Let Him Entertain You
Comcast’s new president of programming could maybe use a beer right now. He is sitting in a sterile conference room on the ninth floor of the sterile Comcast building at 1500 Market. He’s distracted, his mind in BlackBerry, forcing his laughs and trying not to seem like this is the last place he’d like to be right now. His biggest, most glamorous, most Hollywood deal — snagging certain NFL broadcasting rights for his company’s unspectacular Outdoor Life Network — crumbled this morning, which means another relatively boring year of relatively boring ratings for the channel now known as “OLN,” the channel that was supposed to be going up against a certain other sports cable channel ending in “N.” With the hockey and PGA Tour rights he won last year, the NFL deal would have been just the shot of momentum necessary to position Comcast as a bona fide programming force. But it was not to be. What’s worse, Shell has to go home and plan an outfit. Because tomorrow, the man who moved from Brentwood, California, to Narberth last April, charged with turning Comcast into the Modern, Diversified Media Company of the Future, has to attend the Academy Ball, an event he expects to be six or seven hours of boring, and for which, for the first time in his life, he has to wear tails. In L.A., they call this sort of thing the Academy Awards. But he’s new in town, and in the Philly power circuit, and on the Main Line. It’s practically his Comcastic duty to go. But when Shell returns home, his digital video recorder will hold his reward: last night’s episode of The O.C., in which Marissa’s precocious 14-year-old sister attempts to steal her ex-boyfriend. (Is the actress really 14, Shell wonders? Google: Yes.)
J eff Shell used to work for the company that made The O.C. happen. Now he works for the company that makes the DVR happen. The fact that these businesses — content and distribution, technology and entertainment — are merging and transforming and changing every second is why he is here, in Philadelphia, instead of California, where he spent 29 of his first 40 years. It’s an interesting change of corporate paces, and cultures. At Fox, Shell explains, the Christmas party was “like Saturday night out with your friends.” At Comcast, it’s … “more like Thanksgiving dinner with your family.” At Fox, everyone was chained to their TiVos. At Comcast, well, employees tend to watch It’s Your Call With Lynn Doyle. At Comcast, the Academy Ball is Saturday night out with your friends. And Shell’s grudging presence there flies in the face of our steadfast view, in Philadelphia, of how executives should act. Executives don’t care about The O.C. Executives don’t obsessively TiVo Prison Break. Executives crunch numbers and keep their eyes on the bottom line, and their executive sons, through discipline and shrewd negotiating skills, turn their business into the largest cable company in the country, with 21.4 million subscribers and $22.3 billion in annual revenue.
And yet Jeff Shell is probably the most important guy at Comcast these days. In fact, he may be the most important guy in town, because it falls largely upon him to transform our city’s biggest company from an old-style cable outfit into a sleek programming juggernaut, into the Google of video. Comcast’s fate is in his hands. Because we now can download Lost and Desperate Housewives and Punk’d and Laguna Beach directly onto our iPods; we can get video through the Internet, TV from the phone company, wi-fi on our cell phones — all services Comcast offers that we can now get without Comcast. Meanwhile, satellite providers are clawing at Comcast’s market share. The FCC is exploring the possibility of requiring that cable operators offer channels “à la carte.” And the City of Philadelphia is promising us high-speed Internet anywhere, anytime, for 10 or 20 bucks a month. “Technology is just blowing the whole thing up,” says Jeff Shell. “You can get whatever show you want anytime, and you can take it with you and you can put it on your iPod and you can watch it on demand and watch it on different TVs in your house.”
