 titles are lined up for release soon.

Selected programs will be released on cassette at the same time they hit the air. Because most cassette buyers have watched a program on-air before buying, Sass doesn't expect same-date release to reduce broadcast viewing.

Is Nesmith liable?

With the Turner deal tied up, Sass said, PBS can turn its attention to collecting the royalties Pacific Arts owes to producers and the network.

"We are very eager to have our producers made whole,'' said PBS President Ervin Duggan in an interview. "We're very unhappy about the disadvantage to which they were put.''

By arrangement with PBS, royalties for the fall quarter of 1993 were paid directly to producers by a video distribution arm of MCA, which Pacific Arts had retained to handle sales, according to PBS General Counsel Paula Jameson.

And PBS contends that Pacific Arts' chairman, businessman/singer Michael Nesmith, is personally obligated to pay royalties during much of the Pacific Arts period--through February 1993. In addition to the company's contractual obligations, Nesmith personally guaranteed Pacific Arts' performance for the first 36 months of the agreement, according to Jameson.

Can he afford to pay the debts? At the time of the pledge, "he was able to give PBS the assurance that he was good for it,'' Sass said.

But Nesmith's lawyer said his client has contested PBS's position about the guarantee. "We don't agree with their characterization,'' said Los Angeles attorney Alan Schwartz. Nesmith has "taken positions'' that PBS has not fulfilled its own responsibilities, he told Current last week. "There is a major dispute going on.''

And that's not the only one. A group calling itself the Committee for Fairness to PBS Producers urged Ken Burns not to support the Turner deal and promoted a boycott of PBS Home Video until producers receive overdue royalties, according to Variety. An unidentified group reportedly leafleted the PBS-Turner press conference in New York.

PBS also remains at odds with competing video distributors, who question whether the network should be in their business and whether it should sell programs at low home-video prices instead of the traditionally higher audio-visual prices for school use.

PBS Home Video will continue to aim most cassettes around the $19.95 level, Sass said, although retailers are pressing for even lower prices.

The competing distributors hoped to persuade PBS to take a less aggressive role in home video.

"It's up to Congress now,'' said Larry Adelman, a San Francisco distributor and a leader of the Coalition for Public Broadcasting Program Access and Diversity. Only Congress can stop PBS from travelling "further down the road to commercialism,'' he said.

The new home video deal "effectively turns PBS into an acquisition agent for Turner Home Entertainment,'' the coalition charged in a statement April 11. "The coalition believes this is not an appropriate activity for a taxpayer-supported entity like public television.''

"Sequel'' to "Civil War''

Burns' appearance at the PBS-Turner press conference added his endorsement to the venture as well as the opportunity to see clips from his forthcoming Baseball.

The filmmaker said he was "overjoyed'' to be working with his friend Ted Turner. He had looked at 20 video distributors for his programs and had chosen to "come home'' to PBS and Turner, he said.

Burns said baseball had turned out to be a complete metaphor for telling recent U.S. history. "For the last four years,'' Burns said, "I've been producing what I think is the sequel to The Civil War, ... that is to say, who [Americans] became after the Civil War defined this country. The themes of race, of labor, of immigration, of women, of popular culture and advertisement, of the nature of heros--the very themes that animate the struggle of baseball are the struggle of the country at-large.''

More ventures to come

Duggan said at the press conference that "joint venturing with strong media partners'' is "a new strategic direction'' for PBS, and that the network will announce others in the future. Early next month, he elaborated later, PBS will announce an educational program venture with a Hollywood company. And, if public TV wants to make available programs "on demand'' in the more distant future, he expects it will have to enter into ventures with phone companies, cable operators and others that are expected to build giant digital servers.

Also appearing at the press conference were Ted Turner, chairman of Turner Broadcasting System, owner of Turner Home Entertainment as well as the CNN, TBS, TNT and other cable networks, and Stuart Snyder, senior v.p. and g.m. of domestic home video for Turner Home Entertainment.

Snyder previously handled such hits as Teenage Mutant Ninja Turtles and Terminator 2 at the independent Live Home Video label. Since joining Turner a year ago, he has taken on such tasks as relaunching Hanna-Barbera cartoons on video. Turner Home Entertainment also sells tapes of CNN Special Reports, Turner made-for-cable movies and old RKO films.

As in the earlier Pacific Arts deal, PBS Home Video will occasionally release programs never aired on public TV, but which meet PBS's quality standards as decided by PBS programmers, Sass said. For example, PBS Home Video released Peter Kunhardt's Lincoln bio even though it aired originally on ABC.

There may also be crossover among programs cofinanced by PBS and Turner, he said. Some may premiere on a Turner network, with its smaller audience, and others will air first on PBS. "There is no ground rule at this point, other than willingness to cooperate.''

In the Turner deal, PBS will be responsible for acquisition costs and Turner, for retail sales and marketing costs.

The deal will put PBS in a better position to monitor sales and royalty payments, but it entails risks that Turner might fail to pay royalties.

Though Turner is a far more substantial firm than Pacific Arts, Duggan acknowledges that there is some risk to PBS. "There's no investment that doesn't carry risk,'' he said in an interview. "Rights acquisition has always been a two-edged sword, one edge being opportunity and the other being risk. It's impossible to uncouple the two.''

By holding video rights itself, PBS is moving in the direction of holding comprehensive rights for programs--an idea floated by Executive Vice President Bob Ottenhoff last fall. While Duggan denied that the Turner deal represents "a major strategic foray into the publishing model,'' he said it will be "a question of acute importance'' for public TV to set up some system of "central brokerage or management if not central ownership'' of program rights so that it can readily release material in many electronic venues.

To Current's home page

Earlier news: PBS and producers drop prevous home video distributor, Michael Nesmith's Pacific Arts, 1993.

Later news: Nesmith objects to PBS handling of divorce, wins $47 million judgment, 1999.

Outside link: Shop PBS, a section of PBS Online where PBS sells videocassettes directly rather than through Turner's successor (Warner Home Video).

Web page created Feb. 12, 1999
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