Web, Cable Carriage on Nets Minds

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New York -- Cable-network brass addressed MSO consolidation
and Internet opportunities at an International Radio & Television Society Foundation
gathering here last Tuesday.

The trend toward operator consolidation does not appear to
be appreciably altering cable networks' modus operandi, executives said.

Even though seven major MSOs have so much of the subscriber
base, BET Holdings Inc. president Debra Lee and Courtroom Television Network president
Henry Schleiff agreed that their companies still have to negotiate individual system deals
after the corporate deals are done.

But Comedy Central president Larry Divney pointed out,
"There's been tremendous downward pressure on rates."

Turning to the Internet, Lee said, BET.com, which is slated
for a mid-December launch, "has the potential to one day be bigger than BET [Black
Entertainment Television]."

Similarly, Discovery Networks U.S. president Johnathan
Rodgers claimed that Web sites for his various cable networks could generate more revenue
in "five to seven years" than the cable networks.

Zaslav, who said NBC has invested some $300 million in its
Internet sites in the past two years, added that none of the cable industry's
Internet ventures is profitable yet.

Disputing that, Divney boasted that Comedy's Web site
is already "slightly profitable," as ad revenue exceeds the minimal site
expense.

Despite talk about the Web and about digital networks, the
executives agreed that they are primarily focused on their core networks.

Zaslav also pointed out that digital numbers are
"still very small," and that "traditional analog is still the way people
watch TV."

IRTS panelists concurred with Zaslav that networks
"need to distinguish [their] product," not only among consumers, but among
advertisers and cable operators.

Original programming is the main way to do this, which is
why networks have substantially increased their programming budgets. In the past four
years, Comedy has quadrupled its programming expenditures, Divney said, adding that it
will hike spending 20 percent this year. BET doubled its program budget this year, Lee
said.

Court TV could have acquired numerous off-network series
that would have delivered a short-term ratings lift, but Schleiff said doing so would
ultimately damage its image by turning the network into "a TV Land for lawyers."

Zaslav said NBC Cable learned the hard way that it had to
change its original broadcast mind-set in order to score in cable.

A few years ago, CNBC repeated NBC's Late Night
with Conan O'Brien
at 10 p.m., he said, and "we spent a ton of money to
promote it, but nobody came."

More recently, CNBC ran some golf-tournament coverage that
was expected to appeal to its upscale viewers, he added, but again, "Nobody
came."

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