TVN: Were Reaching 5 Million Subs


TVN Entertainment Corp. last week said its enhanced digital
pay-per-view operations have a potential reach of over 5 million cable households --
although it's unclear how main people are actually watching the network.

The company offers two PPV options -- a turnkey, 35-channel
digital near-video-on-demand option and a three-channel analog feed.

David Sears, senior vice president of affiliate sales and
marketing for TVN Entertainment, declined to break down the actual number of subscribers
for either the analog or digital feeds.

The service, however, did announce several new digital
launches, including three mid-size Comcast Corp. systems and such smaller MSOs as Hilltop
Communications in New York; Pinetree Cable in Maine; Communications Services in
California, GPA Cable in Virginia, Cass Communications in Illinois and Wyandotte Cable in

"[Digital boxes] are not moving as fast as the
industry would have liked, but we're getting there," said Sears.
"Nevertheless, we're on track with the numbers that we projected."

While Sears would not give specific digital numbers, he
said small operators are averaging around 8 percent to 10 percent penetration of digital
boxes. Clinton Cable in particular has been very aggressive in its digital deployment,
converting its pay subscribers directly to digital for a 16 percent digital set-top
penetration level.

TVN subscriber numbers received a major boost when it
decided to offer an analog version of its PPV offerings. TVN counts Cablevision Systems
Corp. as its biggest client, although the MSO is only offering TVN's five-to-eight
channel analog PPV service to its more than 2 million addressable households. Cablevision
has yet to sign to take TVN's digital PPV service, and may end up offering a
stand-alone digital service, said sources close to the situation.

Representatives from Cablevision said the company has yet
to make a decision regarding digital PPV.

While Sears said he hopes to secure Cablevision's
digital PPV business, most of TVN's other analog rollouts automatically convert to

"A lot of the deals are predicated on moving to
digital," Sears said.