T&B: Back Rooms Moving Front and Center

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To most people in cable, talking about advertising
sales' notorious traffic-and-billing (T&B) problems is only slightly more
interesting than, say, a recitation of the dictionary.

But this changes when leaders like Cabletelevision
Advertising Bureau president Joseph Ostrow put the "media-solutions" problem in
less technical terms.

Ostrow has been one of the most persistent and vocal in
calling attention to the need for improvements in cable's back office if the industry
is to realize its fullest potential in ad sales and become more buyer-friendly.

Many MSO executives agreed with that assessment, even if
they're not sure how to tackle the problem. Most are taking a conservative, slow
approach.

Pointing to T&B's importance to operators'
bottom line, Filemon Lopez, senior vice president of ad sales for Comcast Corp.'s
Comcast Cable Communications Inc., foresaw T&B getting, along with research, the most
capital investment during the next three years, much as digital ad insertion has in recent
years.

"We're still trying to find the solution to our
[T&B] problems," he said.

"I sure hope that someone steps up to the plate"
with promising new T&B products, said Jack Olson, vice president of Adelphia
Communications Corp.'s ad-sales operation, Media Partners. "We're prepared
to put money out if we're sure that it's the Cadillac that we're looking
for."

What's on MSOs' wish lists?

Lopez wants to see new products that "allow managing
our inventory more dynamically, more instantly" than can be done today.

This would mean keeping close track of an MSO's
inventory, including "sellout level, by daypart, by network and even by program. We
need to manage information a lot better than we have been. But we're impaired by the
current T&B system," Lopez added.

Olson said Adelphia is looking for "dynamic, real-time
scheduling and automated make-good functions," which would reduce manpower time and
improve inventory management across 200 or more channels.

"The ability to produce fully customizable reports,
month-end or otherwise," is another item on his wish list.

But Lopez and others cautioned that they're no longer
willing to leap into new-product tests willy-nilly.

"It used to be that we tried everything right off the
bat," he said, adding that operators are tired of "being a guinea pig ...
We're holding back until we know that they're all the way there" in terms
of development.

Why? "It's rather painful when it doesn't
work," Lopez sighed.

The conservative approach is also in at Tele-Communications
Inc.'s cable unit, TCI Communications Inc.

Jerry Machovina, TCIC's executive vice president of ad
sales, said, "Although we do have to work a little harder on the T&B end,
I'm not particularly inclined to change vendors. I'm happy with their
progress."

But, like other MSOs, TCI's T&B systems must be
able to cope with the further expansion of insertable networks, for one thing, he added.

Time Warner Cable's Larry Zipin, vice president of ad
sales, said only that his MSO is now testing four or five unspecified new T&B
products. Ron Pancratz, who holds that same post at Cable One, said his MSO is
"leaning toward 'Novar,'" a heavily sold new T&B system from CCMS
Inc.

On the vendor side, CCMS general manager John Sorensen
acknowledged that there's been some MSO dissatisfaction with the recent state of
T&B. But, he added, "that's turning around now," thanks to new
generations of products like Novar.

Some of the discontent stemmed from MSOs like TCI and Cox
backing other T&B systems that didn't meet expectations, he maintained. TCI is
now buying Novar, he added.

FIGHT FOR MARKET SHARE

Columbine JDS Systems Inc. and CCMS are widely considered
the T&B leaders, and each one claims to dominate an alphabet-soup field populated by
10 other vendors, ranging from Management Science Associates Inc. to LAN International to
CAM Systems Inc.

In mid-1997, Big Flower Holdings Inc. acquired CJDS. At the
time, CJDS said its account roster included 80 cable networks and satellite companies
(including the former PrimeStar Partners L.P.); 190 MSOs and cable systems (including
TCI); 950 TV stations; and 35 ad agencies and rep firms.

CJDS also claimed that it "processed approximately 60
percent of all domestic electronic-media-advertising dollars spent in 1996," or about
$30 billion.

CCMS -- an acronym for Cable Computerized Management
Systems -- is a wholly owned subsidiary of Enterprise Software Inc., which was called
IndeNet Inc. until last summer. IndeNet acquired CCMS in 1996.

