UK cable to challenge satellite nets. TCI bets on it.

The UK-based United Artists Programming (UAP)is due to launch a new pounds 21.5 million cable venture with the working title of UK Today in May. The three-year deal will be financed by five major American investors - TCI, Comcast, Nynex, Southwestern Bell and US West. They already have interests in UK cable operations.

The UK Todaychannel will feature a large number of programs specially commissioned by UAP, which normally fills its cable-exclusive channels with bought products. "Fifty per cent of the investment will go into program production, our company's biggest venture in [self-financed] programming," said Joyce Taylor, UAP's 44-year old CEO. Patricia Douey, whose background includes programming and marketing has been appointed UK Today's general manager.

The new 10-hour a day general entertainment, daytime service will also be a pioneer in UK television. It will provide local cable operators the means to opt out between 5pro and 7Pro and replace UK Today national programs with regional material. followed by regional sports until 11 pm. The concept aims to attract regional advertisers who argue that cable has neglected to meet their local needs.

UAP is the country's second largest cable TV program supplier, after BSkyB. But the programming on BSkyB's six channels is relying mostly on satellite dishes for futu re growth. UAP aims to become Europe's biggest cable-exclusive program distributor.

Less than 500,000 UK homes are connected to cable compared with nearly 30 million overall in Western Europe. Through programming. however, UAP also plans to conquer the European cable markets. "Whatever happens in the future, cable will rule the TV industry, and every channel is going to need new programs in order to compete," Taylor said. She is confident of realizing her goal. At her disposal is the millions of dollars being invested by TCI, which has reportedly poured pounds 160 million into UK cable - mainly in the technology.

UAP began to make a significant impact in the UK during the mid-1980's and currently operates four cable networks: The Discovery Channel - Europe, the classics movie channel Bravo, and the Learning Channel. It also manages the Parliamentary Channel in Britain, and owns 25 per cent of the cable and satellite Children's Channel, which is seen in 6 million homes in the UK, Ireland, Scandanavia and the Netherlands.

Last October, it won the contract to manage and market CMT Europe, a new 24-hour-a day video service based on the US' Country Music Television. Launched by Group W Satellite Communications and Gaylord Entertainment Company, CHT has been redesigned for the European market.

This year, UAP embarks on its most powerful cost-intensive programming venture to date. Discovery Europe and Bravo are to be made available for the Astra panEuropean broadcast satellite for the first time.

"We need the satellite distribution to make the economies of these channels work," Taylor explained. "Although Discovery is seen in 2 million cable homes on the continent and Bravo in 300,000 UK homes, the cost of running the two channels are the same. But we intend to encrypt the two services as our contracts will not allow us to go on satellite without doing so."

While the number of Britain's satellite channels is expanding, cable has the potential for greater expansion and is more flexible for a programmer's audience-targeting needs. According to international advertising agency Saatchi & Saatchi, 7.6 million UK viewers will be served by cable by the year 2000. covering 70 per cent of the country.

In addition, the UK sales or rental of satellite dishes is suffering. Simon Rees, broadcaster director at Europe's leading advertising agency TMD Carat, recently told delegates at an industry conference that the growth rate for satellite dishes will slow down the next five years.

The assessment may help explain the interest UK Today has generated in its UK backers. So why is UK cable, which has an uneven history in the last 20 years, so attractive to North American cash? The answer is telephony.

The 1984 Cable and Broadcasting Act permitted cable to deliver telecommunications services as well as TV - and lured US telephone companies that, so far. had not been allowed to invest in their domestic TV industry. TCI already has seven franchises through TeleWest, a joint venture with US West. And recently, two major financial institutions, invested pounds 70 million in UK cable TV/telephone operations of US cable TV company Comcast Corporation. Comcast UK's cable network covers more than one million households.

"Our move to satellite is only an interim step. We expect to raise the profile of cable, because it can offer more channels and can absorb technological change, such as telephony." Taylor said. "We know that whenever cable is connected to a home with a satellite dish, the viewer changes to cable."