New Nets: Launch Digital Now, or Wait?

With major apologies to Shakespeare: To be, or not to be,
for just a little while longer -- that is the digital question.

Is it smarter to suffer slinging away an outrageous fortune
while helping to accelerate the digital industry's growth, or to sit out the sea of
financial troubles and wait for more digital homes to end it?

Now, the Cliffs Notes translation: Is it worth launching a
digital network in the current climate, thereby speeding up the pace of new digital boxes
into homes, or is it smarter to save money and wait for this new arena to become better

It seems to depend on whom you ask. Some are plunging
ahead, hoping that as pioneers, they'll encourage consumers to try digital while cementing
relationships with MSOs.

But several other networks have announced plans to launch
digitally, and they are hanging back, waiting for more potential viewers. That's a
variation on the old tree-falling-in-the-forest adage: If a TV network is launched
digitally but it can't land in anyone's home, it won't really make a sound.

World Cinema Network is an example of a network in
temporary limbo. This foreign-film channel from Bravo Networks, which has done quite well
with such fare, was announced back in the fall of 1997. From the beginning, corporate
parent Rainbow Media Holdings Inc. declared that it would wait until cable operators had 1
million digital boxes in viewers' homes.


In April, Rainbow president and CEO Josh Sapan said he
expected the requisite number of digital converters to be in viewers' homes by the third
quarter. Now, however, World Cinema presents a different picture. "We don't think
that [plateau] will be reached until the end of this year or the beginning of next
year," spokeswoman Kim Becker said.

While Becker said the company "absolutely believes in
the technology and the future of digital networks," the network has not veered from
its initial game plan. "It isn't worth it for the company until the boxes are in more
viewers' homes," she added.

Therefore, she said, "We can't give a launch time
frame yet." And even though she is confident that the network will have launched by
the end of 2000, she added, World Cinema "won't even take the next steps toward
moving forward until next year."

American Movie Classics, another subsidiary of Rainbow
(which is controlled by MSO Cablevision Systems Corp.), presents itself as being more
aggressive in launching its digital network, AMC's American Pop! But while it launched a
Web site and broadband network in May, it, too, is really sitting around waiting.

American Pop! will include old movies, TV series, shorts
and newsreels. But it will differentiate itself with interactivity for viewers and
programs and other material on pop culture.

Old cereal commercials will accompany the serials; Five
& Dime Store
will go to antique shops, flea markets and the like to dig up Elvis
memorabilia and Tonka Trucks; and Pop Docs (documentaries) will take on monster
movies, cola wars, TV dinners and other bits of Americana.

American Pop! is already running 15-minute episodic
broadband entertainment, delivered in full-motion over cable modems and the Web, with an
eye toward adapting those to 30-minute versions for digital cable.

"It is more of a creative challenge to marry all three
platforms," AMC Networks president Kate McEnroe said. She wants viewers to have all
of the information at the click of a button on the TV set-top, without having to go back
and forth from the television to the computer. "It is quite a logistical nightmare
here, but for the viewers, it will appear seamless," she added.

McEnroe said the interactivity and Web aspects are pivotal
to digital success. "The thing operators most want to hear is that this is not just a
television network anymore, but a branded body of content across all platforms," she

McEnroe added that for digital to ultimately make it beyond
the first 20 percent of penetration, at least 10 "highly interactive" networks
must be offered to drive subscribers.

American Pop! will also be easy for affiliates to customize
because, McEnroe said, "co-branding on a local level is what this industry is all
about right now."


LaRae Marsik, vice president of media relations for
AT&T Broadband & Internet Services, agreed. "What we look out for most is
content value to our customers. We are not into rebroadcasting analog fare," she

But while American Pop! can boast of being the first
enhanced entertainment network on the Internet, it will probably not be able to fulfill
its prediction that it'll be "the first digital entertainment network to offer
'convergence programming' -- unified content for the Web, broadband and digital-cable

That's because its digital-debut date is still not etched
in stone. This past spring, McEnroe said its digital launch would come in the fourth
quarter. But she added that American Pop!, conceived in late 1997, was always intended to
be offered along with new General Instrument Corp. "DCT-5000" set tops from
Cablevision New Media to provide convergence.

Since the arrival of those new set-tops has been pushed
back from the fourth quarter until the first quarter of next year, she said, the digital
rendition of American Pop! will have to wait, too.

When asked if American Pop! would wait longer if the
Cablevision set-tops experience further delays, she said, "We are confident that
Cablevision will be ready in the first quarter. We are firm on it." (Curiously, she
said she expects World Cinema to launch at around the same time as American Pop!, despite
Becker's comment that World Cinema is proceeding at a slower pace.)