Comcast saw all this coming, of course. President and CEO Brian Roberts knew that eventually, theoretically, his tens of thousands of miles of fiber-optic cable — “pipes,” in industry vernacular — would be worthless if he had nothing to shoot down them: That is, after all, why Comcast tried to take over the Walt Disney Company two years ago. Except that then, the stakes seemed lower. Comcast had only just released its first DVR; the iPod and the BlackBerry were both only celebrating their first million users. Content — e-mails and music and TV shows and news and weather and movies — didn’t seem nearly so portable, or reachable via so many avenues or with so little regard to timing. Not only was there no iPod video; wireless Internet cards were fairly scarce, and the city hadn’t yet unveiled its wi-fi proposal. Just two years ago, we were much more tethered to distributors like Comcast, or the video store, or the office T-1 connection. Then, the experts all assumed Comcast was mainly interested in Disney for one thing: ESPN, which charges as much as $2.60 per month, per subscriber, to the cable companies like Comcast for the right to shoot its signal down their pipes. But Comcast knew that Disney or no Disney, it needed content. So when its bid for Mickey & Co. failed, it banked its future on the next best thing, its own Hollywood mogul-in-training, a then-39-year-old California boy named Jeff Shell.
As Comcast’s new content czar, Shell has to make up for everything that Comcast missed out on when it failed with Disney; he has to create the future that wasn’t. If he succeeds, Philadelphia could truly be a town on the forefront of media, communications and technology, a breeding ground for future moguls, a glam zone. If he doesn’t, well, Comcast will remain what it has always been: a cable company. And that’s if it’s lucky.
J eff Shell starts his days in Philadelphia as he did in Los Angeles, by turning on the TV. He hops on the treadmill in his home in Narberth, where he lives with his ex-politico wife, Laura Fay, and his three-year-old daughter, and watches the channels he’s charged with fixing, channels most of us didn’t even know Comcast owned — the Outdoor Life Network, the languishing E! Entertainment Network, the anemic video-game channel called G4. Or he might watch The Bachelor on ABC. (“I love reality,” he says, not referring to human existence.) He might watch E! for Taradise, the travelogue featuring the not-usually-sober Tara Reid, or Girls Next Door, the reality show about the not-always-blissful lives of the harem of Hugh Hefner, or the recently acquired Isaac Mizrahi show on the Style Network. I ask how Shell liked designer Mizrahi’s much-buzzed performance on the red carpet before the Golden Globes for E! (Mizrahi groped Scarlett Johansson and asked the sorts of questions straight guys wish gay fashion commentators would pose to starlets: “Are you wearing underwear?” he said to Teri Hatcher.) Shell admits he finds Mizrahi’s eponymous talk show on E!’s sister the Style Network “slow.” (He later admits it’s getting better.) Basically, he starts the day watching what it’s his job to watch, and occasionally what he wants to watch, so that he can get a better intuitive understanding of what separates one from the other, the networks he runs and the networks he consumes. If it sounds obvious, it’s not. Media executives are often too glued to the CNBC ticker to catch “reality.” But these days, programming increasingly has to be compelling enough that people will look for it On Demand. Understanding what reels in the heavy users, the passionate fans, is critical — especially for networks like E! and G4 that target a narrow niche of viewers.
After the treadmill, Shell makes his way through the Inquirer, the Wall Street Journal and the New York Times (in hard copy, with coffee, “because newspapers and coffee,” he muses, almost dreamily, “just go together”), then watches his own networks all day on three flat-screens in his office at 1500 Market, then plows through as much as three more hours when he returns home to the DVR. He lives for Prison Break (Mondays on Fox; it’s a “shame,” he says, that I haven’t seen it yet) and Entourage and The Shield. (“I can’t,” he confesses, “make it through makeover shows.”)
Aside from scoring rights to the NHL, Shell’s victories since arriving less than a year ago have not exactly been case studies in media moguldom. Just weeks ago, for instance, he announced the creation of an on-demand fitness channel run by “Body By” Jake Steinfeld (whom Shell has known since Fox acquired his fitness network) and sponsored by New Balance. It wasn’t big money, and it won’t be a huge earner for Comcast in its first few years, but any of us who ever wished we had time to run to the gym will love the service, and Comcast for providing it. More interestingly, it offers a unique way to help advertisers get over their biggest fear: that viewers will TiVo out the commercials. The entire exercise show will be, in effect, a New Balance commercial. So while it wasn’t a glamorous deal in itself, it may have glamorous implications.
