Stations Moving Slowly on The WeB

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With the Sept. 21 launch of the cable version of The WB
Television Network looming, its affiliate in Sioux Falls, S.D., was still trying to hire a
sales manager last week, and it hadn't sold any local ads yet.

Niggling details like that hadn't kept Leigh Anglin,
general manager of the Midcontinent Cable Advertising Group, and The WB from vigorously
promoting its upcoming The WeB network, though. The WB used a local ad agency to buy time
on the NBC affiliate during Seinfeld and Friends, promoting the imminent
arrival of Friends on Sioux Falls Cable's channel 14.

During halftime of the Dakota Bowl -- a high-school
football exhibition Sept. 5 attended by about 7,000 people -- Midcontinent handed an
oversized check for $1,400 to charity in a tie-in promoting The WeB's placement on
the cable system's channel 14.

"It was a great commercial," Anglin said.

The WB -- home of teen-appeal hits Dawson's Creek and
Buffy the Vampire Slayer -- is counting on Anglin and many other managers at local
cable systems, TV stations and even radio stations to sell The WeB to advertisers and
viewers in markets that are too small to have a local WB broadcast affiliate.

The WeB's concept is to share advertising revenue with
cable systems that clear channel space for the WB offshoot and with broadcasters that
promote it. It's a cable-exclusive product aimed at markets smaller than the top 100.

It doesn't promote itself to the world as The WeB, but
instead as The WB, with local call letters, as if it were broadcast from a tower. In Sioux
Falls, Anglin held out for KWJB, arguing that KXSF, which he was initially assigned,
wouldn't sound good in radio ads.

As of late last month, The WeB was figuring that 82 of the
110 targeted markets would launch Sept. 21, representing about 75 percent of the footprint
that it eventually hopes to reach. But given the novelty and complexity of its business
plan, there were quite a few last-minute bugs to iron out.

"To simultaneously launch 82 businesses is quite a
chore," Russell Myerson, The WeB's general manager, said in a recent interview.
"But I've got to tell you, it's a labor of love."

SLOW START

Judging by Sioux Falls and some other WeB launch markets,
the love will come in ahead of the money. Broadcasters tasked with selling ads in the
local markets said that effort is a work in progress.

In Tyler, Texas, for example, Philip Hurley, the general
manager at NBC affiliate KETK, didn't expect to start selling local ads until after
the network has been operating for a while. "They'll be running national spots
and promos" until then, he said.

Hurley's been occupied with signing contracts with
south Texas cable systems operated by TCA Cable TV Inc., Buford Television Inc., Wehco
Video and other firms, as well as locking in channel assignments and getting the
advertising-traffic system up and running. Next month, he'll hire two more WeB
account executives to round out the sales staff.

But by December, Hurley's WeB sales staff will have a
Nielsen Media Research ratings book to show to potential advertisers. "We think that
those numbers are going to be positive," he said.

In Utica, N.Y., another local NBC affiliate, WKTV, is
selling ads for WeB "stations" there and in Elmira and Watertown. Sam Weiff,
director of sales and marketing at WKTV, said he has sold some WeB spots, including a few
to a local medical center, which shifted some business away from other broadcasters. But
it's going to take a while to sell the bulk of the local inventory, Weiff added.

When they do pitch advertisers, the stations will be
"concentrating on fast food, automobile, furniture and any type of business that we
can relate to kids and teen-agers," in Hurley's words.

Said Anglin: "We'll match up the demographics of
the 18-to-49 crowd -- the soft-drink market, car dealers, clothing."

LARGELY TCI & TIME WARNER

The lion's share of WeB launches are coming on systems
owned by two operators: Tele-Communications Inc., which forged a "strategic
partnership" with The WeB early on; and Time Warner Inc., parent of Time Warner
Cable, The WB and The WeB.

The next biggest contributors are MediaOne and TCA, Myerson
said. Other cable affiliates are owned by Century Communications Corp., Harron
Communications Corp., Chambers Communications Corp., Fanch Communications Inc. and Greater
Media Inc.

Broadcast groups representing The WeB include stations
owned by Benedek Broadcasting Co., Granite Broadcasting Corp. and Freedom Communications
Inc.

The situations in Sioux Falls, Tyler and Utica provide a
glimpse at the grassroots efforts that are required to create a hybrid cable "station
group" -- even before the hard work of pitching the product to advertisers kicks in.

