News

Styles New Deals to Add 18M-Plus Subs

6/11/2000 8:00 PM Eastern

Style will gain 18 million to 22 million subscribers, boosting its distribution to more than 25 million, as the result of extended or new affiliation deals with four major MSOs, officials said last week.

E! Networks has renegotiated carriage agreements with Time Warner Cable, Comcast Corp. and Adelphia Communications Corp. for Style, as well as doing an affiliation deal with AT & T Broadband for the one-and-a-half-year-old network. The pacts also cover carriage for the company's core channel, E! Entertainment Television.

As a result of the long-term agreements, which span eight to 10 years, fashion spinoff Style will basically quadruple its subscriber base, which is now 7 million households. Also, E!'s distribution will increase by 8 million to 10 million homes, taking it to more than 70 million subscribers.

In total, E! Networks will gain 30 million subscribers over the term of the agreements with the four MSOs, E! officials said.

Mindy Herman-who left pay-per-view distributor In Demand LLC to became president and CEO of E! Networks in March-said that once she got on board, she met with Time Warner, AT & T Broadband, Comcast and Adelphia to talk about their current carriage deals.

"We went back in and redid all of the deals, significantly altered the some of the terms and worked with the operators.to be sure we had a structure in place that made sense for the industry for the long term," Herman said.

She noted that cable operators are under "significant pressure" to keep programming costs down, adding, "We worked out a long-term deal that was sensitive to that."

But she declined to discuss license fees for Style and E!. She also declined to say whether E! was paying upfront launch fees to operators for Style.

When Style debuted in October 1998, officials said they would ante up cash launch fees, reportedly in the neighborhood of $6 per subscriber.

While Herman wouldn't talk about the deal points on the Style and E! renewals, the latest industry trend is for MSOs to seek long-term carriage deals with cable networks that lock in license fees, giving the operators predictability in terms of what their programming costs will be over the next decade.

Programmers also often give MSOs breaks on license fees on their established networks in order to secure distribution for new cable networks.

Two years ago, Comcast, the majority owner of E!, converted its Q2 cable network-an upscale version of QVC-to Style. At that time, Style picked up roughly 2 million Comcast homes that were switched out from Q2.

Last year, Style announced initial carriage agreements with Time Warner and Adelphia.

Style will get a combination of digital and analog carriage as part of its renegotiated or new carriage deals. Operators "want as much flexibility as possible," Herman said.

An AT & T Broadband spokeswoman declined to say how many homes the MSO will launch Style in. But she said there were analog and digital rights.

"AT & T remains committed to offering our customers a wide variety of entertainment programming, and we are pleased to expand our relationship with E! and to introduce Style to our lineup," AT & T Broadband executive vice president of programming Matt Bond said in a prepared statement.

"These networks capitalize on popular culture's increasing interest in fashion and style trends, in addition to news and information on the entertainment industry," he added.

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