First O.C. Cable News Channel to Debut Sept. 17 : Media: Start-up of TV operation will open another front in the ongoing war between Freedom Newspapers Inc. and Times Mirror Co.

Over the past several months, a cramped suite of rooms in the Orange County Register building here has been transformed into a gleaming warren of sophisticated computer and video equipment.

Walls are lined with new television monitors, videotape editing machines, computer graphics generators and picture storage units. Specially equipped Macintosh computers sit atop every desk. Robotic television cameras survey the studio set.

If all goes according to plan, this expensive ensemble will go live on Sept. 17, beaming an ambitious experiment in local television news to 190,000 Orange County cable subscribers. The service, dubbed Orange County Newschannel, will be the second in the nation to offer 24-hour local news on cable television, and Freedom Newspapers Inc. is betting an estimated $10 million that it will be a hit.

OCN represents more than just a new cable service. It also marks the opening of another front in the ongoing news war between Freedom, which owns the Register and a chain of Orange County community newspapers, and Times Mirror Co., which owns The Los Angeles Times and Dimension Cable Services.

Media analysts and others familiar with the project praise Freedom’s initiative, but caution that OCN has a number of marketing, journalistic, and organizational hurdles to clear. Freedom must create an interesting program, persuade local cable operators to carry the service, persuade large numbers of advertisers to buy commercial time and build an effective partnership between the Register and OCN.

“Obviously it has some attractive potential benefits (for Freedom), and if it takes off it will have major benefits,” said Tom Adams, a newspaper analyst with Paul Kagan Associates, a media research firm in Carmel. “But it’s going to be tough to make much money.”

OCN’s strategy hinges on the idea that Orange County, which lacks a major over-the-air television channel of its own, is given short shrift by local news broadcasts originating in Los Angeles. Alan J. Bell, president of Freedom’s broadcasting division, says the absence of local television has created a tremendous amount of “anger and frustration” among both viewers and advertisers, thus priming the market for OCN.

“This is a niche that’s crying to be filled,” agreed Jim Bequette, western region vice president at Comcast Cablevision in Seal Beach, one of the local cable systems that has already agreed to carry OCN. “There is very little Orange County-centered news on television.”

This theory is already being tested by News 12 Long Island, the only other 24-hour local news service in the country. Like Orange County, Long Island is an affluent, heavily populated suburb that has an identity separate from a large, nearby city, yet remains largely dependent on city-based media.

OCN’s most important early challenge may be persuading reluctant cable operators--including Dimension Cable, which has over 110,000 subscribers in affluent south Orange County--to put the program on their systems.

Thus far, Paragon Cable, Comcast Cablevision, Rossmoor Electric, Community Services Cable, and Rancho Santa Margarita Cable have agreed to air OCN, according to Kenneth D. Tiven, the veteran television news executive hired to run the channel.

With two large operators and three small ones signed up, OCN will have access to about 190,000 of an estimated 460,000 cable households in Orange County. Tiven said contracts are pending with several other companies that would bring the total to 250,000.

Bell is confident that “if we have a good product, we will be on every system, because the public will demand it.” He offers an attractive package: OCN will be provided to cable companies free of charge for the first 10 years, and the local operators will also receive two minutes per hour of advertising time.

Still, OCN may have a tough time signing up all the cable firms. Times Mirror-owned Dimension Cable poses a special problem because of the heated competition between The Times and Register. Leo Brennan, vice-president and general manager of Dimension, said no decision on OCN will be made until after the service is launched.

Los Angeles Times officials are sensitive about the news channel, which will compete with The Times for advertising dollars and serve as a promotional vehicle for a competing newspaper. The Times in May refused to run a full-page advertisement for OCN, a decision that was sharply criticized by Freedom and several newspaper analysts.

The Times is also pursuing a limited cable television news project of its own through a joint venture with KCAL-TV. The Los Angeles television station produces 4 1/2-minute Orange County news spots based on stories provided by The Times Orange County Edition, and those briefs are inserted into Cable News Network’s Headline News Service twice every hour.

Lawrence M. Higby, president of the Times Orange County Edition, said the KCAL venture was “the only response we envision at this time” to the OCN launch. Higby, who previously served as an executive with Times Mirror Cable Television, added, “Contrary to what Orange County Newschannel says, more local news is not one of the things that comes up in terms of cable viewers’ desires.”

OCN may also be concerned about a different cable project: a full-time Orange County news service being considered by Copley/Colony Cable, a joint venture of La Jolla-based Copley Newspapers and Providence, R.I.-based Colony Communications. Copley Colony owns or operates cable systems serving over 70,000 Orange County households.

Bruce Clark, president of Colony Communications, said the company is still pursuing the project, but declined further comment.

