Black Entertainment Television (BET): Rags to Riches
Robert Johnson, born the ninth of ten children in Hickory, Mississippi, is a true rags-toriches success story. His father, Archie, chopped wood while his mother taught school,
and their search for a better life led them to Freeport, Illinois, a predominantly white
working-class neighborhood. Archie supplemented his factory jobs by operating his own
junkyard on the predominantly black east side of town. Edna Johnson got a job at
Burgess Battery, and although she eventually secured a job for her son Robert at the
battery firm, he knew it wasn't for him. (1)
Bobby Johnson showed an enterprising nature at an early age, delivering papers,
mowing lawns, and cleaning out tents at local fairs. At Freeport High School, Robert
was an honors student and was able to enter the University of Illinois upon graduation.
Virgil Hemphill, his freshman roommate, commented that "He was not overly slick,
overly smooth. He was kind of innocent and naive. His strength was being able to talk to
different types of people. I went to Freeport with him, and he could communicate with
the regular people and with the suit-and-tie people." (2)
Johnson did well at Illiniois, studying history, holding several work-study jobs, and
participating at Kappa Alpha Psi, a black fraternity. After graduation in 1968, Johnson
was admitted to Princeton University's Woodrow Wilson School of Public and
International Affairs, a two-year program with a full scholarship plus expenses.
However, he dropped out after the first semester to marry his college sweetheart, Sheila
Crump, a former cheerleader and gifted violinist. He eventually returned to Princeton to
earn his masters degree in public administration in 1972. (3)
He moved on to Washington to work at the Corporation for Public Broadcasting,
followed by the Washington Urban League, where the director, Sterling Tucker, was
leading the struggle for District home rule. Tucker appreciated Johnson's ability to think
both "micro-ly and macro-ly" while still "thinking like a visionary" in pursuing larger goals.
(4) Having moved on to the Congressional Black Caucus, Johnson became impressed
with the possibilities for black power that lay in television and cable in particular. In
1976, he moved on to work as a lobbyist for the National Cable Television Association
(NCTA), where he gained invaluable insight into the cable industry.
At the NCTA's 1979 convention, Johnson met Bob Rosencrans, president of UAColumbia Cablevision. While Bob Johnson had a strong idea in providing cable
programming to minority audiences, he had no satellite time; Rosencrans owned some
unused slots on one of the three cable TV satellites, and was looking for programs to
support his local franchises. "I just said, "Bob, you're on. Let's go.' I don't think we even
charged him. We knew he couldn't afford much, and for us, it was a plus because it
gave us more ammunition to sell cable. The industry was not attracting minority
customers." (5)
With $15,000 from a consulting contract that he received upon his departure from
NCTA, Robert Johnson launched Black Entertainment Television (BET) at 11 P.M. on
January 8, 1980. The first BET show was a 1974 African safari movie, "Visit to a Chief's
Son". Initially, BET aired for only two hours on Friday nights. The first show bounced off
an RCA satellite and into 3.8 million homes served by Rosencran's franchises. Johnson
received his first crucial financing from John Malone of TCI in the form of a $380,000
loan plus $120,000 to purchase 20 percent of BET. (6)
Johnson's original staff at BET included Vivian Goodier, who came over from NCTA and
assisted Johnson with the original BET business plan. In addition, Johnson hired his
secretary, Carol Coody, and his older sister Polly. The BET staff approached cable
companies, subscribers, and others at industry shows, using a little 10-by-10 booth with
a collapsible table and display. After a decade of learning the finer points of cable
industry, Johnson went public with BET and raised $70 million.
