Do Hit Shows Drive Network Launches?

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Earlier this year, a school board in suburban Connecticut
considered banning students from wearing South Park T-shirts to class. That
incident took place in a town near Hartford, Conn., where Tele-Communications Inc.
didn't carry Comedy Central at the time.

Right after that brouhaha erupted, TCI subscribers were on
the horn, asking the Hartford system about Comedy Central.

"All of a sudden, we started getting calls," said
Tad Diesel, regional director of government affairs and communications for TCI in
Hartford. "There was a bump-up in interest ... The requests just became more

On May 1, TCI launched Comedy Central, with Kenny and the South
gang in tow, to roughly 250,000 Hartford homes.

"Comedy Central has been on our radar for some time, South
notwithstanding, even before the celebrated incident by the school board,"
Diesel said.

However, the school-board fuss and the subscriber interest
in Hartford certainly didn't hurt Comedy Central's quest for carriage. Nor did a
pro-South Park campaign mounted by two radio stations in Harrisburg, Pa., where
Suburban Cable will start carrying Comedy Central in June.

The whole South Park phenomenon -- the
program's popularity and notoriety -- raises an obvious question: To what extent does
a hit show help to drive a network's distribution?


Cable operators were divided as to how much weight they
give to a network with a hit program in terms of launching that service. Some said hit
shows are invaluable in driving a channel's rollout, because high-profile programming
creates subscriber demand for the network in question.

But on the other side of the debate are MSO officials who
maintained that a hit show is just one very small piece of a very big picture when they
choose networks.

South Park isn't the only case study to look at.
FX, which began airing reruns of the popular The X-Files and NYPD Blue in
August, has seen steady distribution growth. Food Network, which made a media star of
celebrity chef Emeril Lagasse via his popular shows, won carriage last year on a Cox
Communications Inc. system in his home base of New Orleans.

In a city that loves food, Lagasse's program "had
a lot to do with" the programming service getting carried there, according to Bob
Wilson, Cox's vice president of programming.

Emeril Live debuted last January, Food president Erica
Gruen said.

"Certainly, Emeril was helpful in getting us
distribution in New Orleans," she said. "One can't underestimate a breakout
hit in the short-term and long-term success of any cable network."

This year, riding South Park's crest, Comedy
Central is on an acquisition roll. TCI in Denver, which dropped the network in late 1996,
relaunched it to 350,000 homes in mid-April. And The Lenfest Group's Suburban Cable
will roll out Comedy Central to 125,000 subscribers in that DMA.

On its Web site, rock station WTPA-FM posted a form letter
for Suburban subscribers to use to e-mail to Lenfest's Web site, asking that the
systems launch Comedy Central.

But John Murawski, Lenfest's director of product
management, said the Harrisburg system had planned to add networks, including Comedy
Central, regardless of South Park or the radio stations' campaigns.

"The fact that they [Comedy Central] have a hit show
is great," Murawski said. "We don't want to belittle that. It creates a
demand and adds value to our service. But everything just happened at the right time [for
the network to get carriage]. We had plans to rebuild Harrisburg. And we were moving
forward, trying to standardize our lineups across our systems. Most of them already carry

Brad Samuels, Comedy Central's senior vice president
of affiliate relations, said the network has gained 3 million new subscribers to date this
year, with commitments for another 2 million by July. Comedy Central currently reaches 49
million homes, with a target of 55 million by year's end.

"South Park is making a tremendous difference
in subscriber demand for the channel," Samuels said. "And that's a factor
that's an important criteria for an operator to launch a channel ... We are hearing
regularly from operators that we are the No. 1-requested channel by their customers. That
can put constant pressure on an affiliate."

Samuels also pointed out that late last year, Comedy
Central formed its own independent affiliate-sales force, rather than just being part of
50 percent-owner MTV Networks' sales team.

"It all dovetails very nicely," he said, in terms
of the growing distribution.

Since South Park is set in Colorado, and it was
created by two natives of the state, TCI's relaunch of Comedy Central in Denver would
seemingly be a natural.

"There was a little extra push from customers and the
local press [in Denver]," Samuels said. "There was a lingering interest in the
channel, and that was heightened by South Park. It seemed awkward that the channel
wasn't available in that market."

Matt Fleury, a spokesman for TCI in Denver, said the system
had anecdotal evidence, as well as hard research, that its subscribers wanted Comedy
Central in that market. He also noted that Denver is a city with young demographics, which
also makes Comedy Central an appropriate add-on, even beyond the South Park

"To dedicate 6 megahertz to any service, an operator
wants a strong channel that can stand on its own two feet in its entirety," Fleury


Nonetheless, a number of MSO officials put great stock in
the value of breakout, signature programs.

Having a hit show "dramatically" helps a network
to get carriage, according to Jedd Palmer, senior vice president of programming for

"Comedy Central has hit the jackpot with South Park,"
Palmer said. "It's the way that cable networks are built -- around one or two
must-see shows. In the cable world, one or two dynamic shows can make a network worth

E! Entertainment Television has enjoyed the benefits of
hits such as Talk Soup, and their value can't be underestimated, according to
network officials.

