TW Cable exits ad co-op

NY Interconnect looses cabler under sales stance

NEW YORK — Barring last-minute breakthroughs, which neither side expected, Time Warner Cable will have withdrawn from the New York Interconnect on Sunday over the issue of whether cable advertising in New York’s Designated Marketing Area should be for sale only for the entire region or purchasable in any combination of four zones.

TWC’s stance is that the New York Interconnect — an advertising co-op owned by the Rainbow Advertising Sales Corp. (RASCO), itself a subsidiary of Cablevision Inc. — should sell cable advertising for the entire DMA. And while such advertising currently accounts for three-quarters of RASCO’s sales, the remaining quarter comes from zoned sales.

RASCO, which until Sunday served all 45 cable systems throughout the New York DMA, defends its practice of offering cable advertising both by area and by zone on two grounds:

– The sheer size of the DMA — 4.5 million subscribers wired into the country’s largest interconnect — makes ad rates prohibitively high to otherwise interested advertisers. For example, Zone 3, encompassing the relevant portion of New Jersey, is bigger than the entire Detroit DMA.

– The geographic reach of the DMA has appeal to some advertisers only when broken up in four parts: New York City; Long Island; New Jersey; and Rockland, Westchester and parts of Connecticut. As one RASCO insider put it, “Why would Volvo New Jersey want to pay for viewers out on Long Island?”

TWC’s response is that RASCO had previously agreed to its request for DMA-only sales but then reneged in early March. “They left us no option but to withdraw,” an insider said.

The impasse, which will require advertisers that want full-market coverage to make two media buys where one previously sufficed, is a setback for local cable operators in their quest to command what they consider a fair share of New York’s lucrative ad market. While the local network TV affiliates divvy up an ad pie of $1.3 billion, cable operators collectively command only $42 million from selling time.

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