In the long run, the delays might be forgotten, since
McEnroe said that within three or four years, she expects to see digital set-tops in 35
million to 40 million homes, mostly in urban areas.


Still, other networks said they don't want to wait for
digital boxes.

After earlier delays, Do-It-Yourself from Scripps Networks
now expects to be up and running Sept. 30. Although no deals have been finalized yet,
Scripps firmly believes that DIY will help to drive penetration.

Scripps, which will reportedly invest $15 million over the
next few years, expects to break even on DIY within three to five years.

DIY -- which hopes to utilize enhanced on-screen technology
to provide step-by-step instruction by next year -- will draw from Scripps-owned Home
& Garden Television and Food Network for some programming -- how-tos on topics like
gardening, home repair, crafts and decorating -- and promotional opportunities. But it has
promised affiliates that 40 percent of its programming will be original fare.

Perhaps most ambitious and least hesitant of all is Fox.
Fox Family Channel is launching two digital networks simultaneously Oct. 31 -- boyzChannel
and girlzChannel, with programs for boys, girls and parents.

Not waiting was the right move, judging by response to the
network's Web sites -- and, which launched June
14. received 10 million hits during the first two weeks, according to Fox Family president
and CEO Rich Cronin.

"These are really big ideas, and we wanted to launch
them before someone else," Cronin said. "With the mood of the country, there is
concern about what's going on with kids and how to raise them."

Cronin's projections weren't as rosy as McEnroe's. Fox
foresees digital being in 15 million to 30 million homes in five years. "It's not
going to grow that quickly," he said, adding that there would probably only be
affiliate revenue until digital reaches 20 million homes because advertisers won't find it
worth their while until then.

But launching now was important for the future of digital
and for Fox's place in that world, he added. "We want to be partners with our
affiliates, and they want to roll out digital boxes as quickly as possible," he said,
explaining that he thinks boyzChannel and girlzChannel will be significant penetration

While other programmers, like USA Networks Inc., have said
that they'll wait for the digital environment to improve before jumping in, Cronin said,
"We feel that the affiliates will appreciate our entry."


One reason for this appreciation is the fact that Fox can
create consumer demand by cross-promoting the digital channels on Fox Family, which
reaches 75 million homes, and on the Fox Kids Network broadcast outlet, which is in 98
million homes.

The networks -- which program in blocks aimed at two- to
five-year-olds and six- to 14-year-olds during the day and at parents at night -- will
feature 25 percent original programs and 60 percent exclusive shows. "Our library is
growing all the time," Cronin said. "We have Fox Kids networks around the

The acquired programs include Silver Surfer and Jim
for boyzChannel and Tabaluga and Princess Sissi for girlzChannel.
The latter will also feature an original series, Breaker High, about high school
aboard an ocean liner.

But for now, most of the original programming is
issues-oriented: girlzChannel girlz is hosted by girls, and it will feature
interviews and in-studio discussions, while boyzopolis will be a roundtable of boys
hosted by a child psychologist.

Additionally, there will be original programming at night
for parents -- Parentz 101 on both networks, featuring discussions on how to
encourage interest in everything from music, to math, to volunteerism; and Bringing Up
and Guiding Girls, which will delve into issues like attention-deficit
disorder for boys and eating disorders for girls.

And there will be an acquired show, What Every Baby
, hosted by renowned pediatrician Dr. T. Berry Brazelton.

The programming is being developed "hand-in-hand"
with the Web sites (, and gbSpace, where
boys and girls meet), Cronin said.

Fox is using the Web sites to ask boys, girls and parents
which issues they want discussed and specifically which information they'd like to share
or hear more about. After the shows run, viewers will be referred back to the Web sites
for additional sources and information.

With all of that original programming, Cronin said,
"We certainly deserve a higher affiliate fee than the multiplexes," although he
wouldn't release specific details of current negotiations.

These programs are appealing to MSOs not only because they
are original shows that set the networks apart from multiplexed offerings, Cronin said,
but also because parenting is such an important issue. "The affiliates respond to the
positive, pro-social element. It's really important for them as good corporate
citizens," he added.

In the absence of Nielsen Media Research ratings, the Web
sites will also be used as focus groups to determine which of the acquired programs are
popular and which aren't. "They will be very much fan influence," Cronin said.
"We want to give our viewers the sense that they're helping to build the

Stuart Miller

Stuart Miller has been writing about television for 30 years since he first joined Variety as a staff writer. He has written about television for The New York Times, The Washington Post, the Los Angeles Times, The Guardian, The Boston Globe, Newsweek, Vulture and numerous other publications.