Earlier this week, Scientology TV began broadcasting on the DirecTV network. Tony Ortega’s story the day before the launch, explaining the apps and channels involved is here, and Tony’s review of the first slug of programming the day after the premiere is here.
Here, we’ll look at the strategic imperative driving Scientology leader David Miscavige to begin to broadcast to generally accessible public, which we think is a case of doing the best job he can in playing a terrible hand. We suspect that some percentage of top donors are starting to wonder about the efficacy of the expensive Ideal Org strategy. In particular, they might be starting to wonder why there are so few new members in these opulent facilities, which was the justification for building them in the first place.
We predicted a few months ago that Scientology Media Productions would not begin broadcasting anytime soon, because of the potential for blowback and further tarnishing of the already toxic Scientology brand. We still believe all the reasons we cited in that post arguing against broadcast operations are still valid, and we now look at why Scientology management might have felt it necessary to go forward with a broadcast plan even though it will likely backfire.
The Failure of the Ideal Org Strategy
For more than a decade, Scientology’s main fundraising focus has been on opening a series of opulent “Ideal Org” buildings to upgrade existing Scientology facilities. These construction projects typically take years, with heavy fundraising to procure a building, then another extensive fundraising campaign to renovate it. The facility opens but Scientology opponents driving by the new facilities often share pictures of empty parking lots, empty course rooms and a couple of handfuls of staff scuttling around through the echoingly empty halls.
The goal of these facilities is to improve the image of Scientology and get people flocking in to fuel the imaginary wave of expansion that Miscavige frequently refers to in his self-congratulatory presentations at major fundraising events. And in that, they’ve failed utterly.
However, we think Miscavige has been able to keep the fundraising scheme rolling along because he has been building facilities in towns like Portland, Salt Lake City, Perth and other towns that don’t have a rich Scientology presence. It’s relatively unlikely that the large donors funding much of Scientology’s capital raises will visit many of these facilities and will thus see how empty they really are.
We believe this is changing. It appears that fundraising within local areas is no longer sufficient to build an Ideal Org without outside help. In other words, the donor base appears to be nearly tapped out. As we detailed in a recent blog post, the Orlando Ideal Org, which is now in process, bought the building on the cheap in a sharp departure from the pattern of buying relatively prominent properties. Though there’s no clear evidence for this, we suspect that the Ideal Org in the San Fernando Valley, the largest concentration of Scientologists in the world, needed help from Headquarters to get over the hump after a decade of fundraising. We know from financial statements published under New Zealand tax laws that the Auckland Ideal Org was purchased with an NZ$10,000,000 loan from International management.
Along with the difficulty of raising money, we think one Ideal Org in particular may be revealing to even the most die-hard members that Scientology is not able to attract new members. The Valley Org serves approximately 1,500-2,000 Scientologists (roughly equal to the Scientology public in Clearwater) in a portion of LA that contains about 1.8 million potential members. Because a large number of members, mostly longtime loyalists, are filtering through the Valley org frequently, they will have to notice that there are few new people in the course rooms. They know that the Valley is a large organization, and are far more likely to wonder why there’s no expansion here than if they were located in Albuquerque or Orlando.
New Fundraising Track: More Centralized Facilities
Perhaps the most successful fundraising campaign in the history of Scientology was the quest to build the new “Flag” building. It appears to have cost approximately $40 million to $50 million, but the cult appears to have raised at least $200 million for construction, as estimated by adding up the minimum donation amounts to achieve various “status levels” and to receive trophies for surrendering the cash. Scientology thus pocketed at least $150 million for its fundraising prowess.
After finally opening the Flag building in 2013, 15 years after the groundbreaking ceremony, David Miscavige announced in late 2014 campaigns to raise money for “L. Ron Hubbard Hall,” an auditorium in Clearwater to be located next to the Flag complex, and for a similar hall in Los Angeles. Neither place is exactly hurting for auditorium space. Los Angeles has dozens of facilities with seating for up to 20,000 within a handful of miles of Scientology’s “Pac Base” complex in Hollywood. Fundraising appears to be anemic for these buildings, and cult e-mail brochures don’t seem to emphasize this.
