Toon Disney Gets Coveted Analog Slots

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New York -- Animation channel Toon Disney, originally
envisioned by The Walt Disney Co. as a digital network, will launch April 18 with 3
million subscribers and coveted analog carriage on a number of MSOs, including a charter
deal with Marcus Cable, officials said last week.

Marcus will be rolling out Disney Channel spinoff Toon
Disney MSO-wide on expanded basic to nearly 1 million subscribers, at the same time
repositioning Disney Channel to a basic service from a premium service, according to Anne
Sweeney, president of Toon Disney/Disney Channel.

Direct-broadcast satellite provider EchoStar Communications
Corp. is also on board for Toon Disney's launch, with its 1 million homes, officials
said last week.

In addition to Marcus, Century Communications Corp., Rifkin
& Associates Inc.'s CableVision Communications, Classic Cable, Galaxy Cable,
Coaxial Communications and Americast will also be launching Toon Disney on expanded basic.
That means valuable and scarce analog carriage for the network, instead of it being placed
on a digital tier with limited penetration, which is where Disney officials initially
expected Toon Disney to land.

"This is proof that there is still analog channel
space left for strong brands and good ideas," Sweeney said at a press briefing.

By June 1, Marcus will have Toon Disney rolled out in
systems such as Burbank, Calif.; Fort Worth, Texas; and Birmingham, Ala., totaling about
650,000 homes. The MSO will launch the new 24-hour channel in the remainder of its systems
through early 1999.

"We were very impressed with the quality of Toon
Disney and the whole ability to pair it with Disney Channel on expanded basic," said
Lou Borelli, executive vice president and chief operating officer of Marcus.

Borelli sees Toon Disney as bringing value to expanded
basic, rather than as an option for digital, which Marcus mainly views as a venue for
premium services and pay-per-view.

"When we first started talking about Toon Disney, we
thought that it was digital," Sweeney said. "Everyone thought that it was
digital except for Charlie Nooney, our head of affiliate sales, and our cable-operator
partners. They quickly saw the value of Disney-branded entertainment on basic."

Classic Cable, with its rural Midwestern systems, expects
to roll out Toon Disney in a significant number of its 170,000 homes, according to
president Steven Seach. "Clearly, from our vantage point, we believe that our
customer base will assign a high value to the Disney brand name," he said.

In addition to EchoStar, Disney is also in talks with other
DBS services, such as DirecTv Inc. Disney officials are hoping to have more deals, which
are being negotiated now, closed by the launch date, which is also Disney Channel's
15th anniversary. In addition, Disney is in talks with Tele-Communications Inc. about Toon
Disney, and it is pursuing digital deals with MSOs.

Nooney, senior vice president of affiliate sales and
marketing for the Disney networks, said Toon Disney's goal is still to be a
"digital-friendly" network. So although the license fee is more favorable as an
incentive for operators that carry Toon Disney on analog, rather than on digital,
"the percentage difference is not overwhelming," according to Nooney.

He added that Toon Disney will pay operators a "modest
fee" of $1 to $2 per subscriber for basic carriage, but he likened that to the
traditional marketing support that programmers pay operators to launch new services. In
some instances, Disney is letting operators carry Toon Disney free-of-charge for a year or
two as an incentive to keep it on basic, he added.

Disney is only offering Toon Disney -- which is drawing
from the 2,000 episodes of animated programming in the Disney library -- to cable
operators that carry Disney Channel on basic.

Sweeney and Geraldine Laybourne, president of Disney/ABC
Cable Networks, both noted that Disney has more digital networks in the works.

"It really depends on the needs of the
marketplace," Sweeney said "Our strategy is knowing what the consumer wants and
staying close with the operators."

While some programmers -- most notably Discovery
Communications Inc. -- are creating a multitude of digital networks to try to reserve
"shelf space" on digital platforms, Sweeney and Laybourne said that's not
Disney's approach.

"We are not in the spaghetti-against-the-wall
mode," Sweeney said.

In fact, Laybourne warned, "Some of the people
throwing things [new digital networks] out are thinning their libraries."

Toon Disney will eventually carry advertising, perhaps in a
few years, according to Sweeney -- unlike Disney Channel, which will remain
commercial-free.

About 50 percent of Toon Disney's programming schedule
will be exclusive to Toon Disney, with the rest overlapping with Disney Channel.

From 6 a.m. to 8 a.m., and then again from 4 p.m. to 7
p.m., Toon Disney's programming will be geared toward kids aged two to five.
Primetime Sunday through Thursday will include a three-hour block called "Magical
World of Toons." Primetime Fridays will feature movies, such as Return of Jafar
and The Rescuers, while Saturday nights will focus on single Disney characters or
group of characters.

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