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Networking: Distribution Deals … Jewel of the Dial … Compromising Position

<CS:BOLD></CS><STRONG>DISTRIBUTION DEALS</STRONG>: Home Shopping Network is lining up new subscribers despite the cable capacity crunch.<BR><BR>HSN signed an agreement with Tele-Communications Inc. that will bring Home Shopping Club into 500,000 new...

DISTRIBUTION DEALS: Home Shopping Network is lining up new subscribers despite the cable capacity crunch.

HSN signed an agreement with Tele-Communications Inc. that will bring Home Shopping Club into 500,000 new TCI households with incentives to add HSC to new TCI homes rapidly. The deal also involves an existing 4.8 million must-carry and non-must carry homes. Since HSC is aired both on cable TV and UHF stations, it falls under the Federal must-carry rules, which stipulate that cable operators are obliged to carry all broadcast stations with signals in their area.

Those rules are part of the Cable Act of 1992, which has been challenged by a group led by Turner Broadcasting. The Supreme Court is expected to rule on it by July.

HSN has also renewed an agreement with Continental Cablevision for 3 million subscribers, and agreements with nine other cable operators, representing over 4 million subscribers.

Value Vision, the Minneapolis home shopping network, is also trying to use must-carry rules to gain distribution. According to Mark Payne, the company’s chief financial officer, Value Vision is purchasing broadcast stations on which it plans to air its home shopping programming. “If must-carry legislation is upheld, we’ll have stations that have the benefit of must-carry privileges,” Payne said. “It’s a way to guarantee your distribution.”

JEWEL OF THE DIAL: Kenneth Jay Lane will be the first American designer to appear on QVC-The Shopping Channel when he tapes a program on June 23. The Shopping Channel is QVC’s joint venture with British Sky Broadcasting in the U.K.

Lane is no stranger to the U.K. He has three shops in London — the first of which opened in 1967.

Lane recently had his third anniversary show on QVC. In the three years he has been appearing on the shopping network, he has sold over $20 million worth of jewelry, he said.

COMPROMISING POSITION: Home shopping networks are still grappling with the issue of working with retailers, which until now has meant splitting one profit margin. According to Doug Briggs, president of QVC Electronic Retailing, compromise is the only feasible solution.

“There has to be some other type of synergy,” said Briggs. “We’re now doing monthly shows with the Warner Bros. Studio Stores. We liked the association with Warner Bros., and they liked the association with QVC.

“They like the advertising benefit and awareness that we’re building,” he added. “We’re each able to compromise on the margins. Neither of us is making much money.”

In the case of Saks Fifth Avenue, neither side will say whether Monday night’s show on QVC was the last. The show marked Saks’ first anniversary in the home shopping arena.

“We have no plans at this point for additional programs,” said Philip Miller, chairman and chief executive of Saks. “We are still in discussions with QVC.”