TCI Ponders Broadcasting ‘Best of Cable’ : Television: Cable giant hopes to boost subscriptions by offering ‘free samples.’

As chief executive of Denver-based cable TV giant Tele-Communications Inc., John C. Malone is the most powerful man in cable television. TCI serves about one out of every five cable TV subscribers in the country, and Malone indirectly decides the fortunes of nearly a dozen cable TV networks, ranging from popular services such as CNN to the Discovery Channel.

So it should surprise no one that Malone is now pondering the launch of his own broadcast network to compete against ABC, CBS, NBC and Fox. In fact, he has already taken the first steps. Over the last several months, Malone has spoken to numerous Hollywood studio and cable TV executives about using his Silver King TV stations as the basis for a new broadcast network.

Malone’s idea is to design a broadcast network drawing upon the best original cable programming from networks such as Discovery, Lifetime, HBO, Nickelodeon and others. In theory, the new broadcast network would help increase subscription levels by giving viewers a free sample.

Silver King Communications, which would be the basis for the network, is the nation’s sixth-largest TV station group. It is controlled by Liberty Media Corp., a TCI holding company. Liberty acquired its interest in Silver King when it invested in Home Shopping Network.

“It’s no secret that Malone has talked to all the major studios about what to do with HSN,” said one senior studio executive. “The stations are a valuable asset.”

The backbone of any broadcast network is its owned-stations group, those traditionally half-dozen or so TV stations in the country’s biggest markets operated by the network. Those stations serve as the network’s anchor because they cover 20% of the nation’s TV-watching homes.

Malone is not alone in his thinking, however. Paramount, a major producer of TV programming for the networks and syndication, has also had long-running conversations with the Chris-Craft/United group of TV stations about launching a fifth network.

Paramount owns six TV stations covering almost 5% of the country’s TV homes and has agreed to buy a sixth station in Detroit for about $100 million. The Chris-Craft/United group owns eight stations covering about 18% of the country. Independent producer and former NBC Chairman Fred Silverman has consulted with Chris-Craft/United on the feasibility of a fifth network.

Ed Hatch, a media analyst with UBS Securities in New York, sees possibilities in Malone’s plan. “If an operator such as Liberty can put together a potpourri of programming through the Silver King stations, it could achieve a meaningful identity and a share of the advertising revenues,” he said.

But Gerald Hogan, president of HSN, has apparently been running into static when pitching the idea to the cable industry. He has been told that the network, while novel, presents a hornets’ nest of problems over program rights. It could even hamper cable growth since its so-called “best programming” would now be widely available for free.

“To me, this is not a grabber-type of schedule,” said Bill Croasedale, president of broadcast at Western Media in Los Angeles. “What we’re looking for in cable is a highly targeted audience, and this would be too many things to too many people.”

Still, the idea of launching a new national over-the-air programming service remains an appealing idea in many people’s minds. The economics of how a broadcast network should operate has also changed dramatically in the face of competition from cable so that the entry costs are much lower today than they were even a decade ago.