The Hollywood Reporter -- This story first appeared in the Jan. 11 issue of The Hollywood Reporter magazine.
Nancy Tellem, who had been a consultant to CBS chief executive Leslie Moonves for nearly three years after stepping down as president of the CBS Network Television Entertainment Group in 2009, became entertainment and digital media president at Microsoft on Sept. 18. One of her primary mandates: to create a TV studio in Los Angeles during the next year, where she and her staff will make original content for the 40?million customers worldwide who subscribe to Xbox Live, which already features fare from Netflix, ESPN, HBO Go, Amazon Prime and other providers. Tellem, 58, a mother of three sons who is married to sports agent Arn Tellem &mdash and who spends what little free time she has bicycling, reading and doing yoga &mdash spoke with THR at her temporary office at Wasserman Media Group in Los Angeles.
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The Hollywood Reporter: Is it scary to move from traditional TV to a tech company?
Tellem: For me, it was a natural next step. I was always interested in where the next distribution platform was happening and was very engaged with talking to tech companies.
THR: Xbox Live already gives users access to tons of video. Why do you need original content?
Tellem: Incredible content really raises the brand &mdash look at Mad Men with AMC. So original programming gives us an opportunity to kind of brand the Xbox. And looking at the technology the Xbox console provides, we are really a bit ahead of the more traditional media companies in having the ability to develop and produce interactive content.
THR: What types of shows do you plan to make?
Tellem: We’re looking at all forms of content for every member of the family. So that certainly covers live events, reality, game shows, documentaries and scripted comedy or drama. We’ll cover it all. We’re figuring this out as we go. But we certainly intend to produce things with high production value, with the same breadth of storytelling that you see on traditional TV.
THR: Interactive TV hasn’t taken off yet. What are you going to do differently to make it popular?
Tellem: We’ve all tried to produce multiplatform programming, but the difficulty has been that you don’t have the technology to support it. This is where Microsoft and Xbox are in a unique position. The technology is there, not only for the audience that just wants to watch passively, but also for those who want to engage the content more, whether by mobile, tablet or on TV.
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THR: Will you be able to attract major TV talent to make shows for a tech company?
Tellem: I certainly hope so. I know that before my arrival, they were able to attract a certain level of great talent. I invite everyone to come and listen to what we want to do. There’s a great playground we have here.
THR: What agents and talent have you spoken with so far?
Tellem: I’m somewhat overwhelmed by the interest, but I can’t say. It’s a little too early.
THR: Have you made any major hires yet?
Tellem: Not yet. We’re obviously taking advantage of all the existing people we have in Seattle, but at the same time we want to build a top-notch staff in L.A. for what will certainly be a full-fledged production studio.
THR: Why did you leave CBS?
Tellem: It’s probably the toughest decision I’ve made in my career. I’m very, very close to Leslie and close to all the executives there. We’re like a wonderful family. I just felt that I had done the job, and hopefully I did it well, and there were new challenges I wanted to take on. I wanted to be a little less comfortable, and I was always so intrigued with where television was going.
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THR: What exactly did you do as an adviser to Moonves?
Tellem: I’ve always been interested in looking at the next generation of television. In the early days, I ran CBS.com before CBS acquired CNet, and I initiated the mobile strategy. So I’d try to embrace what’s on the horizon. I was also interested in the global production model, so I did a lot of that, going to places like India and exploring.
THR: Can you give me an example of a crisis at CBS when you were there and how you handled it?
Tellem: I don’t want to be specific, but there are situations where talent has personal issues and it’s like an athlete: Do you throw them out in the field if it hurts them but helps the team? Ultimately you have to think about the well-being of the talent. I guess I’m referring to the Charlie Sheen, Angus T. Jones type of situations. But among the executives, it should be a collaboration, and we should listen to different points of views to come to a conclusion we can live with while also protecting the show.
THR: How would you handle the controversy over Two and a Half Men star Jones’ plea for people to stop watching the show because it’s “filth”?
Tellem: I was just thinking this morning that it’s a good thing I’m not at CBS. Nina [Tassler, CBS Entertainment president] and Leslie and the Warner Bros. people are handling it appropriately. Who knows what motivates these things, but I think his apology was correct. We’re all blessed to be in this business.
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THR: Is any part of traditional TV in jeopardy because of advancing technologies?
Tellem: It’s certainly disruptive. We always compared ourselves with the music industry and said we had to be much more nimble and accepting of change. The TV industry has done just that.
THR: How does the industry combat DVRs and ad-skipping?
Tellem: With VOD and embracing the whole concept of giving consumers their content where and when they want it. And there have been studies &mdash and I do this also &mdash where I watch the commercials because I forget I’m watching a recorded show. Ratings aren’t reflecting what’s really happening. It’s interesting, though, that when you download something, you end up watching the commercials, because you’ve made the decision to watch it free with ads instead of paying for it without ads. Because of that proposition and the intimate relationship people have with their computers and tablets and such, people are accepting commercials and watching them more.
THR: What was your favorite CBS show with which you were involved?
Tellem: Oh my God. You know, it’s like, as Leslie would always say, “They’re all our children.” But obviously, the things that made a huge difference in turning around that network were shows like CSI and Survivor and, my gosh, Everybody Loves Raymond.
THR: What do you like to watch now on TV?
Tellem: I’m quite enthralled with Game of Thrones. I’ve been watching Newsroom a lot on HBO. I love Homeland, of course, because everyone does, and Modern Family. I hate to admit it, but I agreed with most of the Emmy Awards this year. I love television. I spent the last 25 years in it, you know?
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THR: Now that you’re at Microsoft, is there pressure to become a gamer?
Tellem: I love FIFA and I play Madden and golf games, and I think it’s due to the influence of my kids. I was aware of Halo, Call of Duty and the shooter games, but I didn’t play Halo until four days ago. It’s really amazing, but shooter games aren’t my cup of tea.
THR: Do you have a political problem with them?
Tellem: It’s funny. Like in television, we’re all fine with violence but not sex. The shooter games are much like procedural series, which I’ve never embraced. I don’t like blood.
Related article on THR.com:
Microsoft Hires Ex-CBS Exec Nancy Tellem To Run Entertainment
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