Amid Dereg Anxiety, Cablers Talk Tall, Tilt Toward Tech

The center of attraction on the exhibition floor of the Western Cable Show was a sloping skateboard track that allowed well-padded, helmeted skaters hired by ESPN to gather speed, zip up a steep incline and soar into the air before spinning back onto their wheels.

Egged on by the vocal crowd of spectators, more than one of the exhibitionistic young men and women got too carried away and failed to execute a smooth landing, instead falling off their skateboards with a thud that shook the wooden track.

ESPN’s spectacular exhibit could stand as a metaphor for the Western Show itself. High-flying rhetoric filled the panel sessions, speeches and corridor talk throughout the three days of the show.

But turning the rhetoric into success is the challenge. The Western Show, usually focused on programming, turned into the modem show. Much of the talk among operators was developing high-speed modems, online services and – of course- telco entry.

“I’m in awe of our progress in the delivery of telephone services and hookups to computers,” intoned Brian Roberts, president of Comcast Corp., a top-five multiple-system cable operator, during a luncheon speech on the second day.

Tele-Communications Inc. senior vice president Bob Thomson thought the cablers could realistically take 10% of the telcos business. Speaking at a panel, Thomson was told he was thinking small by none other than a telco exec who said the cablers could take 30% of telco business easily.

That will be key for cable’s success. The telcos will fire back with their own video dialtone systems, and while direct satellite has not made a major dent into cable, they will at some level.

Sizing up the future

While cable operators look ahead to a future of new businesses, cable networks can probably look forward to more growth without serious threat from new networks.

TCI president and CEO John Malone said the big networks will rule for the rest of the decade.

These networks will tower over the industry “the way a few oak trees capture most of the sunlight in the forest, ” Malone said, referring to such revenue powerhouses as ESPN, CNN, TBS, USA, Nashville Network, Discovery, TNT, Family, A& E, MTV, Lifetime and Nickelodeon.

Malone cited Disney’s buyout of ABC, saying that Disney’s chairman Michael Eisner did the deal mainly to capture ESPN, the cable service 80% owned by ABC; ESPN, said Malone, spins off more advertising revenue ($377 million in 1995, according to Kagan Associates) and more monthly fees from cable operators ($485 million in 1995) than any other cabler in the business.

Pointing to the 97 Emmy nominations for cable programs and cable’s steady upward climb in the Nielsens as the broadcast networks continue to lose viewers, Roberts said, “Consumers’ opinion of cable is on the rise.”

Providing comic relief to the techie fare was Turner Broadcasting chairman Ted Turner in the opening session.

Squishing Rupert

While he acknowledged that his new post as vice chairman of Time Warner, should the merger go through, is “not much of a job, ” he added that the size of the merged entity will let him “squish Rupert like a bug.”

Turner sees News Corp. chairman Rupert Murdoch as his biggest rival, and laughed off the latter’s recent threats to launch a rival to CNN.

“Rupert can trot out news, and Disney can trot out cartoons. We will whip their asses,” Turner declared.

D.C. blues

Although lots of dealmaking was clearly going on, for many registrants at the show, the optimism was all surface. Cable operators and new and prospective cable networks all brought along a generous supply of Prozac, and for good reason: The chances of passage of a desperately sought-after deregulation bill now sitting in a House- Senate conference committee have begun to slide from near-certainty to a toss-up.

“I think it’s only 50/50 whether a communications bill will pass this Congress,” said Tom Rogers, president of NBC cable and business development, and a former Communications Committee staffer on Capitol Hill.

Frank Washington, CEO of Media Express, who once worked as a counsel to the Federal Communications Commission, agreed, saying, “The longer this bill goes without final action in the Congress, the less likely are its chances this year. And once we go into 1996, a presidential-election year, all bets are off.”

Many cable operators say that banks and other investors are waiting for passage of the legislation before they pony up the dollars that operators need to rebuild their cable systems in order to accommodate scores of new channels.

Despite the uncertainty of dereg, deals were being done:

* Cabler USA Network acquired a movie package from co-owner Paramount Pictures that includes some of the studio’s biggest hits of the last five years. Among the 23 theatricals USA bought are “Indecent Proposal,” “Clear and Present Danger,” “The Firm” and “The Godfather, Part III.” USA probably paid between $1.5 million and $2 million per title, sources said.

Lifetime commitment

* Lifetime revealed a blueprint for the most ambitious slate of primetime series projects in its history, including three contemporary hours featuring strong female leads, and a reality hour a la “Unsolved Mysteries.”

* Showtime Networks’ new niche web Sundance Film Channel tapped Showtime exec Nora Ryan as president and inked several distribution deals for its planned February launch, including deals with a number of cable operators, wireless cable operators and a direct broadcast satellite service. All told, the deal has the potential to reach 2 million homes.

* Top-10 cabler Jones Intercable announced the Dec. 31 launch of a country music cable channel that would reach about 500,000 homes.

Saying it with flowers

Among the exhibit areas pulling in the most operator traffic were the two largest pay-per-view distributors, Request TV and Viewer’s Choice. Jeff Bernstein, senior VP of programming and marketing for Request, said the record outlay of slightly more than $1 million by Miramax to promote the pay-per-view showing of “Pulp Fiction” sent the movie’s buy-rate crashing through the roof. “Now all the major studios,” he said, “are planning big pay-per-view marketing campaigns for their movies.”

Bernstein specifically cited a major campaign for “Goldeneye” in which MGM will link up with BMW, whose car was featured in the hit Bond movie. He also cited New Line’s forthcoming Christian Slater starrer “Bed of Roses” which will climb into the promotional flower bed with a florist organization.

All that may be lacking in the PPV promotional universe are the skateboarders.

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