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Wednesday, May 25, 2022

Cable

Is Los Angeles ready for a 24-hour cable TV news channel?

We may be about to find out, as officials with cable TV operator Century Communications Corp. begin experimenting with the concept in Orange County.

Century recently purchased Orange County News Channel from the owners of the Orange County Register newspaper. The station, known as OCN, provides news and community programming for 550,000 households in Orange County.

“We bought it to experiment and learn about the programming side of the industry,” said Bill Rosendahl, a senior vice president with Century who runs the New Canaan, Conn.-based cable operator’s regional office in Santa Monica. “We wanted to walk before we run, and this is giving us an experience of what it is like to create a 24-hour community channel.”

Rosendahl said the cable provider is considering a five-year plan that would set up similar cable channels in Los Angeles, Ventura, Riverside and San Bernardino counties.

The purchase of OCN from Freedom Communications Inc., which owns the Orange County Register, is just one of several recent strategic moves by Century in Southern California. Century Cable recently purchased system operator MultiVision Cable (which covers Anaheim) to give Century a broader subscriber base, and it is currently negotiating with cable operator Jones Space Link on a deal to buy systems covering various neighborhoods in Orange and Los Angeles counties.

The purchase of OCN is seen as a way for Century to pick up experience in running a local 24-hour channel, in preparation for developing others like it. Century has about 250,000 subscribers in Los Angeles County and 1.3 million throughout the nation.

Irvine-based Freedom launched OCN in September 1990. Privately held Freedom has never disclosed OCN’s financial results, but has acknowledged that the cable channel has lost millions of dollars.

OCN’s programming is produced out of the same Santa Ana building as the Orange County Register.

Rosendahl says the same programming strategy could be duplicated in other counties. He believes the lack of local news in television and newspaper coverage has created a pent-up demand for such channels.

“There is a tremendous need for programming that impacts communities,” said Rosendahl, who also hosts “Week In Review,” a public affairs talk show that airs on Century. “I find the viewership of Century is tremendous, and the feedback suggests there is a great need in the L.A. metro market for this kind of programming.”

But economics plays a big role. OCN, he says, is finally about to turn a profit after being bought by Century.

The news station makes money by selling advertising time to local and national merchants, he said. A commercial spot on the channel costs anything from under $100 for a 30-second commercial on off hours to thousands of dollars to sponsor entire shows, according to Michael Sweeney, the channel’s general manager.

“The same formula can be duplicated elsewhere,” he said. “We provide quality news to our viewers, at any time of the day. Not everyone works the same schedule, or can be at home to catch the regular newscasts.”

OCN does not charge fees to local cable operators in Orange County that opt to place the channel on their systems. However, Century is studying the possibility of charging such fees to help underwrite the cost of expansion.

Bill Marchetti, a cable analyst with Paul Kagan Associates, said Century would have to charge cable systems to carry their channels in order to expand the network.

“They would not be profitable if they had to live just on ad revenue,” he said. “There has to be a mix in order for a cable outfit to do their own programming. If they can do that, then there’s a market for news channels in other counties.”

Industrywide, he said, programmers generate 52 percent of their revenues from advertisers and 40 percent from licensing fees.

The Orange County News Channel is the nation’s second oldest local cable news channel. The first, News 12 in Long Island, has been on the air since 1986.

Last year, News 12 began expanding into other markets in the New York area, such as Westchester County, where the company has set up a separate team to gather and produce local news.

Norm Fein, a spokesman for News 12, which is owned by Cablevision Systems Corp. of Woodbury, NY., said News 12 generates ad revenue as well as fees from cable affiliates.

Even so, Fein said News 12 has never been profitable, though it has broken even in the last two years.

“There is a definite need for things like News 12 and OCN in other communities,” he said. “We’re finding that advertisers are coming on line, and (we’re learning) this can be not only profitable, but obviously informative.”

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