News

Programmers Cite Pros and Cons of Digital Era

3/15/1998 7:00 PM Eastern

New York -- Some of cable's top brass outlined the
upside and downside potential of the coming digital cable era during a programmers'
panel at the Cabletelevision Advertising Bureau's conference here earlier this month.

Digital tiers represent a new outlet for "our
high-quality shows," said John Hendricks, chairman and CEO of Discovery
Communications Inc., in indicating one opportunity. Such new channels will appeal to those
viewers who willingly pay today for Discovery Channel's off-net videos, he added.

New digital channels can also be brand extensions of core
networks. "We need to be there early and basically plant the flag" in the
"mega-channel" digital realm, said Mark Rosenthal, MTV Networks' president
and chief operating officer. Increasing clout via cross-promotion among one's various
networks also is important, said Steve Heyer, president and COO of Turner Broadcasting
System Inc. So is having brands that are "ubiquitous" via movies and
licensed-merchandise spinoffs, Rosenthal said.

Companies with few networks will find it increasingly hard
to compete or even to survive in the future, Hendricks warned.

The possible downside to those spinoffs, said Nick
Davatzes, president and CEO of A&E Television Networks, is that, "if our digital
channels don't meet the quality of our analog channels," programmers will shed
digital tears. Heyer agreed that it will be "a scary future" if networks are
merely "indifferent deliverers" of programming for digital.

Moreover, there's the danger of increased cable
fragmentation from all of those new digital channels, Hendricks cautioned.

In the current analog environment, the cable executives
told the mostly ad-agency people in their CAB audience that for advertisers that are used
to buying mass audiences with such one-shot events as the Super Bowl and the Oscars,
cable, too, can be a "big-event programming" option.

In fact, Heyer said, "you are seeing [that strategy]
in cable right now." TBS Superstation, for instance, has increased its buying of
theatrical movie rights predating their Big 4 network windows, he said, citing as an
example Dumb and Dumber, which outrated three broadcast networks when it aired last
fall.

Rosenthal said MTVN offers such in-house events as
MTV's Video Music Awards and VH1's Fashion Awards, while Hendricks cited the
Eco-Challenge in October as Discovery's version of a big event.

Being a property "owner," rather than a
"renter" of such fare, allows a network freedom to offer more than a mere media
buy, Rosenthal added, and it gives the network more control over its financial destiny
than, say, "renting" the National Football League rights would, Heyer added.

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