Fox Business Network Launch Costs NBC Universal

Sources: NBC U Paid Time Warner Cable $3M to Move Its Cable Networks Down the Dial in New York

By Anne Becker & Jon Hemingway -- Broadcasting & Cable, 9/7/2007 5:48:00 PM

Fox Business Network landed its new slot on Time Warner Cable New York, prompting NBC Universal to plunk down a bucket of money to move its own cable networks down on the dial.

According to executives familiar with the matter, when Time Warner decided to give FBN its new slot -- channel 43 starting with the channel’s Oct. 15 launch -- the operator told several cable networks they could either pay to keep their prime slots or forfeit them.

NBC U paid up to $3 million to get its cable networks carried on lower channels, clustered around its own business channel, CNBC, which inhabits channel 15, the sources said. This kept CNBC separate from FBN on the dial, while MSNBC moved from channel 43 to channel 14; USA Network from 40 to 16; Sci Fi Channel from 44 to 17; and Bravo from 38 to 18.

NBC U declined comment on the matter. But it’s likely that the company wanted both the distance between CNBC and FBN, as well as the prime channel slots for its other networks -- especially important in Manhattan, home of its Madison Avenue advertising clients.

But don’t expect a domino effect with FBN’s arrival displacing channels in other markets -- Time Warner said the new channel will get standard cable carriage in New York only and digital carriage on its systems elsewhere.

As for the vaulted channels in New York -- ABC Family moves from channel 14 to channel 38, A&E Network from 16 to 46, The History Channel from 17 to 40 and Discovery Channel from 18 to 66 -- the reaction appeared mixed.

While Discovery declined comment, A&E Television Networks, which owns A&E and History, didn’t seem miffed, based on a statement from a company spokesperson: "A&E and The History Channel are the gold standards in television brands. We are confident that our loyal viewers will continue to seek out our quality programming.”

Exact channel placement is actually of diminishing value to cable networks right now, as more viewers navigate to channels by scrolling through sophisticated on-screen displays, rather than simply clicking up the dial channel-by-channel.

“I think in this day and age, being lower or higher isn’t as important as the neighborhood,” said Henry Schleiff, president and CEO of Crown Media Holdings, parent of Hallmark Channel. Hallmark recently negotiated to be moved from channel 107 to channel 84 on Time Warner, placing it close to Turner Classic Movies, TV Land and HBO. “It is very important to be around networks like yours,” Schleiff added.