MuchMusic Tries Local Angle to Woo Ops

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MuchMusic USA, which is winning good reviews from cable
operators, is increasing its repertoire by adding more local programming and working on a
broadband product.

Earlier this month, MuchMusic premiered a new monthly
regional show in Boston, The MuchMusic Boston Countdown, which is airing on
Cablevision Systems Corp.'s Cablevision of Boston system. The regional,
top-30-music-video-countdown show is very similar to one that MuchMusic began producing
for the Cleveland market in October 1996, according to Dennis Patton, senior vice
president and general manager of MuchMusic.

MuchMusic's regional programming debuted in two
markets where it has strong carriage from Cablevision, one of its partners,. MuchMusic is
a partnership between Cablevision's Rainbow Media Holdings Inc. and Chum Ltd., a
Toronto-based broadcaster that spun off its U.S. cable network, which was based on its
flagship Canadian music service, in July 1994.

MuchMusic doesn't have MTV: Music Television's
brand recognition or broad distribution, and some still tar it for being Canadian-based.

Nonetheless, the network is getting some attention by
positioning itself as an innovative network that focuses on live performances and
cutting-edge interactivity with its audience. As a result, its programming -- and its
bargain license fees, when compared with those of MTV -- are catching the eye of a number
of cable operators.

"They're doing it right," said Pam Burton,
Prime Cable's director of marketing. "They're focusing on the artists and
the music."

MuchMusic now reaches roughly 12 million homes, about 5.5
million of those via direct-broadcast satellite services DirecTv Inc. and PrimeStar Inc.
Distribution is up roughly 40 percent from a year ago, according to Patton, with some of
the network's recent launches including MediaOne in south Florida.

The 12 million-subscriber count doesn't include the
distribution that MuchMusic is gaining through recent digital launches, Patton said. Last
year, MuchMusic enjoyed a coup by landing a slot on the so-called three-pack, or first
three transponders, of the Headend in the Sky digital service that Tele-Communications
Inc. is rolling out across the country. MuchMusic is also part of the digital platform
that Cox Communications Inc. is launching in select clusters.

But it hasn't all been good news. In a setback last
year, MuchMusic failed to gain a slot on the new tier that Time Warner Cable is
establishing in New York City.

Local programming is the edge that cable operators look for
against DBS. And that's what MuchMusic is offering, and what it may expand beyond
Boston and Cleveland. MuchMusic is teaming up with local radio stations in both cities --
with WFNX-FM in Boston, which is owned by the parent of alternative newspaper the BostonPhoenix -- to create the local-countdown shows. In the Boston DMA, the show will
reach about 150,000 Cablevision homes.

"Given the demographics of this marketplace --
it's urban, it skews young and it has a lot of college students -- this programming
brings something different to the table for us," said John Hauenstein, director of
marketing and sales for Cablevision of Boston. "It's not only an exclusive
program, but a valuable brand."

There are also many opportunities to do cross-promotions
with Cablevision, WFNX and the Phoenix, Hauenstein said, adding that he would like
to see the show eventually be more frequent than just monthly.

MuchMusic also has a broadband package -- which operators
will be able to customize locally for their cable-modem and high-speed Internet services
-- on the drawing board, Patton said.

In terms of its national programming, MuchMusic likes to
boast that it's "the next generation of music television." Patton said the
network "is what MTV used to be."

MuchMusic carries up to 13 hours of live programming per
day, and the network's schedule is reformatted and different from what airs on the
Canadian version.

The Toronto facility -- from the outside to its inside
studios and offices -- forms the backdrop for MuchMusic's live programming. Viewers
can often interact with the programming through fax, phone or the Internet during shows
such as Intimate & Interactive. Recently, MuchMusic landed a live one-hour
interview with Madonna, who answered questions from a studio audience and viewers via fax,
phone and e-mail.

"The viewer becomes an active participant, not a
passive one," Patton said.

He drew parallels between what MuchMusic has been doing --
in terms of live programming and the use of its Toronto headquarters as a set -- to the
direction that MTV has recently taken, which included building a studio in its Manhattan
headquarters, looking out over Times Square.

"Now, our innovative ideas are being borrowed,"
Patton said.

MTV president Judy McGrath begged to differ, noting that
her network has been doing live shows and man-in-the-street interviews since it debuted in
1981.

"We've always done live programming, although we
didn't use it as our calling card," McGrath said. "Our decision to go to a
studio and to go live had everything to do with the fact that we're in Times Square.
It's a little arrogant to conclude that it [MuchMusic] ... was the driver for us to
have a studio here in Times Square. With all due respect, I don't see it."

As for MuchMusic, McGrath said, "It doesn't come
up in our research like other networks ... And you can't see it in Manhattan."

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