"Programming drives the business," said Debra
Green, E!'s senior vice president of affiliate relations.

Programming, in fact, is what adds value to cable and what
makes subscribers feel satisfied that they're getting their money's worth, MSO
officials said.

"We want to get some bang for our buck when we add
product, and you get that if the network has a hit show that people are aware of,"
said Linda Stuchell, vice president of programming at Harron Communications Corp.

Brad Greenwald, vice president of sales and marketing for
Time Warner Cable in Houston, said he considers whether a hit show's allure is
powerful enough to prompt its fans to subscribe to cable, or to switch to direct-broadcast

"To the extent that a show creates 'switching
passion' in consumers, which is enough for them to switch to satellite or wireless,
you're going to have to factor that in," Greenwald said. "If there is a
buzz going on out there about a show ... that will drive people to cable TV who may not
have considered it."

Hit shows "absolutely" drive distribution for
cable networks, said Pam Burton, director of marketing for Prime Cable.

"Comedy Central has had some shows that have really
pushed that network," she said. "And redistributed product has worked very well
for a lot of networks, like FX."

FX's distribution is up about 50 percent, to 36
million from 24 million, from the end of 1995, when it announced that it had acquired NYPD
, according to Mark Sonnenberg, FX Networks' executive vice president.

"Our whole point of going after shows like X-Files,
NYPD Blue and Buffy the Vampire Slayer was to improve the overall value of
the network, in terms of consumers, advertisers and operators," he said. "We can
attract a big audience."

Wilson said South Park's success and its
ability to bolster Comedy Central's distribution gains have been exceptional for a
cable network, because the show has been such a monster hit. Comedy Central is widely
distributed on Cox's systems, and South Park "did cause one or two of the
last systems without it to give in," he added.


Several MSO executives, however, warned that it wasn't
wise to launch a network mainly based on it having a prominent hit program.

"You can't make a programming decision based on
one show," said Jerry McKenna, vice president of strategic marketing for Cable One.
"When a network has a hit, it certainly makes you look at your distribution [of that
network]. But you have to remember that when you have carriage deals spanning three to
five years, it's a mistake to give a hit too much weight."

As an example, he recalled that Comedy Central had a hit a
few years ago with Politically Incorrectwith Bill Maher, which then moved
to ABC. There's no guarantee that South Park will be on Comedy Central
forever, since the success of a hit show can often make its creators greedy, and such
programs can sometimes be lured away to other venues, officials noted.

Patty McCaskill, vice president of programming at Charter
Communications Inc., also warned that operators must be cautious about putting too much
value on one show.

"Anything that makes consumers more aware of a channel
is going to be helpful for the network," McCaskill said. "But a network has to
be judged by what it has on 24 hours, as well."

Lynne Buening, vice president of programming at Falcon
Cable TV Corp., didn't credit South Park with giving Comedy Central a boost on
the distribution side.

"I'm thrilled for them," she said. "But
that's not a driver of distribution. Sports as a category is a bigger driver."

Marcus Cable Co. L.P. is launching Comedy Central this year
in various systems representing 200,000 subscribers. But those rollouts had been
preordained some time ago, said Lou Borelli, Marcus' executive vice president and
chief operating officer.

"We made these launch decisions long before South
became the pop-culture phenom that it is," he said.

That's also what TCI officials said in Seattle, where
Comedy Central is being rolled out in 300,000 homes that are part of a system rebuild.

"Comedy Central has always been in our minds as a
solid network to begin with, a bread-and-butter network," the TCI Seattle spokesman
said. "South Parkvalidated our decision to put it on."



Hit shows aren't only a boon to new networks, but also
to established ones that already have broad distribution, helping them to retain their
carriage, several network and MSO officials said. A ratings phenomenon such as Rugrats
on Nickelodeon "cements the value of a network" with viewers and cable operators
alike, said Nicole Browning, executive vice president of affiliate sales and marketing for

With channel capacity still limited, operators in some
cases are switching out networks that they feel are underperforming. A hit show can make
an operator think twice before dropping a network and replacing it with another one,
programmers said.

A&E Network has won critical and popular acclaim for
its signature Biography series, which has helped to define the network.

"It [a hit] definitely creates an awareness of a cable
network, and that does not go unnoticed by affiliates," said Whitney Goit, executive
vice president of sales and marketing for A&E Networks. "Biography comes
up a lot in customer surveys. When operators get feedback from customers, it's a
reinforcement of success at the customer level ... and a reinforcement of the cost benefit
of the channel."

When programmers sit down with operators to renegotiate
deals and perhaps to seek rate increases, "the question that lingers is: 'What
have you done for me lately?' It's wonderful to have that show [Biography]
as a reinforcement of value," Goit said.

Suzanne Cyman, vice president of programming and strategic
planning at Rifkin & Associates Inc., tends to agree that hit shows are more of a
value in terms of retention than in driving new distribution. While Cyman looks at ratings
when considering new channels to add, she believes that "hit shows are more geared
toward advertisers."

Cyman added, "South Park helps to justify the
rate for Comedy Central, but it hasn't gotten it incremental carriage."