Moves seen as progress toward workable digital solution
Family-oriented Pax Net and the WB TV Network have signed separate network carriage agreements with John Malone’s TCI, the giant cable operator.
The moves signal a rapprochement between TCI’s Malone and broadcasters, as they grapple with how to accommodate the carriage of digital signals — and prevent the government from telling them how to do it.
Creating the WeB
In WB’s deal, announced Thursday, TCI has agreed to create the WeB localized cable distribution system in markets smaller than the top 100, a deal in the works for more than a year. The WB has also inked an agreement with parent company Time Warner’s cable systems.
The contract between Paxson Communications and TCI subsid Satellite Services is the first of several that Bud Paxson expects to sign with MSOs and DBS operators prior to the network’s Aug. 31 debut.
A TCI spokeswoman said it will be up to the individual TCI system (in markets not currently served by Paxson’s 78 TV stations) whether to sign the Pax Net agreement.
$1 per subscriber
One source says Paxson is offering TCI systems a yearly fee of $1 a subscriber if the system puts Pax Net on expanded basic with all of the mass-circulation cable networks. The system will collect only about 33¢ a year per sub if Pax Net goes up on a digital tier, which may reach only 10% to 20% of the subscriber base.
If all of the TCI systems carry the network on expanded basic, the deal could add 4.5 million households to Pax Net’s broadcast tally of 72 million (counting purchases pending completion), Paxson told Daily Variety.
No sub fee
Paxson said he expected a good response from operators, since Pax Net will not levy a sub fee and will further carriage incentives with local ad avails.
“The avails they get will be a bit more than they get from Lifetime, USA, TBS or TNT,” Paxson said. Each of those four provide the cable system with two minutes an hour of local commercial time.
“There’ll be more deals with cable and DBS, and we’ll get over the 80% TV households level pretty quick, to keep up with the WBs and the UPNs,” Paxson added.
Roll-out via expanded basic on TCI should start immediately, Paxson said, and will be followed later by the digital rollouts.
Deal comes three weeks ahead of Pax Net’s coming-out party, a May 18 upfront presentation in New York.
“We’re looking for a majority of our sales to be local and national spot, as opposed to network, so the upfront will be more a getting-to-know-you with advertisers,” a Paxson spokeswoman said. Pax Net programming includes reruns of such series as “Touched by an Angel,” “Promised Land” and “Dr. Quinn, Medicine Woman.”
The WB’s WeB plan to get exclusive cable distribution in smaller markets has gone on for a couple of years and will launch Sept. 21. For the time being, the WGN cabler also will continue to carry the WB.
The TCI and Time Warner pacts are expected to give the WB 90 new cable affiliates, although the cable operators still have to make deals with station groups in many of those 90 markets to serve as partners selling ad time and sharing ad revenues.
While the WB has deals in place with stations in all 90 markets, so far only one station group, Benedek Broadcasting, which is the largest in markets 100-210, has officially signed agreements with TCI, Time Warner and the WB for its 22 stations.
TCI and Time Warner have guaranteed the WB a combined 2.5 million subscribers for the WeB at launch and up to 4 million over the course of the 10-year deals, as channel capacity increases, sources said. Those 2.5 million subscribers would account for roughly 2.5% of the country.
The 24-hour WeB programming that TCI and Time Warner systems will carry is a combination of the WB primetime lineup and syndicated shows from Warner Bros. and small syndicators, such as “Jenny Jones,” off-net “ER” and “The Drew Carey Show.”
A one-hour block of “Friends” is expected to run from 7 p.m. to 8 p.m. leading into the WB’s primetime, and “The Rosie O’Donnell Show” will follow primetime at 10 p.m.
In exchange for carriage on basic cable with a channel position adjacent to the major broadcast networks, TCI and Time Warner cable operators will receive 10% of the WeB’s ad sales revenues off the top. For carriage anywhere else on the systems, TCI and Time Warner will receive 7% of ad sales. The rest of the revenues will be split between the WB and the local station partner that handles ad sales.
The agreement also calls for extensive cross-promotion between the local station partner, the WeB and the cable system.
Both the local station and the WeB will be expected to expend 250 gross rating points (GRPs) per week promoting one another, and each promo will mention the cable system.
The WB’s rival netlet, UPN, is not planning to turn to cable to boost its distribution in smaller markets, but will instead look to buy or affiliate with low-power TV stations and other broadcast outlets.
(Jenny Hontz in Hollywood contributed to this report.)