CMT Makes Fuss Over Switch-Out

4/19/1998 8:00 PM Eastern

Country Music Television got dumped in Columbus, Ohio, and,
like a spurned lover in a country-and-western song, it's fighting back.

Even though the CBS Cable-owned network has little hope of
being restored on the Coaxial Communications system there, CMT officials are turning up
the heat on the 125,000-subscriber MSO, which is based in Columbus. But the
scorched-earth tactics could alienate other operators, and it minimizes the chance of
Coaxial adding other CBS Cable networks, like CBS Eye on People.

CMT is co-sponsoring a PrimeStar sign-up effort in
Columbus, helping to subsidize the direct-broadcast satellite service's offer of free
installation and one month's free service to Coaxial customers who produce the past
month's cable bill. The network is prepared to sign up "hundreds" of
PrimeStar customers, CBS Cable spokeswoman Cheryl Daly said. A Coaxial official, who said
he saw the network's "marketing plan," said CMT's goal is 4,000

CMT hopes that the publicity also warns other MSOs that the
network will "defend our business," when necessary, as CMT's senior vice
president of affiliate relations, Steve Soule, put it last week. However, CMT officials
said Columbus was an unusual situation, and it might not respond so aggressively

"We just feel that this is something that we had to do
in this market, to support the CMT viewers and to show the industry the extent to which we
would go to defend our franchise," Daly said.

CMT has run newspaper ads in Columbus, attacking Coaxial
for replacing it with Jones International Inc.'s Great American Country, another
country-video channel, March 31, without giving advance word to subscribers. One ad that
incensed Coaxial officials said that the system "did a bait-and-switch," with
CMT as the bait, and "you got the switch." Another called Coaxial

CMT's sister network, The Nashville Network, used
similar ads to drum up support in Tulsa, Okla., and Houston, after Tele-Communications
Inc. systems dropped TNN as part of massive channel changes in that MSO's systems a
year-and-a-half ago. Other networks in various TCI markets did the same, including MTV:
Music Television and VH1. Most of the dropped networks were later restored, including TNN.

But CMT has gone further in Columbus with the PrimeStar
move. While Coaxial said last week that no one had called to disconnect their service over
the CMT drop, Daly said people have lined up at CMT trucks at Columbus malls, and
PrimeStar was signing up new subscribers there last week.

Daly said CMT responded so forcefully because
Coaxial's Columbus system, with about 92,000 subscribers, is the biggest market ever
to drop CMT, which has about 42 million U.S. cable subscribers versus GAC's 3
million. Coaxial's smaller southern Ohio system also made the switch.

And Columbus is a healthy country-and-western market,
supporting two radio stations devoted to the genre and ranking 15th in terms of
country-record sales, Daly said. CMT has done several promotions in Columbus over the last
six years, including sponsoring concerts. And Coaxial's headquarters are in Columbus,
so the MSO's executives are sure to see and hear the ads and the responses.

Greg Graff, Coaxial's senior vice president of
marketing, programming and advertising, said CMT also figured that it could safely pick on
a top 50 MSO, but it wouldn't want to alienate a TCI or a Time Warner Cable.

Daly responded that CMT and TNN have taken on TCI before,
but she also noted that CMT aligned with PrimeStar, and not with Coaxial overbuilder
Ameritech New Media (which carries CMT), in part because Ameritech Corp.'s cable arm
competes against Time Warner and other CMT affiliates in Ohio.

Why did Coaxial add GAC and drop CMT? Graff said the
decision was based partly on quality and partly on economics. GAC offered a launch fee,
and it provides more ad avails to affiliates than CMT does, he said. GAC also runs fewer
commercials, which could prove popular with subscribers, he added.

"Financially, GAC had a better offer," Graff
said. "But it was not so much better as to completely be the determining

Coaxial felt that GAC was the better service, and one that
it could promote as a competitive advantage against ANM, he said.

Graff and CMT officials both said CMT made an effort to at
least come close to GAC's affiliate terms. Graff said CMT offered to pay a
"relaunch fee," but Daly said the network did not offer to make any upfront
payments. Daly and Soule both said CMT offered a financial package that was better for
Coaxial than GAC's over time, but not in the short term.

GAC vice president and general manager Jeff Wayne would not
discuss the network's financial arrangements with Coaxial.

"[Coaxial officials] liked our deal, and they liked
our product, and they made the switch for all of the right reasons," Wayne said last

An executive at another MSO, who asked not to be identified
because of ongoing negotiations with the networks, said CMT was vulnerable to being
switched out at a time when some networks are trying to push through rate increases of 15
percent to 20 percent, or more.

The executive's MSO is thinking about making the
switch to GAC, too, because it can save money and tell subscribers that the reason for the
switch is mainly because GAC runs fewer commercials. "There are more music
videos" on GAC, the executive said.

Graff said Coaxial received around 15 calls per day
complaining about the switch after the radio and print ads appeared the week of April 6.
Last Monday, he said, there were six calls, and five praised GAC.

"If [CMT promoters] were not in this market doing
this, there would not be a peep," Graff added.

Coaxial did not provide 30 days' advance notice of the

change-out, which is required, according to a letter to Coaxial from the city's
administrator of the division of information services/telecommunications. That official
did not return calls last week.

Graff said such notice wasn't required because GAC
took CMT's channel number and the switch was within the same format. Notifying
subscribers would have been more confusing than useful, he said.

Graff said that until recently, Coaxial hadn't ruled
out adding Eye on People, another CBS Cable network. But that's not likely to happen
now, he added.

"A lot of this business is financial, and a lot of it
is relationships," he said, adding that TNN is not in danger of being dropped.

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