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Analog PPV System to Pay Guarantee

5/16/1999 8:00 PM Eastern

At least one analog-based pay-per-view cable system will
pay an upfront guarantee for the opportunity to distribute a Columbia/TriStar movie title
in an early PPV window.

Media General Cable of Fairfax County, Va., will join
DirecTV Inc. and TVN Entertainment Corp. in paying a guarantee of 10 percent to 13 percent
to air Columbia/TriStar's Stepmom in June, 28 days before the rest of the PPV
industry.

The guarantee for Stepmom, which generated $91
million in box-office revenue, is about one-half of the 22 percent guarantee
Columbia/TriStar asked for on several prior early window titles.

At 22 percent, it's nearly impossible for limited
analog-PPV-channel systems -- which typically generate buy-rates of only about 1 percent
to 2 percent on movies -- to make money.

But with buy-rates closer to 10 percent, Media General,
with eight stand-alone PPV channels, was willing to take the guarantee.

While Media General officials would not comment on specific
licensing fees, they did confirm that the rate for Stepmom was lower than those for
previous titles.

System PPV manager Ted Hodgins said offering the early
window would allow Media General to effectively compete with direct-broadcast satellite
services, which have traditionally taken advantage of the early movie window.

"We'll now have it at the same time as our
competition," Hodgins said. "Here's an opportunity for us to put our money
where our mouths are."

Representatives from Columbia/TriStar could not be reached
for comment at press time.

To help sales, the 240,000-subscriber system will reduce
the price of the movie from $4.99 to $3.99, Hodgins said.

Viewer's Choice -- which paid a 22 percent guarantee
for early window rights for Buena Vista's The Waterboy -- will not ante up the
lower fee for Stepmom, sources close to the situation said.

Representatives from the network could not be reached for
comment at press time.

TVN will also pay the guarantee, but it will only offer the
early window to its digital subscribers.

 

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