Whether or not Comcast Corp. buys Walt Disney Co.’s stake in E! Entertainment Television, the MSO already is treating the network like a favored child, freeing substantial dollars to overhaul its programming. Witness the recent deal with American Idol host Ryan Seacrest and the acquisition of The Simple Life. Comcast has not made a secret of its intent to grow its content holdings, and taking sole ownership of E! would be a "baby step" in that direction after its failed bid to buy Disney, Yankee Group senior analyst Michael Goodman believes. "Comcast is a special entity in terms of operators," Goodman says. "It is [not] near Time Warner in terms of owning content, but it owns significantly more than players like Charter and Cox." The MSO has been considering an increase in its stake in E! for some time. Talk of a buyout resurfaced recently during negotiations over Comcast’s carriage of other Disney networks. Comcast already owns a controlling 60% stake in E! and consolidates the network’s financials. Comcast took a hard look at those financials in July 2004 when broadcast veteran Ted Harbert took the helm at E! and asked the MSO to make available what Harbert saw as "a disproportionate amount of revenue" from Comcast’s bottom line to reinvigorate the brand. "What I found was a sleeping giant," says the former ABC Entertainment chief, who expects to sign a long-awaited carriage deal with DirecTV this year. "A wonderful brand, but one that was lying almost dormant." With the green light from Philadelphia, Harbert has been restructuring personnel, dedicating a staff to offshoot Style Network, updating marketing and on-screen promotions, mending fences with miffed celebrities and, most saliently, redirecting E!’s programming nexus away from cheap clip shows, one-off reality series and tired red carpet coverage. "E! is positioned in a category—celebrity pop culture—that is exploding, and now is the time to capitalize on the growth in that category," says Comcast programming president Jeff Shell. "Over the past few years the brand has drifted a bit and it was time to sharpen and refocus what we are." If you want to put a face on the new E!, it would be Seacrest, whom Harbert wooed in a $21 million deal to develop and produce programs, orchestrate awards show coverage and serve as managing editor/lead anchor of the revamped E! News. As part of the deal, E! is building Seacrest a studio from which he’ll soon begin broadcasting E!-branded content on Clear Channel stations and host his KIIS-FM show and American Top 40. Deals like this one, and the "broadcast prices" (Harbert’s term) E! recently shelled out to bring the fourth season of The Simple Life and its library to the network, could not have happened without heavy support from the top. "We’re hearing the same pitches as the broadcast networks, whereas we didn’t a few years ago," Harbert says. "If you are not serviced by the creative community because they don’t think you can afford the programs, that’s a critical problem." While E!’s ratings have been sailing along—the network rose 14% during the total broadcast day from January ’05-January ’06 and 19% in prime time, according to Nielsen Media Research—Harbert saw the writing on the wall. "There should have been a real alarm bell going off at E! management in 2001-2002 that some competitors were aggressively coming into this space," he says. That’s when several well-funded competitors upped their Hollywood coverage. Shows like VH1’s Hollywood Snappers, A&E’s celebrity-themed Biography and Bravo’s Project Runway went directly after E!’s audience. Just after Harbert’s arrival, TV Guide Channel snagged E!’s red-carpet queens Joan and Melissa Rivers. Harbert responded by retooling E!’s Live From the Red Carpet, applying a new format that simultaneously shows multiple celebrity interviewers in small bubble screens. A COSTLY BET E!’s programming expansion hasn’t come without some costs. The expense of The Simple Life means the network will produce fewer shows this year. Shell defends the move: "The fact that this acquisition gives us a lot of quality hours of programming means we need to fill fewer remaining hours and can do fewer programs and make them better." For Harbert, the sacrifice is necessary to strengthen E! programming. "I want to be out of the hills and valleys business," he says. To that end, the network has high hopes that #1 Single and upcoming comedy The Chelsea Handler Show will join The Girls Next Door, The Soup, E! True Hollywood Story and Dr. 90210 as network staples. E! also is adding a second, 7:30 p.m. short-form news show called The Daily 10 that will recap top stories. Most new programs will cater to the low end of E!’s broad 18-49 demographic, Harbert says, which now skews about 60-to-40 female to male. The gender demo has shifted 5% since Howard Stern pulled his show off E!, and replacement series like Party @ The Palms and the now-canceled Taradise haven’t held up well. "If we go after the 35-49s, we don’t get the 18-34s. That audience has specific needs," Harbert says. "That’s what The Simple Life is about for us." The network is also crossing boundaries with content from E! International. For the first time an E! International program—101 Sexiest Celebrity Bodies—will run on the domestic network, with more to follow.

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