Tele-Communications Inc. Chairman-CEO John Malone last week proposed a radical concept that could have a major impact on TV ad rates in the digital age.
Mr. Malone has offered to multiplex the signals of ABC, CBS, NBC and Fox affiliates once they have been digitalized for high-definition TV. So for TCI subscribers, a show such as NBC's "ER" might be shown on two channels at different times.
Ad rates, according to Mr. Malone, could then be based on the combined rating of airings.
"The idea has a lot of merit," said one top broadcast network executive. "Especially with continuing erosion, if we can bump some of our ratings by `cuming' them, and get a higher price, that's a winning scenario."
"It's a very interesting concept," said Steve Sternberg, senior partner-director of broadcast research, TN Media, New York. "Part of the problem they'd have in raising rates based on a [cumulative] rating is that we'd need to be able to estimate those ratings, and we'd need at least a year's worth of data to do that."
DIGITAL LEVEL OF SERVICE
Mr. Malone's proposal, recited to reporters in Atlanta last week at the annual convention of the National Cable Television Association, would put the network broadcast signals in a digital level of service that would have a total of 12 channels and be offered to subscribers for a yet-to-be-determined price.
Local broadcasters would share in the subscription revenue.
FREE HDTV SIGNAL
To offset government objection to the plan, broadcasters would offer their HDTV signal free over-the-air.
"The only question is whether the broadcasters have the guts to propose this to the guys in Washington," Mr. Malone noted to the reporters.
A spokesman for U.S. Rep. Billy Tauzin (R., La.), chairman of the House Telecommunications subcommittee, said time-shifting could prevent problems if an affiliate's newscast is run opposite a hot prime-time show.
But the spokesman said the issue is not one Rep. Tauzin is particularly concerned about.
The exact format broadcasters choose for their HDTV transmission is a controversial matter still to be resolved.
Contributing: Ira Teinowitz.
Copyright May 1998, Crain Communications Inc.