MTV Will Split Into 3 Cable Channels

MTV Networks, reflecting the fragmentation of radio, announced Tuesday that it would split its pioneering music-video network into three separately programmed cable channels beginning in mid-1993.

The move comes as cable networks are getting ready for the expected rollout of high-tech local cable-TV systems with 150 or more channels. Although the average local cable-TV system today has only 37 channels, introduction of new technologies such as video compression and fiber optics are expected to boost channel capacity significantly over the next few years.

“Television is fragmenting just like radio,” said Tom Freston, president of MTV Networks. “This is a move on our part to specialize and then sell a larger combined audience to our advertisers.”

MTV did not say what the musical formats of the three channels would be, but insiders said it is likely one would be programmed with urban contemporary or rap music, which originally was ignored by the network but in recent years has become increasingly popular.

Freston said MTV would test several formats during a six- to 12-week period on five different cable systems across the country. He noted that all of the formats would be designed to appeal to the channel’s traditional 12- to 34-year-old audience.

MTV’s three-way split--known in the cable industry as “multiplexing,” after the trend by movie theaters during the 1980s to divide themselves into several theaters on one location--is expected to be copied by other cable networks. A vast number of channels are expected to open up for programmers as more high-tech cable systems come on line during the decade.

“Right now, it’s strictly a positioning issue,” said Larry Gerbrandt, senior analyst with Paul Kagan Associates, a Carmel-based media research and investment firm. “But you are going to see virtually every cable network that has the resources develop a multiplex.”

In May, HBO announced that it and sister pay-TV service Cinemax would each split themselves into three separate channels that would carry the same schedule of movies at staggered times.

HBO’s move came right on the heels of plans announced by Time Warner’s New York cable-TV system and Denver-based cable giant Tele-Communications Inc. to begin building high-tech cable systems that would give viewers a choice of dozens of pay-per-view movies. Most cable systems now offering PPV only set aside one or two such channels.

Several obstacles still need to be overcome before 150-channel cable systems become standard. Not the least of them are financial. Cable companies have found it difficult to secure financing from banks to upgrade their systems, and uncertainty over re-regulation has made investors nervous about backing new cable ventures.

“It’s our estimate that less than 10% of the cable homes will be in the over-100-channel mode by the end of the decade,” said Lloyd A. Werner, senior vice president of Group W Satellite Communications. “It’s going to be very small.”

But Werner predicted that a larger percentage of cable systems will have 75 to 100 channels, and that presents programmers with myriad opportunities. “The channels that will do better will be the specialized niche services,” he said. “Just look at radio.”