Another interesting, if small, development in the world of Comcast content has been its dating on-demand service, on which users can watch homemade videos of local singles. Through his research, Shell learned that it wasn’t really the service that users enjoyed — Philadelphia singles were just as popular in Boston as they were here — but the kitschy combination of homemade videos and on-demand technology. Comcast even made a small reality series based on the show, Dating On Demand. Soon, viewers may be able to vote on actual singles they would like to see fixed up on blind dates.
Then there’s Sprout, a joint venture with PBS geared to toddlers. Nobody is paying attention to it now, but children’s programming is a niche in which all the capabilities of interactive TV and the Internet could easily come together in an educational way parents would pay for.
Enough interesting little deals like these will engender goodwill with subscribers and advertisers. But Shell needs something big, something to burst into a pop-cultural phenomenon, which is why he’s spending much of his time on the company’s three most important channels: E!, the G4 video games network, and OLN.
First, he wooed a trusted associate, Neal Tiles, to G4 from the News Corp empire to give the channel a new, broader direction, and he’s now in the midst of trying to make E! into the TV equivalent of US Weekly (a position it’s largely ceded to VH1). And Shell raised some eyebrows when he shelled out $100 million to win the rights to broadcast hockey on OLN and began negotiations with the NFL, whose presence (had it all worked out) would have turned the Outdoor Life Network into a force — dare we say a competitor to ESPN? (Shell calls that idea “absurd.”)
But in every absurdity is a grain of reality, and there was probably nothing Shell dreamed about more when he shut down his DVR at night — as NFL negotiations wore on, as NBC and DirecTV backed out of bidding, leaving, it seemed, only Comcast (which would have made for a sweet Super Bowl) — than some triumphant crushing of SportsCenter in the ratings.
As it happens, Jeff Shell began his media career at Disney in 1991, and he started, as all Disney execs do, by walking around Walt Disney World for a day dressed as a beloved Disney character: in Shell’s case, Eeyore. And indeed, he quickly got stifled by the company’s Eeyore-like pace, working in the Disney strategic planning department, a super-division of the company made up largely of freshly minted MBAs (Shell got his at Harvard) that came to be called the “Business Prevention Unit.” Shell’s job was usually to “prosecute” ideas that CEO Michael Eisner, for whatever reason, didn’t want to pursue. Shell hated it. “No meeting at Disney ever seemed to end in a decision,” he says. It was frustrating. Painful. Corporate.
Shell took off in 1994 to head new business development at Fox Television, owned by News Corp, a company so busy being creative, it hadn’t even figured out a decent name for itself. “Rupert,” he says of the company’s eccentric Australian founder, Rupert Murdoch, “is really a man of the people. … He does his own stuff, and he drives himself and he likes watching the stuff he puts on the air and he likes politics and he likes pop culture.” Like many disciples and media junkies, Shell has a bit of a Rupert crush, but the basic truth is that Disney was too detached from the heart of what had made its fans so crazy in the first place, while Fox — Rupert — had its finger on their pulse.
Shell jumped right into the center of all this, mapping Fox’s television strategy. And one of the main growth engines of the TV business was cable. At the time, cable wasn’t exactly sexy. Sex and the City hadn’t happened; The Sopranos hadn’t happened; The Osbournes hadn’t happened.
But by 2000, when Shell was put in charge of the company’s growing portfolio of cable channels, cable was the entertainment industry’s hottest outlet. He recruited an HBO exec to FX, transforming it from a rerun outpost to the curator of absorbing dramas like The Shield and Nip/Tuck, on par with suddenly must-watch HBO, and doubling the revenue. (But his instincts aren’t perfect; “I thought Nip/Tuck was awful, and it ended up being bigger than The Shield,” he says.) And he founded the National Geographic Channel, almost from scratch.
