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CBS is barely out of the starting gate with its new cable TV channel, but already multiple system operators are complaining about its price.

CBS, which this week is expected to announce its long-awaited entry into the domestic cable TV programming business, is already telling MSOs it wants 15-20 per subscriber, said one cable executive at an MSO.

Operators would probably feel more comfortable with a service costing under 10 cents per subscriber.

Initially CBS was talking about partnering with Discovery Communications for the channel, dubbed Eye on People (AA, July 15), but now plans to use sister unit Group W Satellite Communications for ad sales and distribution to cable operators.


But Eye on People has already attracted the ire of some multiple system operators.

"At those rates, forget it," said an MSO executive. "We're not interested in carrying the service. And I don't think our subscribers will be clamoring for this service."

CBS is looking for the major MSOs to mount the new channel on 75% of their systems, and would like to launch with at least 12 million subscribers, according to the MSO executive, who claimed to have spoken to Don Mitzner, president of Group W and point man in the distribution of the new channel.

But the network wouldn't become a player on the national advertising front until it has millions more subscribers, and then only if advertisers felt Eye on People was delivering an audience it couldn't get at one of the bigger networks.


"The big thing it may have going for it is that it sounds like programming costs will be very low," said one ad agency cable buyer. "So, in turn, if they ask very cheap CPMs they could break through."

Group W will be able to leverage sales of Eye on People with the two other cable networks it manages, TNN: The Nashville Network (owned by Gaylord Entertainment) and CMT: Country Music Television (co-owned by Gaylord and Group W).

For its initial launch, expected by June 30, 1997, CBS will try and leverage retransmission consent through its owned-and-operated stations in Chicago, Detroit, Los Angeles, Miami, Minneapolis and New York, and possibly Salt Lake City.


Currently, CBS lets the cable operators carry those stations for no charge-a process that will continue until January. But after January, CBS insiders said, the network will require agreements from cableMSOs unhappy with CBS operators in those cities to agree to roll out Eye on People as the price for carrying the CBS stations.

Could operators take the heat from viewers if CBS yanked its stations off their systems for not closing a retransmission deal? "Look, CBS isn't in the same league as NBC or even ABC, programming-wise," said the MSO executive. "And they don't have the NFL, like Fox does. Could we take the heat? I think so."


Eye on People will run non-fiction, general information programming focusing on people and personalities with extensive material sourced from CBS' news and sports archives.

The company is also trying to work out a deal with Discovery so some of that network's footage can be shown on the new channel. The target audience is adults 25-54, which mirrors the target audience of the CBS TV network.

Neither CBS nor Group W would comment.

Though CBS hasn't informed affiliates that it has decided to go it alone with Eye on People, general managers at the network's two biggest affiliates, WUSA in Washington, D.C., and KTVT in Dallas reacted favorably. "It sounds like it will expand CBS's share of voice and won't threaten us," said Brian Jones, general manager of KTVT. Echoed Bob Sullivan, general manager of WUSA, "The concept doesn't sound like it will be a competitor to us, and if it builds the CBS brand, so much the better."

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