So Bert... If two huge media companies cannot launch successful broadcast television networks, what make you think that local broadcasters can attract viewers with local content and/or re-runs in the DTV multiplex? Enquiring minds want to know... Regards Craig P.S. And how do DTV broadcasts appeal to the next generation of TV viewers, who - according to this story - "are increasingly tuning out of television altogether." Can they view them on their Video iPODs? http://www.forbes.com/2006/01/24/cbs-viacom-aol_cx_pak_0124network.html?partner=media_newsletter Media Ready For Prime Time Peter Kafka, 01.24.06, 6:30 PM ET NEW YORK - Can two mediocre broadcast networks make one decent one? That's the bet CBS and Time Warner are making by combining their UPN and WB networks. The logic, according to the two media giants, is that the combined network, to be called The CW, will be able to attract the famously elusive youngsters who are increasingly tuning out of television altogether. And while the broadcast business has big problems in general, and the joint venture faces some particular stumbling blocks--for instance, who's really going to steer the 50/50 operation, CBS's Les Moonves or Warner Bros.' Barry Meyer?--there's actually a decent chance the merger could work for both sides. The big picture is clear enough: Both networks, launched in 1995, have gone after younger viewers, and both have failed. Both are also money losers--The WB lost Time Warner $55 million last year, and CBS lost about $20 million on UPN, Deutsche Bank analyst Dough Mitchelson estimates--and neither has a show among Nielsen's top 20. But both have had some success with shows targeted at young 'uns: UPN's Everybody Hates Chris, for instance, and The WB's Gilmore Girls. Combine the two, and you may be able to make a run at the big four of CBS, News Corp.'s Fox, General Electric's NBC and The Walt Disney Co.'s ABC. "The notion of a fifth network is absolutely viable," said Bruce Rosenblum, president of Warner Bros.' Television Group. That would likely be true no matter who was behind the fifth network in question. Just by reducing the number of broadcasters by one, the merger shrinks the inventory of prime-time advertising slots, which should boost prices across the board, notes Media Metrics analyst Laura Martin. But there is additional appeal for the two partners. Both have strong studios--Warner in particular--that benefit not only when they place a show on their own networks, but also when they can resell the same show in syndication, on DVD or on whatever digital format consumers end up adopting down the road. Combing the networks gives both a better chance of getting their shows on the air to begin with, and the two sides have already worked out an agreement that lets them split revenue from any show either studio places on The CW. And while media mergers and joint ventures are notoriously tough to pull off--Time Warner's Richard Parsons is still trying to sort through the wreckage of the Time Warner-AOL deal, while Sony Corp. and Bertelsmann are in the midst of a very public squabble about their combined music operation--here the two companies are a better fit than most. For starters, both are coming from pretty equivalent positions of power. And the four executives who will be overseeing the whole operation have all spent time together without breaking into public acrimony: Moonves, Rosenblum and CBS's Nancy Tellem all worked at Lormiar Television together, and Meyer worked with all three at Warner. It's also probably not a coincidence that the deal was put together by two corporate parents under particular pressure to dazzle shareholders. Moonves needs to show investors that Sumner Redstone's move to split Viacom into two different stocks will pay off by letting him strike inventive deals. And Parsons, in particular, needs to convince his investors they're better off sticking with him and tuning out to rabble rouser Carl Icahn, who wants to break up Time Warner. A new network won't do that by itself. But it's a start. ---------------------------------------------------------------------- You can UNSUBSCRIBE from the OpenDTV list in two ways: - Using the UNSUBSCRIBE command in your user configuration settings at FreeLists.org - By sending a message to: opendtv-request@xxxxxxxxxxxxx with the word unsubscribe in the subject line.