WeB Gives Ops Until Dec. 31 for Freebie

Author:
Publish date:

The WB Television Network's cable service, The WeB,
plans to start charging cable operators to carry the channel if they don't commit by
Dec. 31 to roll it out by the end of April 1999, officials said last week.

In addition to being subject to a rate card, MSOs that fail
to come on board by the New Year's Eve deadline will not be able to participate in
The WeB's profits as part of their agreements, according to Russell Myerson, senior
vice president and general manager for The WeB.

The WeB, through a consortium of TV stations and local
cable systems in smaller DMAs, launched Sept. 21 to more than 4 million cable subscribers.
MSOs that launched The WeB or that make a commitment to do so by Dec. 31 are getting the
network free for 10 years and sharing in its profits -- the same carriage deal that
Tele-Communications Inc. received.

"We're offering their deal to everyone,"
Myerson said. "We offered the best deal to everyone."

Nory LeBrun, the network's cable consultant, said that
after the Dec. 31 deadline, The WeB's rate card will be a monthly license fee of:

• Three cents per subscriber for those that launch it
between May 1 and Dec. 31, 1999;

• Eight cents per subscriber for launches in 2000; and

• For rollouts after 2000, 21 cents per subscriber.

So far, The WeB has reached just one-half of the potential
pool of cable homes -- 8 million -- that it is targeting in DMAs ranked No. 100 or
smaller, Myerson said. The WeB was created to fill in The WB in smaller markets where it
doesn't have TV-station affiliates.

The more cable homes The WeB reaches, the more clout and
appeal it will have when it negotiates to acquire syndicated programming for the service,
on top of The WB shows that it is airing in primetime, he added.

In addition to getting the cable-exclusive The WeB for
free, cable operators get a cut of local ad revenue from the network, as well as from ad
sales that will be generated in its aggregated markets as part of an unwired network,
Myerson said.

Basically, under the profit participation, cable systems
get 10 percent of adjusted gross revenue if The WeB is positioned in channel slots two
through 18, and 7.5 percent if it is positioned above 18. The portion of adjusted gross
revenue that a cable operator gets is calculated on a per-subscriber basis, factoring in
the percent of cable homes that it delivers.

The WeB, through its TV-station partners, has been running
spots directing noncable subscribers to their local cable systems via its
"1-877-Dubba-WB" sign-up campaign. The WeB is also expanding on that with
several radio ad campaigns and some billboards in local markets where the service has
launched.

So far, The WeB has passed along 1,753 callers, or
potential cable subscribers, to local cable systems via that phone number, LeBrun said.

The WeB can't yet gauge exactly how much coverage it
is adding to its parent, The WB, because there are overlaps in some markets: The WeB and
WGN are both there, and WGN airs some WB programming, Myerson said.

But The WB will move its programming off WGN next year,
when The WeB's coverage reaches 75 percent of viable cable homes in DMAs No. 100 and
smaller -- a penetration level expected by the end of the first quarter of 1999.

Related