Assignment Is for Launch of New Satellite Service

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NEW YORK ( -- New York-based Cablevision Systems has confirmed it awarded the launch of its new satellite service to Interpublic Group of Cos. Spending on the account has not been determined at this stage, executives said.

The cable giant, which has a variety of potential business plans under consideration, said spending would be a "fraction" of a reported $100 million figure, according to executives close to the negotiations.

Executives claimed that Interpublic's

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$100 Million Assignment Is for New Satellite System
Lowe, New York, will become the lead creative agency. Sibling Weber Shandwick will handle public relations, digital responsibilities will go to R/GA, while event activities surrounding the system's late third-quarter 2003 launch will be handled by Jack Morton Worldwide. Entertainment marketing agency Bragman, Nyman Cafarelli, Beverly Hills, Calif., was also part of the win, along with research firm NFO WorldGroup, which is currently being sold by Interpublic to Taylor Nelson Sofres.

Looking for new name
The new satellite service has the working name Rainbow DBS, but an executive close to talks said Cablevision is brainstorming for a new name.

Interpublic's Draft was not part of the review; instead the holding company is creating a new direct marketing entity, D3 Connect, to specifically handle Cablevision's business. Rainbow DBS is the second satellite network to be handled within Interpublic. Deutsch, Los Angeles, handles Hughes Electronics' DirecTV.

Interpublic agencies pitched against WPP Group, which fielded a team from J. Walter Thompson, and Omnicom Group's TBWA/Chiat/Day, New York.

Previous delays
Cablevision in its 10-K filing said it did not expect to commit more than $80 million to the Rainbow DBS project in 2003, perhaps indicating that some of the marketing spending is slated for 2004. Cablevision had previously delayed the satellite project and as late as March said it was still evaluating whether it would be a national or local venture. The company now has until the end of 2003 to launch the service or risk losing its FCC license. The satellite service's selling point is that Rainbow will carry high-definition TV programming.

However, Raymond Katz, senior managing director of equity research, at Bear Sterns, said the general investment community was against Cablevision entering the satellite market, which is already dominated by DirecTV and EchoStar Communications' Dish Network.

"Cablevision has given precious little information about this project," Mr. Katz said. "We in the investment community don't like the idea because they are going to lose a lot of money. They are third in the market, it's not new and they're not going to be able to persuade people to switch. I'm rooting for it not to happen."

Rival services
DirecTV is the leading satellite network in the U.S. with 11.2 million subscribers stretching across Latin America. News Corp. is currently acquiring the service from Hughes Electronics, part of General Motors Corp. Dish Network, owned by EchoStar Communications, has 8.1 million subscribers and is handled by Havas' Euro RSCG MVBMS Partners.

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