I just love this part "TV Guide Interactive already has about 1.5 million TCI Digital Cable subscribers."
Date Posted: 3/5/1999
Restoring a once-great franchise
TV Guide's United Video merger may position it to again become a media behemoth
TV Guide, long an American institution, intends to use its $2.5 billion merger with United Video Satellite Group as a springboard for global ambitions.
"In a world where everyone is talking about portals, we believe TV Guide may be the biggest portal of them all," says Anthea Disney, the newly named chairman/CEO of TV Guide Inc. and chairman/CEO of News Corp.'s News America Publishing Group Inc.
Merging with United Video gives TV Guide some powerful allies in Liberty Media and TCI that position it well for a turnaround, say analysts and TV Guide executives. A top executive last week confirmed that TV Guide Interactive is negotiating with TCI to become its exclusive electronic program guide (EPG) provider in the digital cable arena.
TV Guide Interactive already has about 1.5 million TCI Digital Cable subscribers. TCI intends to eventually convert all 10 million of its subscribers to digital, and many cable industry experts expect the overall industry, currently at about 66 million subscribers, will convert to digital over the next two decades.
That robust EPG scenario has cable operators and industry analysts alike drooling over huge ad revenue gains, particularly as channel capacity grows and consumers require more guidance.
"Leo Hindery and TCI believe very much in this brand and our product and I believe we will be successful in negotiating" an exclusive affiliation agreement, says Peter C. Boylan III, executive vice president of TV Guide Inc. Boylan is also chairman-CEO of TV Guide Entertainment Group and United Video Group.
The merger has brought change on the management front: Gary Howard, formerly chairman-CEO of United Video, becomes a director of TV Guide; Boylan, formerly president-COO of United Video, and Joe Kiener, president-COO of News America Publishing and incoming president of TV Guide Inc, as well as chairman-CEO of the TV Guide Magazine Group, become members of the newly created "office of the chairman" and will report to Disney.
In November, TCI reported 1 million digital cable subscribers. It has been adding about 5,000 new digital customers each day.
Seeking to overcome its recent checkered domestic history, TV Guide believes it has an edge in developing into a world power. Along with mixing management gene pools with United Video, it's also capitalizing on the TCI relationship and News Corp.'s global reach--as well as leveraging new magazines, interactive on-screen guides and a presence online.
Perhaps the biggest weapon in TV Guide's arsenal is News Corp.'s various international satellite ventures, which have the cumulative ability to reach as much as 70% of the world's population.
News Corp.'s satellite platforms worldwide "all need interactive program guides," says Kiener. "We will be the partner of choice."
As broad as Rupert Murdoch's international satellite reach is, it's the ability to offer advertisers package deals for exposure in print, onscreen and online that's the key building block in TV Guide's global plans.
"Giving advertisers the ability to saturate multiple platforms--they really can't get that anywhere else," says PaineWebber analyst Tom Eagan.
TV Guide Inc., which replaces United Video as the corporate parent entity, is moving quickly. Two weeks ago, the company announced plans to relaunch its Prevue International portfolio of guides under the TV Guide brand.
The services, which will be called TV Guide Channel, TV Guide Express and TV Guide Junior, reach 2.9 million subscribers in Latin America.
TV Guide, meanwhile, faces substantial challenges domestically. The print version has struggled since Murdoch's News Corp. bought it in 1988. Ad pages and revenues have steadily declined. Circulation has also fallen precipitously, from 17 million to 11.8 million--a drop of more than 30%.
Nonetheless, TV Guide's ambition remains strong. It plans to introduce new magazines and capitalize on its cross-platform reach domestically, says Kiener.
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