CCMS said last year that it counted 18 of the top 20 MSOs
as clients, with 250 sites, and it estimated its T&B market share at 58 percent.
Sorensen claimed that its latest T&B-software market share is closer to 63 percent of
all 425 T&B installations, versus about 100 installations for CJDS'
"CompuLink."

Lenny Melamidas, the vice president responsible for
CJDS' cable-MSO-products division, declined to go head-to-head in measuring market
share with archrival CCMS. Instead, he said, CJDS' clients have 150 local cable-sales
offices that oversee "thousands of headends," adding that CJDS handles 60
percent of all cable headends.

CAM raised its profile just before the Western Show by
selling its "Eclipse" T&B software to the Philadelphia Interconnect. A
partnership between Radius Communications and Comcast, the interconnect believes that the
adoption of this T&B system will help it to evolve into a hard interconnect, said Jim
Klunder, its general manager. CAM, one of the smaller T&B entries, is owned by Lenfest
Communications Corp.

WHAT THEY OFFER

Melamidas said CJDS' T&B products already offer
dynamic scheduling, giving operators inventory updates every 10 seconds.

He added that CJDS' new parent has proven to be
"a tremendous help" in terms of research and development. Among new products
that bowed at the Western Show, he said, were "CompuLink Version 5," which
offers Y2K (year 2000) readiness, as well as various T&B modules packaged under the
overall brand "GoldMediaSystems."

On the network side, its "Paradigm" is a hot
seller, handling 150 channels globally, CJDS executives said earlier. Since introducing
Paradigm -- a next-generation software system for cable networks and direct-broadcast
satellite companies -- in the spring of 1997, CJDS has signed such U.S. clients as
TCI's National Digital Television Center, Rainbow Media Holdings Inc. and Galavision.

This past June, CJDS expanded its management-software
services on the buying side, as well, with its acquisition of the "Adserve" and
"Adtraq" software for ad agencies and media-buying services from KTS of Toronto.

CCMS' NOVAR

Sorensen said one product that CCMS is heavily
concentrating on is its Novar T&B system, which is already sold in 30 sites, up from
25 last summer. That product offers dynamic scheduling, added Brion Eriksen, CCMS'
marketing manager.

Its latest sales included TCI Media Services in Anderson,
Ind.; Jones Intercable Inc. in Waldorf, Md.; and Time Warner in Syracuse, N.Y., and
Cincinnati.

TCI's Pittsburgh system became the first site to
install the Windows-based Novar (upgrading CCMS' previous "20/20 EX"
system) in the summer of 1996, inserting on nearly 400 channels across 29 headends.

The company has now moved sales beyond "the
innovators" and early adopters, he said, adding, "We're booked out for
installations well into April."

Both of its T&B products are outfitted with
electronic-data-interface capabilities, with CCMS' most prominent EDI partnership
being with Video Networks Inc. and National Cable Communications at the Chicago and
Detroit interconnects.

Eriksen said CCMS didn't exhibit at the Western Show
this year, as it decided to alternate years with the National Show while continuing to
have an annual presence at the CAB Local Cable Sales Management Conference.

SEACHANGE, T&B UPSTART

SeaChange International Inc. has generated some excitement
among operators by introducing its own T&B product to compete against well-entrenched
CJDS and CCMS.

CCMS will keep an eye on the newest challenger, but
Sorensen said, "We don't see the same advantages as SeaChange apparently
does" in integrating its ad-insertion equipment with its T&B software.

Neither was CJDS overly concerned about SeaChange's
entry into the T&B fray, Melamidas said, since "a lot of companies have come and
gone [in T&B] over the years."

James Kelso, director of advertising systems at SeaChange,
said its new "SeaChange Advertising Management System," introduced in July,
offers such sought-after features as dynamic scheduling.

The company now has an advanced T&B-interface-software
system in development that wasn't shown at Anaheim, Kelso added.

"That will allow T&B and insertion to
'talk' to each other" more frequently than they can now, he said. Moreover,
this software will also work with local-area networks, with CCMS' Novar and with
other T&B systems, he added.

Although it launched with sign-ups by Time Warner
Communications in Orlando, Fla., and seven other operators, Kelso acknowledged that
SeaChange's T&B system faces an uphill battle against those of CJDS and CCMS.

SeaChange vice president Chris Scanlan earlier estimated
that those two leaders represented a combined "80 percent to 90 percent" share
of the T&B business.

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