VH1 Web Site Gears for E-Commerce

VH1, a unit of Viacom Inc.'s MTV Networks, is preparing to
launch an e-commerce capability for its online VH1.com unit this fall.

The Web site will offer shoppers the ability to purchase a
wide range of music-related products online, from concert tickets to compact discs.

Perhaps the most intriguing aspect of this initiative will
be the development of an auction capability -- a sort of musical eBay Inc.

These offerings will be implemented under the leadership of
Fred Graver, senior vice president of VH1.com, who joined the company two months ago after
a research-and-development stint as an executive producer at Disney/ABC Cable Networks.

Graver said the site will be redesigned from top to bottom,
and he will be open to all ideas. "Anybody over the age of 25 is probably my
audience. Anything that they can think of that would be helpful is everything I'm thinking
of," he added.

Graver sees VH1.com's role as a "trustful, reliable
entertainment source" to keep people in its core demographic, who are making the
transition into responsible adulthood, connected to music.

"In a meta sense, we will be able to help you keep
your connection to music," Graver said. "We have an audience with lives, jobs,
memories and credit cards."

His goal is to get people to check in with VH1.com for five
to 10 minutes at a time, two to three times per week, to order concert tickets or to put
in advance orders for new CDs that are slated for release.

VH1.com is currently linked to online music retailer CDNOW
Inc. The two entities are involved in a cross-promotion for VH1.com's "100 Greatest
Women of Rock" feature.

As for the auction component, Graver said it will probably
be housed within the overall site, but the company is also exploring the possibility of
linking to an established auction site. He declined to divulge the identities of any
potential partners.

Graver believes music lovers are an ideal segment to latch
onto an auction site. "Our audience has stuff like ticket stubs, memorabilia and old
CDs that they don't listen to. I want to offer people a chance to exchange those
memories," he said, adding that the auction site will also have an on-air presence on

"Entertainment companies are well-positioned for
e-commerce on the Internet. These are product-driven fulfillment businesses, and they have
the infrastructure in place to succeed," SG Cowen Securities Corp. analyst Gary
Farber said.

VH1 has been given much credit in the past couple of years
from cable operators for evolving its programming base, which consists increasingly of
original programming such as Behind the Music, Storytellers and Where Are
They Now?

The network'sprimetime ratings saw a 25 percent
jump in the first quarter of 1999, to a 0.5 from a 0.4 during the same quarter last year,
according to Nielsen Media Research.

VH1.com's e-commerce thrust is a part of a larger corporate
undertaking at MTVN to increase and improve its online presence -- an effort that has been
referred to as "The Buggles Project."

This renewed commitment to the Internet has resulted in the
planned emergence of "QWERT," a new MTV Online brand positioned for people with
more specialized musical tastes that are not covered under MTV: Music Television and VH1.
This would include such esoteric genres as classical music and bluegrass.

QWERT is, for now, only an online initiative, and there are
no plans for it on the video side. It is slated for a soft launch later this summer.