Networks, Time Warner compete for local affiliates

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NBC, CBS and ABC are all in various stages of developing online "Webworks," using their station affiliates as the backbone for these Internet Web site networks.

At the same time, each network is hitting affiliates with another message: Don't sign on with Warner Bros.' CityWeb online package, because we will soon have one of our own.

Time Warner's Telepictures Distribution will be at NAB as well, meeting with many of the same stations and looking to sign online affiliates for CityWeb in a business model similar to that of broadcast syndication.

At issue are differing philosophies of affiliate/program-provider relations, varying business models and, potentially, millions of dollars in online sales and advertising revenue.


All three networks now have Web sites that link, to varying degrees, to local stations' sites. Although plans are somewhat vague, their new initiatives would present a more organized, network-oriented effort than the hodge-podge of current station sites. Bonuses include new revenues and, in some cases, Web sites for stations that don't have them now.

This differs from CityWeb, which provides content to each station's Web site that doesn't require the user to leave the site.

Although Time Warner brand names like CNN and People magazine will appear, they will take a back seat to the station's call letters and logo, which are always present on the screen.

"We made CityWeb to be an affiliate-centric, network-agnostic model," said Jim Moloshok, senior vice president of Warner Bros. Online.

Among the networks working quietly behind the scenes for an affiliate-based Web network is ABC, which is developing its service around, a new site scheduled to launch in April. ABC has been meeting with its affiliates about the plan for several months.


According to a letter from ABC News President David Westin to ABC affiliates, which has been obtained by ELECTRONIC MEDIA, the service will mix national content from ABC and Disney with the station's localized content.

"We will incorporate your top local headline on the first page of when seen by your viewers, and that local headline will `link' directly to your site, providing you with significant online traffic," the memo states.

National content will include's news, sports information from the "ESPNET Sportszone" Web site and entertainment from ""

One source said ABC is offering the service to stations free of an upfront charge in exchange for 50 percent of the station's local online advertising sales revenues. ABC officials would not comment.

CBS, meanwhile, is eyeing a fall 1997 launch for its Internet effort, ELECTRONIC MEDIA has learned. Sources said the service will evolve from CBS's first two Internet projects--CBS Campaign '96 and CBS Eye on the Net, a Web site which was launched two years ago.

The service will be based upon the network affiliate model and will feature the network's entertainment, sports and news brands along with local station content. CBS officials were unavailable for comment.

The most advanced network in its Internet plan is NBC, which took the wraps off of the NBC Interactive Neighborhood earlier this month. NBC will discuss the plan in detail with affiliates this week in Las Vegas.

NBC officials described NBC-IN as providing a turnkey national online content package targeted to local markets, with no financial commitment from affiliated stations. NBC will provide the content, and stations will promote their own Internet address, with the station brand being preeminent.


"We have a lot more to win by playing as a team than by working as individuals," said Neil Braun, president, NBC Television Network. "The key to our success is the combination of local, local [station] and big, big [network]. Why would an NBC affiliate help a competing brand in their markets?"

Memos from NBC to affiliates obtained by ELECTRONIC MEDIA reveal that the NBC-IN content package will pair local features such as television listings and classified ads with national content such as interactive entertainment provided by "" and news, weather and sports from MSNBC. NBC is planning a summer 1997 launch.

By comparison, CityWeb is available on an exclusive basis to any station in a market, not just The WB Television Network affiliates. CityWeb affiliates get the service in exchange for one 30-second advertising spot a day in the stations' evening newscast, with stations getting local online ad sales revenues and Time Warner getting national online ad revenues. CityWeb is expected to launch this summer.

As the first out of the gate, CityWeb has the advantage of a working prototype already in place, content and technical providers lined up, and a revenue stream--the barter ad time--right out of the box.

Mr. Moloshok is also positioning CityWeb as an alternative to network plans that he said will take computer users away from the stations' Web site to the network sites, much in the way networks are using broadcast affiliates to promote--and rebroadcast current network programming on--their cable channels.

"Every station has to make a decision, do they want to build their own local brand and local business, or the network's brand and business?" Mr. Moloshok said.


But CityWeb faces a major disadvantage as well: If ABC, NBC and CBS can keep their affiliates in line, Telepictures could be limited in the stations it signs on. And Telepictures needs to get the CityWeb into 70 percent of the country for its barter time to pay off.

While most networks had been developing their affiliate/Web plans well before CityWeb came along, the announcement of the Time Warner project did seem to kick them into high gear.

"What [CityWeb] did is accelerate our plans and make us make things concrete sooner," Mr. Braun said.

Just how concrete the network plans are at this point, and how much they are designed to delay affiliates from joining CityWeb, still remains to be seen.

But more alternatives to stations mean more competition, with the stations sitting in the drivers seat.

"I don't know that the networks will slow us down," Mr. Moloshok said, "as much as give stations the chance to negotiate."

Copyright April 1997, Crain Communications Inc.

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