As of last week, Hurley said he counted 110,000 cable
subscribers for Sept. 21 out of the 116,000 that he budgeted to deliver in the first year.

The biggest market -- and one of the biggest WeB markets
overall -- is Tyler, with more than 30,000 subscribers. In all, about 20 headends in the
region will run WeB programming featuring local ads sold by Hurley.

Going along with the local "station" format, The
WeB's local identity is a combination of the channel assignment and call letters. In
Tyler, Jacksonville, Kilgore and Longview, Texas, the call letters are KWTL.

The channel assignments are less consistent. In several of
its biggest markets, The WB's cable affiliate will be on channel 5, while others will
run it on channel 11. Friendship Cable's Buford systems have assigned The WeB nine
different slots, ranging from channel 16 to channel 50, Hurley said.

Randall Rogers, TCA's executive vice president and
head of operations, said about one-dozen TCA systems will launch The WeB, and around
one-half of those have had to allocate channels above 20.

INCENTIVES & CONFLICTS

Cable operators have incentives -- namely, a bigger share
of local ad revenue -- to run The WeB on a channel number below 19. To get channel 5 in
Tyler, for example, TCA dropped a distant, duplicated NBC affiliate. But that can't
always be done, at least not right away.

Myerson estimated that more than 60 percent of systems will
carry The WeB on channels 2 through 18.

Weiff said the assignments are still in the works in the
Utica area, but he's hopeful that most, if not all, will be at 20 or lower.

The Sioux Falls affiliate will run on channel 14. To get
that slot, Midcontinent had to move Disney Channel to another slot currently held by a
barker channel, Anglin said.

Rogers said the channel assignment was the toughest part of
the launch for the cable operator. But the way he put it: "We're certainly not
taking the biggest risk on this."

That risk belongs to the broadcast partners, which are
mainly independently owned CBS, ABC, NBC or Fox affiliates, in that order. Most of them
are hiring new salespeople whose marching orders are to sell WeB ads without cannibalizing
the station's core business.

The flip side, articulated by Linda Stuchell, Harron's
vice president of programming and public affairs, is that cable operators want to make
sure that their broadcast partners will be able to effectively sell WeB spots, as well as
their own ads.

"I know from our perspective that we want to make sure
that ... [The WeB] is not simply being used as an added value for advertisers," she
said.

Harron wants The WeB because it's an opportunity to
add some popular programming without having to pay a license fee -- part of The WeB's
pitch to charter affiliates. It's also a chance to tag the Harron brand onto The WB
in promotions. And, Stuchell said, "Time Warner happens to surround this system. We
didn't want this system to be the only system to not offer the service."

Weiff, who's overseeing the WeB partnership with
Harron in upstate New York, said he's hiring a stand-alone staff for WeB sales
because his top priority is to not erode the NBC affiliate's strong market position.

"I'm not willing to cut into WKTV," he said,
adding, "Frankly, I'm going to be going after the Fox business."

Interestingly, no such potential for conflict exists in
Sioux Falls. That's because the broadcast partner in that market is a group of radio
stations. And to tie the knot even tighter, the radio stations -- five of them -- are also
owned by Midcontinent Cable's parent, Midcontinent Media Inc. Anglin said
Midcontinent liked the arrangement because it kept control over the ad sales.

NO OUTLETS

Myerson said about 15 of the 82 initial launch markets were
too small to find broadcast-TV affiliates. "In some markets, there's only one TV
station in the market, so in terms of carving up the ad dollars, they'd be carving
into their own business."

In those cases, the WeB affiliate is from outside of the
direct market or, in Sioux Falls, it is a radio group. WETK, the Utica station, is
handling ad sales for WB cable affiliates WBE (Elmira) and WBWT (Watertown), in addition
to WBU of Utica.

The WeB has encouraged its affiliates to develop some local
programming, such as newscasts, to supplement the WB programming and syndicated staples
like Friends (syndicated by corporate cousin Warner Bros.) and The Rosie
O'Donnell Show
.

But none of the three local-market outlets interviewed for
this story had plans to develop newscasts, and Myerson said he understood why.

"We think that adding a part-time newscast, adding
community-affairs programming and adding programming during the daytime hours ... will be
a real boon to us," he said.

But broadcasters and cable affiliates can't afford to
develop that programming until more headends in a given market are linked with fiber, to
spread out the cost.

A local newscast is part of the plan, Myerson said,
"but it's a part of the plan that's dependent on the rebuilding of the
cable industry."

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