TCI to Tweak and Expand HITS Lineup

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Denver -- With digital-video launches in more than 300
communities under its belt, Tele-Communications Inc. is working on a plan to refine its
program lineup.

The goal is to increase market penetration for the
digital-cable service, which will be available to all of TCI's subscribers by
midyear.

As part of its effort, TCI recently sent a detailed,
four-page survey to existing and potential cable-system affiliates of Headend in the Sky,
the MSO's digital-video service, seeking feedback on what types of programming
they'd like to see on the digital "pods" that extend beyond the
"three-pack" combination of digitally compressed networks that many systems now
receive.

Currently, TCI squeezes 12 channels of digital programming
into each of its 12 satellite transponders. Most takers of the digital feeds pluck off
three 12-channel tiers. But as the service proves in, many want to quickly expand the
amount of programming that they receive and retransmit to their customers.

In the survey, affiliates were asked to rate 22 networks or
groups of channels that TCI is considering adding to HITS on a scale of one (not at all
valuable) to five (extremely valuable). Respondents were assured that their answers would
not be shared with programmers or with other cable operators.

According to the survey, TCI is considering adding:
Wingspan; Toon Disney; Lifetime Movie Network; 10 channels of Spanish multiplexes (Liberty
Media Group is developing the services); an eight-channel International Channel multiplex;
ZDTV: Your Computer Channel; a customized offering from The Weather Channel; Gospel Music
Channel; 10 regional-sports channels; TV Asia; Outlaw Channel-Willie Nelson; CNNfn;
CNN/SI; Sundance Channel; Flix; Trio; World News Networks; My Pet TV; Showtime 1 through
4; The Movie Channel 1 through 4; Do It Yourself (Home & Garden Television's
planned digital network); and pay-per-view sports packages from ESPN.

Tom Beaudreau, vice president of TCI's
digital-television operations, said the survey results will be completely tabulated by
June, and they are aimed at enhancing TCI's digital product.

"We try to work closely with the field," he said.
So far, he added, the MSO is still culling through responses, and, "We're
hearing all sorts of different things.

"When we do add to the lineup and change the current
transponder configuration, it will reflect what we're hearing," Beaudreau said.

The survey also asks HITS affiliates to rate the current
HITS pods in terms of their programming content and overall value to subscribers, and to
give their reasons for assigning a positive or negative ranking.

Several HITS affiliates last week complained that under the
current pod configurations, they must take roughly a half-dozen pods -- more than they
really need -- in order to get all 40 DMX, or digital music, channels. They would like to
see the DMX channels repositioned on the pods, so that they could get all 40 by taking
fewer pods.

Keith Tyrrell, director of digital services for
FrontierVision Partners L.P., a HITS affiliate, said he would like to see networks that
are discouraging digital carriage pulled off and replaced on the HITS lineup. For example,
several operators complained that The History Channel and HGTV, both carried on HITS, have
set onerous terms and rate structures that basically prevent non-TCI systems from putting
them on digital.

"Some networks have no digital strategy," Tyrrell
said, and they are therefore taking up space on HITS that should be given to
digital-friendly programmers.

In fact, one operator wanted to see Discovery
Communications Inc.'s fourth digital network, Discovery Civilization, put back on one
of HITS' first three pods, or the three-pack. He said he can then offer it to his
subscribers instead of History, which is bucking digital carriage. HITS carries
Discovery's other three digital networks on its first pod, but it moved Civilization
onto its No. 12 pod, which few operators take, in a rejiggering last year.

In terms of the networks that operators said they would
like to see added to HITS, Toon Disney, Lifetime Movie Network, ZDTV and the ESPN
PPV-sports packages were on top of the list.

"These programmers [Disney and Lifetime] are
well-branded on analog, and these services will pull people into digital," said Ron
Martin, chief operating officer of Buford Television, a pioneer HITS affiliate.

ZDTV was popular because of its potential tie-ins with
cable-modem services.

As for TCI's digital launches, Beaudreau said the
MSO's digital service is currently available to 10.2 million customers.

"We just keep pushing on," Beaudreau said, noting
that an aggressive launch schedule will continue to steamroll through April and May.

"With the launch efforts substantially behind us, the
next milestones are toward increased penetration," Beaudreau added.

Linda Moss contributed to this report.

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