However, this did not occur without controversy. In 1992, Goodier, Coody, and Polly
Johnson all sued Robert Johnson, claiming that he had promised them shares of the
company in exchange for their hard work. These claims were eventually settled, with
$900,000 each going to Coody and Polly and more than $2 million for Goodier, who
claimed a personal relationship with Bob Johnson. (7)
To raise capital in the 1980s, Johnson sold off pieces of BET to Time Inc. and Taft
Broadcasting for over $10 million. However, controversy over programming has
followed Johnson from the start, with his heavy reliance on music videos (60 percent of
total programming), gospel and religious programs, infomercials, and reruns of older
shows such as Sanford and Son and "227." (8) Lydia Cole, BET vice-president for
programming, does not let her young daughters watch BET, claiming "We don't watch
BET. I'm concerned about the images portrayed of young girls." (9)
Johnson lives on a $4.3 million, 133-acre horse farm in Virginia, and while he supports a
large number of black causes, he declines to be identified as a role model. "I don't want
to be seen as a hero to younger people. I want to be seen as a good solid business guy
who goes out and does a job, and the job is to build a business ... What are my
responsibilities to black people at large? If I help my family get over and deal with the
problems they might confront, then I have achieved that one goal that is my
responsibility to society at large." (10)
Although Johnson professes to want to produce original programming, he continues to
suffer from low fees compared to other cable offerings. Early in BET's existence,
Johnson was earning only 2 cents per subscriber, while major networks such as TNT
and USA were getting 15 to 20 cents. Johnson has won the battle for higher fees, which
jumped from 2.5 cents to 5 cents in 1989, and eventually to 15.5 cents in the next five
years. BET is watched by 52 million households, 142,000 in any given minute, and
ranks nineteenth among 28 cable channels tracked by Nielsen data. (11) Subscriber
fees generated $50.4 million in 1996, compared to $60 million through infomercials and
advertising. (12)
The Future
Robert Johnson continues to have grand plans for BET, seeking to turn the enterprise
into what marketers call an umbrella brand. (13) The firm publishes two national
magazines that reach 250,000 readers: Young Sisters and Brothers for teens and
Emerge for affluent adults, and it has interests in film production, electronic retailing,
and radio. (14) The first BET SoundStage restaurant opened in suburban Washington,
with another opening in Disney World in Orlando. With Hilton as a partner, Johnson
hopes to open a casino in Las Vegas, Nevada. (15)
Johnson wants to capture some of the black consumers' disposable income - valued at
$425 billion annually. To do this, he partners primarily with such big names as Disney,
Hilton, Blockbuster, Microsoft and others. "You simply cannot get big anymore by being
100 percent black-owned anything " Johnson claims. (16) Reaching 98 percent of all
black cable homes, his BET cable station provides the perfect medium to influence this
increasingly affluent black audience.
In September 1997, Delano E. Lewis, a director of BET, was appointed to serve as a
Special Independent Committee of the BET Board of Directors to consider and make
recommendations to the Board concerning a September 10, 1997, proposal by Robert
L. Johnson and TCI's Liberty Media Group to purchase all of the outstanding shares of
BET common stock not already owned by them for a price of $48 per share. In early
1998, Lewis reported that the $48 per share offer was inadequate. (17)
In his latest venture, Johnson hopes to launch an Internet web portal aimed at AfricanAmericans and an urban audience. With financing assistance from Microsoft, Liberty
Media Group, News America Inc. and USA Networks Inc., BET will invest $35 million,
the largest on-line investment ever aimed at African-Americans. (18).
Black Entertainment Television (BET): Rags to Riches: Review Questions
1. How does motivation influence performance and is this evident in BET?
2. What role does reinforcement play in motivation?
3. What is happening in the area of motivation and compensation?
Reference:
1. Zagorin, Adam. "BET's Too Hot a Property: A Founder Wants to Buy Back His
Firm; The Shareholders Want More Money," Time, October 20, 1997: 80.
2. Perl, Peter. "His Way," The Washington Post, December 14, 1997, (Magazine
Section): W08.
3. Ibid.
4. Ibid.
5. Ibid.
6. Ibid.
7. Ibid.
8. Ibid.
9. Ibid.
10. Ibid.
11. Zagorin, op. cit., p. 80.
12. Perl, op. cit., p. W08.
13. Zagorin, op. cit., p. 80.
14. "Black Entertainment Television," Hoover's Company Capsule, Hoover's Inc.
http://www.pathfinder.com/money/hoovers/corpdirectoryplus/b/btv.html.
15. Zagorin, op. cit., p. W08.
16. Perl, op. cit., p. 80.
17. Special Independent Committee of BET Holdings, Inc.Board of Directors Has
Determined That $48.00 Offer for Outstanding Shares Is Not Adequate.
http://biz.yahoo.com/prnews/980123/dc_bet_hol_1.html
18. "BET Plans Internet Portal", CNNfn.com, August 12, 1999.