Putting the 'I' in Pax TV

Struggling network will change name, sell time

Paxson Communications' announcement that it will morph its Pax TV
network into a new entity called “I” opens up new real estate for
syndicators in search of homes for their programming. But the question remains:
How valuable are these sparsely viewed channels to programmers?

The move also adds another chapter to the bad relationship between Pax
TV and NBC, which owns a third of the family-oriented network.

Paxson President Dean Goodman says the model for “I” (officially it
is in the lower case, without quotation marks) will include programming that
Pax owns and time it will sell to syndicators and other producers.

Already Negotiating?

For example, a small syndicator could buy its way onto Paxson's
60-station national launch pad for a show, then sell all the time in it.

“We are already in negotiations with syndicators and are talking to
producers as well,” Goodman says. “We are looking for both first-run and
syndicated programming and are involved in a number of discussions

During a transition phase that began last Friday, the old Pax TV logo
and the new “I” brands began appearing together onscreen. By the end of the
year, Pax TV will drift away to become its own digital multicast channel on 45
of Paxson's owned outlets.

NBC clearly sees the move as a way to turn Pax into an infomercial
network with a new name.

NBC U: “We continue to disagree”

“NBC Universal was not informed in advance of today's programming
announcement issued by Paxson,” said the company in a statement last week.
“While we have no direct input regarding Paxson programming, we continue to
disagree with the direction Paxson management is taking the company. Our
concern is that Paxson's strategy will erode our financial investment.”

Prior to NBC's discouraging words, Goodman told
B&C, “We are doing what is best for
our company.” He says the move makes its programming more flexible.

But despite reaching 84% of U.S. households, according to the network,
syndication industry executives agree the new “I” will have a very
difficult time attracting decent first-run programming. “That's like the
last place you'd want to go,” says one exec. “You won't get any reach,
frequency or momentum.”

“I” will not sell advertising, so it will be up to purchasers of the
time to recoup their costs. And that's tough.

“I don't see how the economics could work,” says another
syndication exec. “Their distribution is weak to begin with, and the real
problem is using that lineup to sell ad time is putting you in the same place
they are now. They are leasing you their problems.”

Turning Pax TV into a multicast channel is also a risk. There are
currently few digital-TV sets that could receive it, though Pax TV will get
some cable carriage. The reconstituted channel's fate likely depends on the
government requiring cable to carry broadcasters' multicast channels. But
“that will be crucial to the entire industry,” says Goodman, not just to
Pax TV.

Not reducing entertainment fare

Just how the new Pax/“I” model will work isn't clear, though the
new independent channel could conceivably be a home for syndicators that just
want an entrance into a market.

Paxson Chairman Bud Paxson last month said Pax TV wasn't reducing its
entertainment fare in favor of paid programming. He called reports that the
company was reducing or dropping such programming “totally incorrect.”

But Paxson also said last month that “as we approach the new fall
season, the entertainment programs on our schedule may change to allow the
company to give its shareholders a better return on their investment.”

Paxson's defense followed NBC's filing of an arbitration claim two
weeks before. Paxson then complained to the FCC that NBC was trying to
influence its programming and take “illegal control” of the network.
Obviously, the partnership hasn't created one happy family channel.