E! Takes the Wraps off Style

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Bucking for analog carriage and based on the popularity of
its fashion programming, E! Entertainment Television this September will spin off Style, a
24-hour network dedicated to fashion and design.

Style will debut with a four-hour block of programming -- a
combination of original series and select shows from E! -- which will repeat throughout
the day. Claiming that it can cater to an underserved audience, Style will cover
everything from fashion to home design, as well as the people and events that shape those
worlds.

Despite the extreme skepticism of a number of cable
operators, E! is pitching Style to MSOs as an analog channel. Operators have questioned
how strong a niche fashion is, especially when there are so many networks looking for any
kind of carriage, let alone analog.

E! president and CEO Lee Masters said there will be strong
incentives, such as "aggressive" upfront-cash launch fees and free carriage, to
persuade operators to put the new network on basic analog, where space is scarce, rather
than on digital or analog tiers.

"We are clearly aiming for analog carriage,"
Masters said, "and we will be offering aggressive launch fees ... I believe that with
the right deal, there is analog [space] out there."

He wouldn't say exactly how much cash per subscriber
E! will offer, but he noted that it wouldn't be anything near the $10 per head that
Rupert Murdoch shelled out for Fox News Channel.

Masters hinted that Style's cash launch fees will be
more in the neighborhood of what Discovery Communications Inc.'s Animal Planet paid,
which was in the $5- to $7-per-subscriber range. Style will charge license fees, Masters
added.

"Every operator is different," he said.
"Some prefer cash, and others prefer years of free carriage or a reduced rate. Our
rate card will be a reasonable rate card."

While other efforts to start successful fashion networks
have failed, Masters said his network has enjoyed strong ratings growth with its
fashion-oriented programming, and it has an infrastructure ready to launch Style.

Without that in place, it would cost $200 million to start
a network today, he said. "We'd be insane," Masters added.

He declined to specify what E!'s start-up costs for
Style will be.

Masters pointed out that unlike some of the digital
networks that have rolled out recently, the aim is for most of Style's programming to
be exclusive to it.

"Initially, some of the product will be shared,"
Masters said. "But once we get to 20 million or 25 million homes, the bulk of
Style's programming won't be on E!."

Initially, four new series are planned exclusively for
Style. Fashion Archeology, a half-hour weekly series, will take a look at the
evolution of fashion. Catwalk, a one-hour weekly show, will showcase models on the
runway. On Homes is a half-hour weekly series where a personality explores the
design of the world's most spectacular homes. And Model is a half-hour weekly
series offering "an intimate look at one of the world's most famous faces."
A series of specials are also slated for Style.

In addition, select E! programming, including Fashion
Emergency
and Fashion File, will air on Style, as well as the best of E!'s
fashion specials.

E! has been steadily increasing its share of
fashion-related programming, doubling it in the past four years, and it now makes up 10
percent of the network's schedule.

The network has seen solid ratings growth with the fashion
category. Ratings on E!'s pre-Academy Awards show, which Joan Rivers hosted, were up
52 percent this year over last, to a 3.5, according to Dale Hopkins, E!'s senior vice
president of marketing.

Hopkins noted that $170 billion are spent annually in the
United States on apparel and accessories, and that about 200 million people read fashion
magazines monthly.

That how lucrative the market is, and it offers high hopes
about how well Style can do in local ad sales, Hopkins added. Style will give operators
two minutes per hour of local ad avails.

"I'm looking forward to seeing their full
presentation [on Style] so that I can determine how it best meets Falcon's
needs," said Lynne Buening, vice president of programming at Falcon Cable TV Corp.

Word that E! was looking to launch a fashion network first
leaked at the MIP-TV trade show in Cannes, France, earlier this year.

Style is targeting an 18-to-49 demographic, and it expects
its audience to be 60 percent female.

E!, which is nearing 50 million subscribers, is looking to
forge alliances with major fashion magazines to create programming for Style, Masters
said.

Comcast Corp. and The Walt Disney Co. own roughly 80
percent of E!, and Liberty Media Group and MediaOne roughly 20 percent.

E! may experiment with home shopping down the road on
Style, according to Masters, but that won't happen initially.

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