Nets, Ops Eye TV Guide/TVSM Scenarios

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Amid speculation that TV Guide is negotiating toacquire TVSM Inc., executives on the network and MSO sides of the cable business werelooking for guidance last week as to the deal's impact on them.

A TV Guide spokesman said it was "toopremature" to comment on negotiations while TVSM officials were unreachable at presstime. But there are several ways the deal could play out, when and if it's finalizedby TV Guide owner News America Corp. and TVSM, said various cable sources, whospoke on background.

In one scenario, TV Guide could continue publishing TotalTV and The Cable Guide separately; in another, it could fold the others. Eitherway, some sources said it could then raise ad rates as a virtual monopoly.

But Chris Moseley, senior vice president of marketing andcommunications for Discovery Communications Inc., doubted TV Guide would engage inrate gouging and felt it would be more likely to offer advertisers discounted combinationpackages.

Even if News America chairman Rupert Murdoch gained avirtual lock on the guide category, Moseley said, "We deal with Murdoch-owned mediaaround the world, so I don't think they'd ever do anything to damage ourrelationship."

She added, "You could say they would have a monopoly,arguably, but it's not a true monopoly" because Discovery would have otheroptions such as local newspaper listings and electronic program guides like Prevue Guideto promote DCI's programming.

Nor did Moseley think Murdoch would fold TVSM'sguides.

"Logically, it makes a lot of sense" for NewsAmerica to instead offer advertisers discounted buys across all titles, she said.

Another executive, Scot Safon, senior vice president ofmarketing for Turner Network Television, said TV Guide "can bring somethingpretty powerful to the table" by integrating all the titles. Such"cross-publication integration" could mean consolidating their sales forces, headded.

Other sources thought another incentive for TV Guidemight be to use TVSM's cable-operator distribution setup as a way to cut newsstandcosts. TV Guide and TVSM, moreover, could pool their expertise in producingcable-system-specific editions.

Those system-specific editions are a strong promotionaltool for MSOs, chiefly for pay-per-view. In Cablevision of New York City's editionsof Total TV, for example, some black & white pages promote its OptimumTVservice and PPV titles like Air Force One. Meanwhile, MediaOne editions of TVGuide include a four-color PPV insert.

Five MSOs -- Comcast Corp., Cox Communications, MediaOne,Tele-Communications Inc. and Time Warner Cable -- have a financial stake in TVSM and thuswould have to sign off on any deal, sources said.

Time Warner Cable spokesman Mike Luftman said only that theMSO is "supportive of anything that will strengthen our vendors in the printed guidebusiness."

None of the MSOs would comment.

Observers agreed the deal was a good fit.

"TV Guide does a great job [on listings], so itmakes a lot of sense to have them as a suitor" for the TVSM guides, Moseley said..

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