Agency Execs: Original Shows Drive Rates

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Atlanta -- Basic-cable-network growth is on a fast track,
and first-run programming is the engine powering that growth, asserted a group of cable
and ad-agency executives at the National Show here.

By the time fall arrives, basic cable's Nielsen Media
Research household ratings will surpass TV's "Big 3" broadcast networks,
and by fall 1999, basic will beat out the "Big 4," said Tim Brooks, senior vice
president of research at USA Networks.

Howard Nass, senior vice president at TN Media Inc., said
his agency's research indicated that cable will surpass the TV networks in the next
18 to 24 months.

Nass said clients prefer original fare over repeats because
research has shown that there's greater attentiveness to both programming and
commercials. Bob Igiel, executive vice president of Young & Rubicam, agreed that
original programming is "tremendously important to my clients" -- especially if
it's targeted to specific audience segments, like Food Network's Emeril Live
or Comedy Central's South Park, he added.

Nass said he'd be "willing to pay higher CPMs
[cost per thousand homes]" for original cable programming, since that tends to
produce higher ratings. That's already the case on network TV, where series like
NBC's ER and Seinfeld command higher CPMs, he said.

Of course, repeats are only repeats for those who saw a
show the first time around, Igiel said. Pat Esser, vice president of ad sales at Cox
Communications Inc., cited his own children as an illustration. TheWonder Years
on Nick at Nite is "new to them," and it is one of their favorite series, he
noted.

Igiel cautioned cable against becoming too smug. "I
wouldn't underestimate them [the broadcast networks] ... They are going to change
their [business] models" to survive in the new multichannel environment, he said.

He predicted that the Big 4 will copy cable in repeating
shows more often.

Nass felt that the TV networks need to figure out how to
sell the medium of television "collectively" with cable.

When asked how long advertisers will keep "paying [the
TV networks] more for less," Igiel replied, "when there's an
alternative," and cable is one. But some networks, including cable services, have
been increasing commercial clutter, and he warned that those networks "will be
discounted."

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