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This Just In

By Staff -- Multichannel News, 7/31/2006

Items:
AOL Site Jumps Into Paid Web-Video Fray
Time Warner, NFL Network Butt Heads Over Carriage Deal
Court TV Ad-Sales Chief Adjourns From Network
Sidebars:
Cable Nets Step Up To Bat in Upfront

AOL Site Jumps Into Paid Web-Video Fray

Dulles, Va. — Offering both paid and free downloads of TV shows, AOL plans to announce today its most ambitious video venture yet. Its new AOL Video portal — launching Aug. 4 — will contain content from MTV Networks, A&E Television Networks and other cable programmers, in addition to free, ad-supported content.

The Web site, www.aolvideo.com, is AOL’s first foray into the paid download business, which is currently dominated by Apple Computer Inc.’s iTunes Music Store. Like iTunes, AOL said it will charge $1.99 per episode for full-length Comedy Central series including Chappelle’s Show, South Park, Mind of Mencia; Nickeolodeon’s SpongeBob SquarePants and Zoey 101; MTV: Music Television’s Laguna Beach and Punk’d; and other series. MTV’s entire stable of cable networks is supplying content for the venture, as is A&E’s flagship network, and sister services The Biography Channel and The History Channel. The A&E content, including Dog the Bounty Hunter, is also priced at $1.99 per episode.

AOL described its video portal launching as a “beta” version. The company said the video content will be run from an on-screen interactive program guide that will include more than 45 video-on-demand channels. Included will be paid content and free content from Turner Network Television and TBS, including TNT original movies. Also coming is other free content from television and Web producers.

Syndicated shows from Turner such as TBS’s Seinfeld are not included in the offering. AOL said it will add a new search engine to the video portal, which will deliver results from Web sites such as YouTube.com, Yahoo, Google Video, iFilm and AtomFilms.

Time Warner, NFL Network Butt Heads Over Carriage Deal

New York — Time Warner Cable and the NFL Network are strapping on their respective helmets in anticipation of a nasty carriage dispute.

Time Warner Cable may punt the NFL Network away from systems owned by Adelphia Communications Corp. it is acquiring, including those in such National Football League markets as Buffalo, N.Y., Cleveland and Dallas.

In response, the network, which has added an eight-game, late-season primetime package, is preparing a multimillion-dollar ad campaign to run throughout the pro football season if necessary against Time Warner, Cablevision Systems Corp., Bright House Networks and other cable operators that are not carrying the 41 million-subscriber channel.

Time Warner Cable is considering dropping NFL Network from systems in Buffalo, N.Y., Cleveland, Los Angeles, the Carolinas, and Maine that could come as early as Aug. 1, following the expected closing today (July 31) of the Time Warner/Comcast Corp. purchase of Adelphia.

Time Warner, which doesn’t have a corporate deal with the service, last Wednesday placed ads in newspapers within those Adelphia markets, saying that NFL Network could be one of several networks either added or dropped with the ownership change.

Time Warner officials said no decisions have been made regarding NFL Network and the operator remains in “active discussions” with the network to secure a carriage deal.

Meanwhile, NFL Network will run TV, radio and print ads — as early as this week — identifying operators that are currently not carrying the service. The network was expected to run ads this past Sunday in newspapers reaching NFL markets, including Green Bay, Wisc. (Time Warner) and Tampa, Fla. (Bright House).

NFL Network spokesman Seth Palansky said the service is prepared to execute a multimedia marketing blitz for several months: “We’re prepared to go as long as it takes, but we hope it’s only a one-week period,” he said.

The ads will not target MSOs that carry the network, but have yet to sign up for the network’s new rate card. That card includes the $300 million, eight-game package, plus replays of select Sunday contests. Thus far, satellite services EchoStar Communications Corp. and DirecTV Inc. — as well as a number of small and midsized operators — have come off the bench to sign the new deals. Distributors say network new licensing fees range between 50 cents to 75 cents — a substantial increase over its previous rate card, which called for between 20 and 25 cents per month.

