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Will Cable Go After the Fox?

3/21/1999 7:00 PM Eastern

With the upfront selling season fast approaching, Fox
Broadcasting Co. is stirring things up with presentations to ad-agency buyers that aim to
deflate some of the so-called myths behind cable's recent ratings gains.

But even as it tries to keep more dollars from straying
from network TV, Fox is angering some cable operators with what's perceived as an
anti-cable presentation, which may make it difficult for its cable networks, such as Fox
Family Channel and FX, to increase distribution or get renewals.

"Certainly, that is going to impact our
relationship" with Fox's cable services, said Patty McCaskill, vice president of
programming and pay-per-view for Charter Communications.

"Anything on one side of the house does affect the
other side," she said. "We'll be monitoring the situation, and we'll
take appropriate action where needed."

In mounting its presentation, Fox decided not to wait any
longer for the "Big Four" broadcast-TV networks to form a new organization with
the mission of launching a unified anti-cable campaign.

Sources said in December that the idea was intended to
offset the Cabletelevision Advertising Bureau's trumpeting about cable's ratings
momentum and broadcast TV's ongoing erosion.

"The CAB's gotten an awful lot of ink
lately," said Jon Nesvig, Fox's president of ad sales, "and rather than
waiting to get that [entity] up and running, we figured that we'd get out there with
our own side of the story now."

CAB president and CEO Joseph Ostrow set out on his own Fox
hunt last Thursday, when he blasted Fox's various claims as "fallacious, untrue,
deceptive, patent bulls__t."

In offering "one untruth and deception after
another," he said, "The purpose is simple: They're trying to distract
[buyers from data indicating that their] viewership is falling off the cliff like
lemmings."

Likening the New York Yankees' 1998 championship
season to cable's growth, Ostrow said, "You can poke holes in the Yankees'
hitting, pitching, fielding and managing. But the reality is only one thing: They
won."

Nesvig said cable shouldn't be surprised at the thrust
of the pitch, which is entitled, "The Power of Network Television."

"I'm not sure that we have to sit there and take
a licking," he said. Fox won't surrender "in the face of the CAB's
pretty aggressive efforts in targeting broadcast," he added, and it won't say,
"'Oh Christ, you're right: We're dead.'"

Still, the Fox presentation struck some industry sources as
odd, since that network is among several that have recently begun aggressively pitching
cross-media ad-sales and promotion packages, directed mainly at kids' advertisers.

At Fox Family, a spokesman said some of its sales
executives had seen the presentation. But with president of ad sales Rick Sirvaitis on
vacation last week, no one else would comment.

Pam Burton, Prime Cable's director of marketing, said,
"That [presentation's thrust] tells me that Fox is getting desperate, [because]
cable is a force to be reckoned with … Share continues to go down on broadcast versus
the cable nets."

At Adelphia Communications Corp., Jack Olson, vice
president of its Media Partners ad-sales arm, said Fox TV's cable bashing won't
affect his local sales efforts.

"I'm not going to worry about a corporate
fight" that's more programming-related than sales-related, he added.

Among Fox's main points in its presentation:

• "Size does matter. In a fragmenting media
landscape, network TV has never been more important," for instance, in terms of its
unmatched effectiveness in reaching mass audiences.

• "The Big Four deliver more than one-half [53
percent] of all viewing [among adults 18 to 49 in primetime]" -- well ahead of the 28
percent from basic cable's amalgam of 42 measured networks from September 1998
through January 1999. Ostrow said the broadcasters are slipping among those very viewers
as cable gains.

• About one-half of cable's ratings growth comes
from the top 10 networks, led by ESPN's National Football League coverage and TBS
Superstation's theatricals. "Even cable's best programs fail to deliver an
average rating that's even close to network TV," Fox said.

• Wired cable penetration stood at 67.4 percent in
November, but significant percentages of the top 10 DMAs' homes still weren't
reached by cable. Ostrow called Fox's penetration data "out-and-out
deceit."

• In what Fox dubbed "the cable upscale-audience
myth," Fox said the top 10 cable programs among adults 18 to 49 are dominated by the
NFL, wrestling, Comedy Central's South Park, Turner Network Television
original films and TBS theatricals. South Park and TNT originals are the only
entertainment shows topping a 1.0 rating among adults 18 to 49, Fox contended. Ostrow said
Nielsen demographic data proved cable's upscale-demo strength.

• Only the broadcast networks can present advertisers
with big events that earn large ratings among the key adults 18-to-49 audience, which
dwarf cable's biggest events.

In last summer's upfront, cable tallied about $2.7
billion, including several hundred million dollars that were said to have switched away
from broadcast, cable-industry sources said.

Fox began its presentations "in earnest" last
week, with Nesvig expecting "eight to 10" agencies or clients to be reached just
by month's end.

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