Turner option: Open wallet to expand CNNfn

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In a shift aimed at increasing the value of CNNfn, Turner Broadcasting System executives may resort to boosting distribution of the network by paying local cable operators to carry it.

The move would mark a first for Turner which, with its fleet of cable channels ranging from CNN to TNT to Cartoon Network, has never had to offer payments to multiple system operators in exchange for carriage. Other media companies have employed the strategy to expand reach for networks with a goal of attracting more ad dollars.

A media buying executive said the possibility of the CNNfn pay-for-play plan arose in a recent discussion with the CNN News Group sales staff where the network was being touted along with other properties in that portfolio. The general message: AOL Time Warner is committed to the network and will leverage the resources-both financially and structurally-of the conglomerate to embark on a challenge to General Electric Co.'s CNBC.

"They [said] that they have a good brand and the dictate in the new company was that it was undervalued and they would spend what they needed to spend to make it work," the executive said.

A spokesman for Turner said "there are no such plans at this time" to pay for distribution. The network, carried in about 17 million homes-as compared with CNBC's 75 million-plus homes-will be relaunched as CNN Money later this year, and it may be hard to capitalize on that hoopla without increased availability.

"If you don't grow it now, when are you going to do it?" said Bob Igiel, president-broadcast division of WPP Group's Media Edge, New York. "That relaunch has to work."

Payments to operators are not the only option along those lines. AOL Time Warner could work to boost availability by improving synergy between Turner and its Time Warner cable operations so CNNfn would be offered on Time Warner systems where it is not yet carried.

AOL Time Warner could also elect to grow CNNfn's distribution, albeit more slowly, through the continued rollout of digital cable, in which local cable operators able to carry only some 65 channels would perhaps be able to double that number. The number of homes with digital cable is growing by about 1 million every quarter and every cable home should have access to digital offerings by 2003, according to the National Cable Television Association. Of course, with so many channels offered on digital platforms, less-popular networks may have even greater challenges in building viewership.

Since it is carried in only 17 million homes, CNNfn is not rated by Nielsen Media Research, something many advertisers require before they will buy time. TBS networks CNN, TNT and TBS are all in 80 million-plus homes. AOL Time Warner may face similar issues regarding distribution growth of its CNNSI network.

CNN MONEY

One of the first announcements the newly merged AOL Time Warner made in January was that CNNfn would take on the name of CNN Money-a moniker that fuses two company brands, CNN and Money magazine. TBS executives believe they can challenge CNBC with a focus on personal finance and small business coverage after the market closes, opening up potential synergies with other company brands such as Money and Fortune magazines and the AOL Personal Finance Channel. CNBC shifts to news and political talk shows after the closing bell.

TBS further demonstrated its commitment to business news when it brought Lou Dobbs back to host CNN's "Moneyline" last month. Mr. Dobbs assumes those duties this week.

As much as Ted Turner's status as a cable legend is unassailable, his biggest regret may be leaving an opening for CNBC. GE saw the opportunity for business-news-centered channel in 1989 and rode the recent stock-market boom to huge advertising profits.

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