In early 2016, Leah Remini’s “Scientology the Aftermath” show premiered, with detailed descriptions of abusive practices on the part of the organization and its management. Its premiere was the highest rated single episode in A&E’s history. Only a couple of months after the show premiered, Scientology bought the KCET TV studio complex in Hollywood, for $45 million and began renovations. The building was soon dedicated as “Scientology Media Productions” (SMP), though programming did not appear for over a year.
The Pressure to Go on Offense
We believe the timing of the purchase of the KCET studios so soon after the premier of Leah’s show is no accident. Particularly telling is that the cult did not engage in a drawn-out multi-year fundraising campaign as they’ve done with most other buildings. That’s especially interesting given the price — at $45 million for the building shell plus some (probably older) equipment plus a cost of renovations and new state-of-the-art equipment that could add another $30 million, the Scientology Media Productions could be the single most expensive (in cost, not in amount raised from members) Scientology facility ever.
While the cult has enough reserves to afford to do the project without significantly affecting its financial position, this is a massive investment in a building, signifying that the issue driving its purchase is extremely important. But what is that purpose? We’d argue that it’s not about revenue. Scientology can’t raise prices for videos made at that facility that replace earlier videos filled with members who have left. And the cult won’t move to a pay-per-view model, since revenue from that would be but a sliver of the revenue from selling auditing “intensives” via high-pressure in-person sales tactics.
Scientology’s response to Leah Remini’s show has been comically lame, via a handful of embarrassing smear sites and by categorically denying any of the conduct in the programs, a fairly non-credible strategy given the number of independent reports of misconduct. We suspect that management fabricated the excuse of not having a broadcast platform to counter the “entheta.” But now that the facility is open, Scientology management has run out of excuses for not going on the offensive.
Featuring… David Miscavige
Scientology supremo David Miscavige hasn’t been seen in a broadcast setting in over 25 years, after the disastrous Nightline interview, which won an Emmy for capturing Miscavige’s inability to answer simple questions about the organization.
Yet Scientology TV led off with a brief intro from Miscavige. We’d argue that this is a reflection of an unwinnable strategic position, not a moment of hubris from the cult’s “ecclesiastical leader.”
Miscavige has absolutely nothing to offer a potential Scientology recruit. As Margaret Singer’s Cults in Our Midst book makes clear, most cult recruits are in their late teens or early 20s (or, increasingly, are children raised in the group). About half of cult members are recruited while in college. Miscavige is nearly 60. In the video, he’s featured wearing a highly tailored business suit, an increasingly anachronistic costume, and he’s highly made up and rehearsed, emanating the sort of insincerity and polish that is anathema to Millennials. Nobody in the prime cult age demographic (and perhaps few in any other group) are going to see Miscavige as someone they want to be like. And some aspirational quality is critical in cult recruiting.
The remainder of Monday night’s programming suite will similarly do little to spur recruitment. Focusing on the (nonexistent) successes in the black community (featuring a Nation of Islam official) and in Colombia will scarcely burnish Scientology’s reputation for making a difference in the world. We find the “Meet a Scientologist” show to be amusing — it practically screams a defensive move. The segment might as well have been entitled, “See, We’re Not all Moonbats!” Somehow, I can’t imagine other religious broadcasters doing similar shows. Why would someone need to watch “Meet a Presbyterian”?
Fundamentally, we think employing Miscavige as the cult’s face to the outside world is an admission of failure. The cult hasn’t had a functioning press organization in years. Spokesperson Ben Shaw in Clearwater is only used for local press interactions, and doesn’t appear to be able to do more than issue formulaic statements and denials of allegations he’s asked about. Monique Yingling, the high-powered outside attorney that many think functions as Miscavige’s most important consigliere, embarrassed herself in 2017 at the Clearwater City Council hearings over the land deal with the Aquarium and in the January 2017 interview with ABC’s “20/20” show.