Court TV Ad-Sales Chief Adjourns From Network

New York — While the cable ad-sales upfront auction continues, another round of job cuts at Court TV following its acquisition by Time Warner Inc. claimed the legal channel’s top advertising-sales executive, Charlie Collier, and several of his staff members.

Collier, the network’s executive vice president and general manager of ad sales, was one of about one-dozen staffers, including workers in the human-resources and legal departments, whose jobs were eliminated Thursday.

Individuals close to Court TV say that Collier is expected to remain at his post at Court through mid-August and is in line to become the general manager of AMC. That post has been vacant since June 2003 when 14 Cablevision Systems Corp. executives were let go in the wake of a probe into accounting irregularities at the company.

Officials at AMC parent Rainbow Media declined to comment. Collier could not be reached for comment.

Several people within Court TV and Time Warner’s Turner Broadcasting System said Court TV’s entire ad-sales department, said to be about 50 people, had been eliminated. As many as 35 members of that group could be retained and wind up working under Linda Yaccarino, executive vice president/general manager of Turner Entertainment Advertising Sales.

Coupled with departures last month in affiliate relations, corporate communications, finance and accounting, more than 60 Court TV workers have lost their positions since Time Warner bought the half of the service — which had more than 400 employees before its integration — it didn’t own from Liberty Media in May for $735 million.

 

Cable Nets Step Up To Bat in Upfront

The dog days of summer approach and cable still has a lot of work to do in wrapping up a languishing upfront advertising marketplace.

After almost six weeks of protracted negotiations, ABC closed the broadcast side of the annual Madison Avenue bazaar just before the Fourth of July weekend. The upfront was slowed out of the gate by the Alphabet Network’s initial insistence that live-plus-seven-day viewing be the measurement metric of choice and then tough negotiating over prices in which media buyers managed to keep vendor CPM gains to a minimum.

The upshot: the five broadcast networks rang up just under $9 billion, down 1% from $9.1 billion the prior year. Moreover, CPM (cost per 1000 viewers) pricing increases topped out at 2% and 3% for Fox and ABC. However, media buyers dispute those ratios and therein lies a problem for cable.

“Some broadcasters got 1% to 2%. We held the line there,” said an executive at a media buying agency. “The best cable is going to get is flat or 1%.”

Given that mindset on the buying side, moves by some clients to hold more dollars for the scatter market, and the fact that medium didn’t take center stage until after the Independence Day holiday, the cable market is playing catch up in terms of chasing dollars and closing deals.

Merrill Lynch media analyst Jessica Reif Cohen reduced her upfront estimate for cable to a 3% increase to $7.3 billion from an earlier forecast of a 5% advance.

Some industry watchers believe that MTV Networks has written up to 90% of its upfront business, and that Turner Network Television and TBS, could have closed on as much as 70%-75%, with the latter’s CPMs either flat or edging up 1%.

Elsewhere, sources say that A&E Network is up over last year’s upfront levels, driven by solid sales against syndicated acquisitions The Sopranos and CSI: Miami.

All of the aforementioned cable programmers declined to comment about their upfront status.

Elsewhere, executive vice president of advertising sales Steve Gigliotti reported that the Scripps Networks, whose stable includes Food Network, Home & Garden Television and Do It Yourself, has “done some deals and is almost completely registered” with the rest of the agencies. “We’re just beginning to negotiate those plans. We’re extremely pleased with where we are.”

Hallmark Channel executive vice president of ad sales Bill Abbott said his team has adhered to an upfront game plan to “bring up pricing” on the network, which he maintains is below market standards, particularly given its family-friendly fare and ratings ascent.

Abbott said Hallmark had done about “one-quarter of its upfront business” by last Friday morning, adding that the remainder is “ready to close. It could all come in a three-day spurt. It will be an August, rather than a June, upfront.”

—Mike Reynolds

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