Web, Cable Carriage on Nets Minds

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New York -- Cable-network brass addressed MSO consolidationand Internet opportunities at an International Radio & Television Society Foundationgathering here last Tuesday.

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

Even though seven major MSOs have so much of the subscriberbase, BET Holdings Inc. president Debra Lee and Courtroom Television Network presidentHenry Schleiff agreed that their companies still have to negotiate individual system dealsafter 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 slatedfor a mid-December launch, "has the potential to one day be bigger than BET [BlackEntertainment Television]."

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

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

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

Despite talk about the Web and about digital networks, theexecutives 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 peoplewatch TV."

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

Original programming is the main way to do this, which iswhy networks have substantially increased their programming budgets. In the past fouryears, Comedy has quadrupled its programming expenditures, Divney said, adding that itwill hike spending 20 percent this year. BET doubled its program budget this year, Leesaid.

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

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

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

More recently, CNBC ran some golf-tournament coverage thatwas expected to appeal to its upscale viewers, he added, but again, "Nobodycame."

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