Networks face new competition from independents: studios provide prime-time programming options.

As if cable television and the Fox Network weren't providing enough competition, the three major networks are facing another potential tidal wave of new prime-time programming.

Independent commercial stations such as KCOP-13 here are airing new one-hour action shows that are showing strong ratings against network shows.

With the January introduction of "Star Trek: Deep Space Nine" and "The Untouchables" on Tuesday night and "Kung Fu: The Legend Continues" and "Time Trax" on Wednesday night, KCOP was instantly competitive with the networks those nights. These shows were created by Paramount Television Group and Warner Brothers Domestic Television specifically for prime time on the independents. With weekly ratings for these shows falling in the 6 to 14 range, they are far surpassing KCOP's old format of showing recycled movies which brought ratings in the 3 to 5 range.

On Feb. 9, KCOP's 8-10 p.m. shows averaged an 8 rating, beating Fox's KTTV (Channel 11) and KNBC (Channel 4) while tying KCBS (Channel 2). "Deep Space Nine" has averaged a 13 rating nationally on 160 stations.

"This gives independent stations the opportunity to compete with network programming and potentially double the amount of advertising revenue in those time periods," said Evan Thompson, president of ChrisCraft/United Television Group, owner of KCOP.

Rick Feldman, vice-president and station manager at KCOP, noted, "There are two ways to build ad sales -- ratings and a healthy market. Our numbers (ratings) have been better but the local economy needs to come back."

Feldman said 85 percent of the advertising time for the Paramount shows has sold out for the season. He declined to give any volume figures for his station's revenues, but said Los Angeles is a seven-station market that generates $900 million annually. KTLA-5 has been the most successful non-network station and shows movies every night in prime time.

For the Hollywood studios that create the shows, they provide a major opportunity to flex their financial and creative muscles. There is a better and quicker profit potential in selling these shows "off-network" to independents.

Traditionally studios lose money selling their first-run shows to the networks but make profits on the "back end" by selling off syndication (reshowing on local stations) and foreign rights, according to Steve Goldman, president of Paramount Domestic Television.

By selling first-runs to the independents, Paramount is guaranteeing itself a positive cash flow up front with a new financial arrangement. Paramount is selling independents both first-run and syndication rights simultaneously and in a barter deal is getting part of the advertising revenues the shows generate. In addition, Paramount may also market these shows in foreign and video markets to generate profit.

"When you combine these two revenue sources (license fees/advertising), it puts us in a position where we can afford to spend $1.5 million to produce one one-hour episode of 'Deep Space Nine.' We are investing more in our shows than the networks are spending today," Goldman said.

Paramount's decision to go "off-net" was driven by marketing considerations, he noted.

Goldman said the networks have abandoned the male audience in prime time because advertisers have pushed them to go after women consumers. The networks dropped action-adventure shows because they are too costly to produce and attract a male audience. Instead, the networks offer primarily situation comedies and reality type shows such as "Rescue 911," he claimed.

Paramount saw an unfilled action niche and filled it with its franchise shows "Deep Space Nine" and "The Untouchables," which have had large male followings, he noted.

Goldman said Paramount is considering more off-network, one-hour action shows for prime time but wouldn't detail plans. He predicted the networks will have to change.

"The television market is restructuring," Goldman said. "It's not unlike GM in automobiles, Sears at retail or IBM in computers. Those monstrous companies are looking for ways to restructure and are cutting back. There is no fear that the networks will go away but they will have to readjust to the new competitive environment."

Unlike Paramount, which has structured its sales to independent stations individually, Warner has signed a multi-year pact with the Television Consortium, a group of stations in 142 markets, and launched the Prime Time Entertainment Network Jan. 20.

Entertainment analysts are watching these new shows carefully.

Alan Gould of Dean Witter Reynolds said off-network, prime-time programming was the major buzz at the recent national television industry convention.

"With the success of 'Deep Space Nine' and 'Time Trax,' you have to question if the value of the networks has diminished," Gould said.