ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Wednesday, May 8, 1996 TAG: 9605080014
SECTION: EXTRA PAGE: 2 EDITION: METRO
SOURCE: GERALDINE FABRIKANT N.Y. TIMES NEWS SERVICE
Hundreds of new cable services are on the drawing boards, from the privately owned My Pet TV and the Love Channel to Nick at Nite's TV Land and News Corp.'s Fox News Network. The owners of these services have been banking on the arrival of the digital boxes that would let cable operators offer 500 channels.
But the digital boxes have been late to market. ``They are coming, but we are not looking at tens of millions of them out there,'' said Larry Gerbrandt, a cable programming analyst at Paul Kagan Associates. ``Most people think it will be three to five years before there is real critical mass.''
That means new channels only become available when cable systems drop an existing service or improve their technology. ``This is not the glory days of the 1980s, where operators were paying you to go on their systems,'' Gerbrandt said. ``The industry has gone from operators paying the networks to situations where the networks sometimes pay the operators for carriage.''
Several cable executives, who insisted on anonymity, said that News Corp. was offering cable operators as much as $10 for each new subscriber to get cable to carry the Fox News Network. ``We are having discussions with several operators and we will not comment on the talks at this time,'' said Brian Lewis, a Fox spokesman.
Not every company is going to wait for digital boxes to arrive. For example, Discovery Communications Inc., which provides the Discovery Channel and the Learning Channel, plans to introduce its Animal Planet Channel on June 1. The service will carry pet shows, feature films and syndicated shows.
Discovery Communications acknowledges that it has no idea how many subscribers Animal Planet will be able to attract.
``We have had this channel on the drawing boards for two and a half years,'' said Jim Boyle, a spokesman for the company. ``In that period, digital boxes have constantly been three years or more away. But we are tired of waiting. At least if we launch, our distributors can see our product, and we believe we will have limited distribution. Hopefully by the fall, we will have a service that has started to prove itself with operators.''
Discovery chairman John Hendricks said his company wanted to introduce Animal Planet in June because cable operators generally raise their rates twice a year, and it would be easier for them to do so if they had more services to offer.
Despite the shortage of channels, it is worth a larger company's effort to create a new service, he said. ``We are facing continuing fragmentation,'' Hendricks said. ``If there is a small cable system, it is a victory to have one of its channels,'' but if a system has 100 channels, a company that makes cable programming wants to have as many offerings as possible.
Like other programmers, Hendricks is convinced that he needs as many channels as possible to protect Discovery's leverage with cable operators. ``The name of the game is shelf space,'' he said. ``If an operator is going to add channels, we have to be there.''
That might explain why Viacom Inc., the parent of MTV, Showtime, and Nickelodeon, is starting Nick at Nite's TV Land, and why Capital Cities/ABC, a unit of Walt Disney Co., and Hearst Corp., which own Arts and Entertainment, have created the History Channel.
Most of these services are simply spinoffs of existing services. ``It is easier for spinoffs because they can control their costs,'' said Dennis Leibowitz, an analyst at Donaldson, Lufkin & Jenrette.
That is in part because the companies can turn to their existing sales and marketing staffs to begin selling the new services.
``On a stand-alone basis, it will be very tough for individual services to get started,'' Leibowitz said.
That has not dissuaded dozens of entrepreneurs from trying their luck. My Pet TV, which is owned by the Los Angeles-based Nightwing Entertainment Co. and has an alliance with the Humane Society, hopes to make its debut in September.
Marcovsky said he hoped to raise $10 million for the service and was talking not just to cable operators but also to direct-to-home programmers. Because such companies, like DirecTV, offer only national services, they might have capacity available for new entries. And as Marcovsky put it, ``Dogs and cats travel.'' He is hoping they travel abroad as well.
The Love Channel is dedicated to ``educational programming and self-esteem and self-improvement done in an entertaining format,'' its president, Josephina Gamundi, said. She is hoping to raise $3 million for her project.
Some experts doubt that such services have much chance in a media world that is constantly consolidating.
``Some of the weaker services will combine,'' Hendricks said. ``A Time Warner or a Turner Broadcasting can support five or six services. In the end, just as you have four or five major broadcast programmers, you will have that number of major cable programmers.''
LENGTH: Medium: 87 linesby CNB