Then Rupert tapped Shell to clean up a mess called Gemstar, an ailing Murdoch-controlled technology company that made interactive program guides. By the time Comcast bid for Disney in 2004, Shell had convinced Comcast to enter into a critical joint venture with Gemstar. And by early 2005, Steve Burke — Comcast’s chief operating officer, whom Shell had first met when the two worked at Disney — had convinced Shell to join Comcast to pretty much invent its “content business,” then just less than five percent of the company’s revenues, but a huge swath of Comcast Future.
“No one could believe it when he went over,” says a former Fox executive who works in the cable industry and says she would kill to work with Shell — if she could stay in New York. “I mean, Philadelphia?” She laughs. Yeah, it seemed crazy. A city that had a government trapped in the 1930s didn’t seem like the place where the next Fox would be born, the next Sopranos developed.
And frankly, Comcast didn’t know if it could happen in Philadelphia, either. “It’s funny, you know, we talk about, what kind of company are we?” said executive VP David L. Cohen one recent morning. “We’re media, we’re entertainment, we’re telecommunications, we’re technology. … ” It is gauche, at Comcast, to call it a cable company anymore, because it is gauche to be a cable company, and Comcast wants to think of itself in much grander, more futuristic terms. Comcast’s self-image is best articulated by its outstanding new “Comcastic!” commercials, in which kids reminisce about the days, pre-on-demand, when the family belonged to Blockbuster; the Future arrives early, and the news shows interview Mark Hamill (the actor who played Luke Skywalker) about it; old folks dance to Missy Elliott. In the pre-Comcastic era, it was hard to imagine someone like Shell outside L.A., so fully do his identity and pace of conversation and pow-pow-pow sentences and jokes seem to have been shaped by Fox. “Philadelphia,” Shell ruminates, with his typically quick Gilmore Girls–esque speech, “is kind of viewed by the outside world maybe as this kind of industrial belt, this kind of historical stop on the Metroliner between D.C. and New York. Then you wake up one day, and suddenly Philadelphia — because of Comcast’s presence — is truly one of the centers of media and technology.”
The Wall Street community, which has been on Comcast’s side for ages, is turning against the stock. It’s close to a three-year low. The Man Who Shorted Enron, James Chanos, recently very publicly shorted — that is to say, bet on a fall in the share price of — Comcast stock as part of a strategy he called “Twilight of the Gatekeepers,” elaborating that Comcast, as merely a “gatekeeper” to the programming and content people wanted, could go the way of the record store. And in a recent New York magazine column, Jim Cramer, the earsplittingly passionate former hedge fund manager and current host of Mad Money on CNBC (who penned a bullish pro-Comcast piece for this magazine in May 2004 and then loudly turned against the stock), predicted that Comcast would buy CBS this year to fend off the coming paradigm.
Certainly, a Big Deal like that wouldn’t hurt. Comcast could also buy some of the channels owned by Scripps Howard (Food Network, HGTV) or Hearst (A&E, Lifetime).
But today, Shell lost the NFL bid to the NFL itself, which decided to use the games to beef up its own content property, the NFL Channel, which is now dedicated mostly to game replays. It’s just the latest sign that proven content — Howard Stern, the NFL, Dave Chappelle — can write its own check these days, and that Shell will have to keep his eyes open and his pace frantic looking for new openings into the business down the line. He will also need to woo more media types to come help him out in our new media capital.
It’s a lot to multi-task; he’s already thinking about skipping the Super Bowl, now that it’s not going to be as sweet as he thought. “I may just watch it at home with some neighbors. … Laura promised to make a big thing of chili if I do,” he e-mails. And that is why we love him. Watching the Super Bowl in Narberth. On his 51-inch flat-screen. With chili. Maybe glamour, as Comcast COO Steve Burke likes to say, is overrated.
But there’s a rumor afoot that Shell’s Laura looks like Eva Longoria. When I first meet him, he says he thinks she looks more like Snow White; later, he’s decided he likes the Longoria analogy. “It will score me points,” he laughs. Especially when he shows up with Laura at the Academy Ball.
“We actually did kind of have fun,” he e-mails me the Monday after.