Cable operators say they have other reasons to be wary of OCN. “We see a local news channel as eating into our ad sales,” said Steve Everett, general manager of Cablevision of Orange. “They’re going to be knocking on the same doors.”

Many cable companies view local advertising sales as their key source of revenue growth in coming years.

Bell said OCN will receive a boost from the current political climate in the cable business. The cable industry is under fire for rising rates and poor service, and providing more local programming is one means of deflecting such criticism.

OCN has launched a print and radio advertising campaign urging cable subscribers to contact their cable companies and request the news channel. OCN has also contacted public officials in many communities, providing them with information and a video touting the public benefits of true Orange County TV news.

OCN clearly hopes that Dimension, Copley/Colony and other systems that don’t sign up will find themselves under public pressure to do so. Dimension faces added pressure because Times Mirror owns a newspaper that serves the same area, and any suggestion that it was hindering the development of other news operations could have political and regulatory consequences.

Higby called OCN’s lobbying of cable subscribers and local politicians a “questionable tactic,” and characterized the news channel as an attempt by Freedom “to protect its (the Register’s) local advertising base at the expense of cable operators and small local newspapers.”

But Bell countered that OCN would help local cable companies in the same way that broadcast television networks help local affiliate stations. “A rising tide lifts all boats,” he said. “A network can afford a level of production that an affiliate cannot afford, and the value of the (advertising) time is enhanced. They need each other.”

The OCN programming will feature more in-depth stories than a typical TV news program, Tiven said, though major stories will be repeated frequently in the fashion of all-news radio stations. He added that OCN is developing a novel format that will attempt to “bring the viewer inside the news-gathering process.”

OCN hopes to break new ground by using live computer graphics on the air. Traffic reports, for example, will feature computerized road maps that automatically display alternate routes when the traffic reporter enters information on an accident.

OCN will have some national and international news, but Bell says such coverage will be sparing and will always be done with an eye toward the Orange County impact.

Some are skeptical of OCN’s ability to keep the program interesting. “There just aren’t that many stories out there,” said Calvin Brack, general manager of KDOC-TV in Anaheim, a UHF broadcast station that produces a half-hour evening news show for Orange County. “I think they’ll have real problems.”

But others say OCN should prove very popular. “The people are there, the market is there, the news is there,” said Warren Cereghino, news director at KTLA in Los Angeles. “What they’re doing is very smart.”

High-tech equipment--combined with the absence of unions--will allow OCN to operate with fewer technical personnel than comparable operations. OCN has a staff of around 70 people--Tiven would not give a precise figure--compared with 130 at News 12 Long Island.

Bell said these efficiencies would keep operating costs below those of News 12, which spends more than $10 million annually. People familiar with OCN estimate capital costs at $5 million to $7 million, with several million more for other start-up-related expenses.

OCN will also gain some efficiencies from having the news gathering resources of the Register at its disposal. Tiven downplays the importance of the Register and says newspaper reporters will be used mainly as expert commentators in the fashion of ABC’s “Nightline.” “We don’t need as much help as people think we do,” he said.

But current and former Register reporters say there have been concerns that OCN would add to the workload and tip competing newspapers to exclusive stories. Register editor N. Christian Anderson said, however, that any “anxiety” about OCN among the staff was simply a natural reaction to change.

OCN will have to tread carefully in the advertising area as well. The television station has its own sales staff, but analysts believe some advertisers may divert money from the Register to OCN.

“Advertising budgets won’t expand just because a new medium exists,” noted Bob Woodworth, senior vice president in charge of media services in the Irvine office of AC&R; Advertising Inc. “To some extent it will cannibalize” Register ad sales, he predicted.

But Bell insists that advertisers will try television without cutting print budgets, and that the real target is the $25 million spent on local radio and direct mail. “We’d like to sell to people who weren’t able to use television before,” he said. No package deals combining the Register and OCN are currently being offered.

Initially, 30-second spots on OCN will sell for $100 or less, and OCN will even produce the advertisements in its own facilities at no charge. Bell conceded that these were start-up rates that will have to rise for OCN to turn a profit. He declined to predict when OCN would break even, but acknowledged it might take some time.

Cable industry officials say local news channels have been explored in many suburban markets around the country, but few have been launched because of the financial risk.

News 12 Long Island, serving 600,000 households, hopes to stop losing money next year, about five years after it was launched, said news director Norman Fein.

But News 12 charges cable operators a fee, and also has an advantage in that one of its owners, Cablevision, is also the dominant local cable company.

But even if OCN takes many years to turn a profit, Freedom will have gained a strategic foothold in television.

“Newspapers can’t tell how important (local cable news) might be, but it’s potentially a significant competitor,” said John Morton, a Washington newspaper analyst. “They should at least dabble, and OCN is at the ambitious end of what newspapers have done.”