THE ABCS OF A NETWORK STRATEGY ONLINE AREA IS A FIRST STEP IN PLAN TO PROVIDE NEW-MEDIA CONTENT

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Since its formation earlier this year, the Capital Cities/ABC Multimedia Group has been biding its time as it defined what role the leading video entertainment company will take in interactive media.

Last week, it offered the first glimpse with ABC Online on America Online.

The online area made its debut Oct. 11, the last of the Big 3 network online services to be unveiled, but probably the most sophisticated to date. ABC is breaking its programming brands into distinct groups: ABC Prime Time, ABC News, ABC Sports, ABC Daytime, "Good Morning America," ABC Radio, ABC Classroom and Audience Information.

What it doesn't have, that both CBS' Prodigy and NBC's AOL areas do, is advertising. Not yet, anyway.

Advertisers have shown interest in the services, but Cap Cities/ABC plans to offer ad programs later, most likely in early 1995. That's by design, said Stephen Weiswasser, president of the multimedia group.

"Now that we are up, we will focus on sharpening the product and expanding it," he said. "But we are an advertiser-supported business and this is a natural advertising medium if done right."

The service will probably be sold as a stand-alone buy to advertisers and in packages with other Cap Cities/ABC media.

"If we have major advertisers interested in soaps and we're putting our soaps online, then it makes sense for those advertisers to be there," he said.

Cap Cities/ABC will get a percentage of subscriber usage fees and money for every AOL subscriber it attracts, plus ad revenues.

Mr. Weiswasser said the service is budgeted to break even in its first year, despite the fact that Cap Cities/ABC has dedicated 12 staffers to the service.

But he said the focus initially is not on profits. "If we learn something from this but don't make any money, that's okay. If we make money, but don't learn anything from this then there is no reason for us to do it."

The AOL effort is part of Cap Cities/ABC's plan to become "the content providers for a whole array of interactive communication services that don't currently exist," Mr. Weiswasser said.

"A decade from now, the majority of American TV will basically be what it is today. There will be some new bells and whistles, but there will be a segment of the population that will be more affluent and better educated that will want more than that. We want to have our linear network cake and eat our interactive, too," he said.

Cap Cities/ABC's multimedia group is pursuing a variety of other interactive media endeavors, including video-on-demand tests, CD-ROMs and place-based media.

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