Cablevision Systems Corp., which had been the sole owner of the New York Interconnect, and Comcast Corp. said last week that they will become partners in the ad-sales organization, effective June 1.
Under a 10-year agreement, Cablevision's Rainbow Advertising Sales Corp. (RASCO) will continue to manage and run the interconnect's ad sales and marketing, RASCO president David Kline said.
The interconnect's 38 participating systems-not only owned by Cablevision and Comcast, but also by Media-One Group Inc. and Adelphia Communications Corp.-reach 3.5 million cable subscribers, making it the largest hardwired interconnect in the country, the companies said.
Kline said Comcast's move was "a true testament to the value the New York Interconnect brings to advertisers."
Comcast Cable Communications Inc. senior vice president of ad sales Roger Sverdlik added that the interconnect provides clients with a more targeted "alternative to spot broadcast-TV advertising."
Kline also said Comcast becoming a limited-liability partner, rather than an affiliate, shows that it will be more committed to the New York DMA.
Sverdlik said Comcast's participation in the interconnect had until now been "informal."
Comcast accounts for about 600,000 of its subscribers, Sverdlik said. Of the 38 systems in the interconnect, Cable-
vision owns the lion's share. So the partnership is not a 50-50 arrangement, but it is structured according to the two MSOs' presence within the DMA, meaning Cablevision is the bigger of the two partners.
The announcement noted that advertisers can now buy 80 percent of the DMA's cable households with a single phone call. The hole in the donut is Time Warner Cable, which pulled out of the sales operation in March 1998 in a dispute over various issues.
Two years ago, Cablevision and RASCO sought to convert participants in the New York Interconnect-then including AT & T Broadband-into partners.
Various consolidations and swaps gradually left Cablevision and Comcast as the dominant participants. Cablevision is in the process of acquiring some MediaOne systems in the DMA and Comcast is about to close on Adelphia's Toms River, N.J., system.
"We're investigating adding more inventory in 2001," Kline said when asked what changes might emerge from the new arrangement. "We'll study that over the summer to see if that's viable."
MSOs that participate in Adlink of Los Angeles and most other major-market interconnects dedicate "30 percent to 35 percent" of their inventory to those entities, Kline said, compared with 25 percent dedicated to the New York interconnect.
The interconnect is "having a record year," Kline added. "The business is so strong that we're already running into inventory issues."
Kline also said the interconnect would step up marketing to ad agencies. That has already begun, vice president and general manager Eglon Simons said, citing an ad in Advertising Age this spring that called attention to buying inventory via its Web site, nyinterconnect.com.
Sverdlik holds the same title as veteran Comcast sales executive Filemon Lopez, which, industry sources said, signals a restructuring at the MSO. Kline said, "Roger is the guy we've been working with for the past couple of months" in hammering out this partnership.
Sverdlik said Lopez will concentrate on local sales, while he will oversee regional and national sales via Comcast's various interconnects, from the wholly owned Philadelphia Interconnect to partnerships in the Washington, D.C.; Detroit; and New York interconnects.
Sverdlik joined the MSO in November, after having been executive vice president of sales for ABC Television Network.
There apparently have been no new talks with Time Warner about bringing its 1.3 million subscribers back into the interconnect's fold. Kline said RASCO and Cablevision have not contacted Time Warner because "we've focused all of our attention on this deal."
Time Warner spokesman Mike Luftman said: "This is all news to us. But if [Kline] wants to call [vice president of ad sales] Larry Zipin, I'm sure he'll take the call."