Local Avails Issue: TCIs Latest Idea

12/20/1998 7:00 PM Eastern

In MSOs' ongoing search for ways to improve their
limited local-avails situation, Jerry Machovina, executive vice president of ad sales at
Tele-Communications Inc.'s TCI Communications Inc., is developing a new
"revenue-sharing plan."

"We have a finite amount of inventory," Machovina
said during a panel session at the Western Show earlier this month, and the cable networks
are reluctant to hand over more local time than they already do. "We're trying
to politely address that [situation]," he conceded, but "they're tired of
hearing about it."

Describing his newest idea in broad strokes, he referred to
"some type of a local-switching business plan, where [networks] can take one of their
avails and, in effect, we could provide a switch so that they can have some type of a
network advertiser/co-op spot capability."

Although that proposal "might scare" rep firms
like National Cable Communications -- in which TCI recently became a partner -- Machovina
said, "There's a lot of upside potential in using the technologies that we have
to maximize our advertising opportunities."

Machovina was unreachable last week to elaborate on the
logistics of his plan, as well as on the proposed revenue-sharing breakdown.

He contrasted the average two minutes per hour given up by
most insertable networks to the 15 to 20 minutes per hour that the average broadcast
station can sell. While operators could always hike ad rates as another way to maximize
their revenues, he said, "That's the last thing that we want to do."

Turning to other future advertising opportunities,
Machovina said in a recent interview:

• "Several" more national clients are in the
final stages of negotiations to follow Kraft Foods into addressable advertising. Although
household addressability is not yet part of Kraft's current seven-market TCI buy, the
parties involved said earlier that it was the ultimate objective, perhaps within two

• TCI's plan for packaging cable networks
thematically and demographically has been pushed back. Machovina - who first said in the
spring of 1997 that this proposed ad-sales test would involve different teams selling
networks in packages, the way that newspapers do with women's and financial sections
-- now describes the idea as "a next-generation approach, the next evolution of our

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