FORUM: The Digital Age: Strike Up the Brand

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The digital age is dawning, and it provides all of us with
a new frontier. Cable's renaissance of choice -- providing viewers with both depth
and conscience -- continues into its next phase. And while we can expect profits from
providing these services, let's understand that we have a responsibility to get it
right the first time.

Cable operators and programmers alike are beginning to take
advantage of digital technology to increase the breadth of their product, as well as the
number of channels that are available to their subscribers. This development will continue
to make cable more competitive than ever, but as these networks begin to proliferate,
nothing could be more devastating to the next wave of the industry's growth than for
the consumer to be taken for granted.

What is going to make potential viewers buy these tiers of
new channels is the promise and delivery of value received, which begins with a successful
brand identity. However, our industry must proceed carefully during this time of multiple
brand-extension opportunities. While it is important to provide the new product with
easily recognizable links to the original brand, concurrently, one has to be sure not to
cannibalize the existing product base. Calvin Klein, The Walt Disney Co. and
Anheuser-Busch Co.'s Budweiser are good examples of major, globally recognized brands
that have been able to deliver successful line extensions while achieving this fine
balance.

We are faced with a similar challenge for our new line
extension -- Lifetime Movie Network, the digital and analog service that is scheduled to
launch June 29. It embodies a concept -- movies for women -- that is easy for consumers to
understand and easy for operators to market. Although a channel filled exclusively with
movie programming is a new direction for Lifetime, programming and marketing a channel for
women is obviously not a new concept for us.

If people are aware of, and feel comfortable with, the
values and traits that are inherent in a particular brand name, they will say yes, and the
creation of digital networks is all about consumers saying yes to the cable
industry's next evolutionary step.

Without product, cable operators have nothing with which to
expand their subscriber universes or revenue streams, and branding is the foundation of
any successful product. Faced with today's harsher realities, the television business
must not only keep up with its own increasingly splintered condition, but it must also
compete with the many alternative forms of entertainment available to consumers. Among
this plethora of choices, the digital services that viewers choose to spend time and money
on will be those that have a recognizable identity and that provide a valued service to a
targeted audience.

And there is no limit to how big that audience can become.
I predict that within the next decade, effectively branded digital networks can and will
acquire subscriber bases of 30 million to 40 million. If in doubt, look at the history of
such now-user-friendly devices as televisions, VCRs, computers, compact discs and
countless others. As technology continues to mature and improve, it tends to become
one-half as expensive and twice as useful, and there is no reason to expect that the same
won't happen with digital set-top boxes and related equipment.

At the same time that the technology evolves, digital
networks themselves will grow and adapt to the changing programming environment. Digital
networks designed as complementary vehicles to their parent services will facilitate brand
expansion, as well as broader, more in-depth viewing possibilities.

We look forward to the day when Lifetime Movie Network can
become the showcase for the wealth of quality women's films, providing them with the
attention and audience that they deserve.

The digital age is going to be an exciting and productive
time, and an effective brand identity -- which, in turn, serves to create loyalty among
viewers -- will be the engine that continues to drive success for the television industry.

Doug McCormick is president and CEO of Lifetime Television.

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