And lurking behind the specter of more recent failures is the risk of allowing someone else to become the “face of Scientology” to members as Flag boss Debbie Cook did; her widely publicized 2012 e-mail critical of the cult and the resulting PR disaster convinced many to leave. Miscavige simply can’t afford this, as an astute commenter pointed out on Tony’s blog.
There simply isn’t a deep bench of management talent, as all those who have had the ability to function in the outside world have either been disappeared in the “Hole” or have left the cult or otherwise been neutralized. There is literally no one left who David Miscavige can trust to carry the word about Scientology to the outside world, or even to his largest donors. Hardly the sign of an organization in growth mode, where there is a burgeoning bench of developing management talent who can jump into the breach and make things happen.
But the real problem with Miscavige feeling the need to become the public face of the cult lies in the future, not in the present. That’s because he’s now tied to the success or failure of Scientology TV. We know from talking to many ex’s, including several who were in for decades, that few rank-and-file members know much about the internal workings of the Scientology organization beyond their interactions with a fairly small number of staff at Flag or their local org. Thus, publicly firing some executive as a scapegoat for a failed media campaign would do nothing to reassure members that management is on top of things.
The only possible scapegoat for the failure of this media campaign to either respond proactively to Leah’s show (potentially under consideration for a third season) or to get “fresh meat” in the door thus becomes Miscavige himself. In other words, he’s been forced through a narrowing set of circumstances to bet his legitimacy as the leader of the cult on this media campaign, a first in the history of the cult. And it’s a bet that he may very well not be able to win, even if he plays the hand he’s been dealt magnificently well.
Revised Thinking on the Economics of Scientology TV
DirecTV reaches about 20 million subscribers, roughly 20% of the slightly less than 100 million pay TV households in the US.
The programming will be available to DirecTV subscribers via their app and also via Scientology’s app, which will obviously raise questions about what the cult will do with personal information it gains, particularly on non-members. Techniques are well understood for phone app vendors to identify customers off-line and begin to solicit them, as well as through targeted but anonymous online ads.
We don’t think Scientology will generate enough incremental interest to be able to monetize any identifiable subscriber information effectively. We’d expect several dozen new recruits at most; cult claims that its facilities were immediately flooded with “fresh meat” within minutes of the first signal over the airwaves are not credible. Those several dozen recruits, with a lifetime customer value of perhaps $200,000 apiece for those who continue as Scientologists past the first year, won’t come close to paying for the channel rental fees that Scientology is paying.
We estimate those channel rental fees at around $2 million per year, on a back-of-the-envelope basis. Unnamed experts quoted in an article in The Daily Beast put the figure at around $4 million a year. Add a handful of millions for new content and you get a number of $7 million to $10 million a year for this. The cult can continue to foot the bill for this indefinitely, as we expect that they’ll remain profitable even with this extra overhead.
Because the aim of this program appears to be to appeal to existing members, unfortunately, there’s little to no chance that the cult can slash this expense if it doesn’t work out the way that it could if this media campaign was all about new member recruitment. The fact that the cult feels that they must undertake a perpetual obligation of this sort suggests that it feels it has few alternatives to keep members loyal other than attempting to bolster membership, an area of notable failure for the last 10-15 years, and to respond to Leah, in a way that aggressively takes the battle to her.
We continue to believe that the release of programming such as a Hubbard biopic that would appeal to existing members will be more late-night talk show joke fodder, which may in turn cause existing members to demand more aggressive “confront and shatter” of those making jokes at its expense, pulling the cult into a death spiral of negative PR that it can’t possibly escape. Only time will tell if this happens; if it does, that’s an interesting tell that Miscavige is being forced to listen more closely to his large donors than in the past.