Bottom Line: Associated shows its vision for cable TV

THE TROUBLE with the multimedia revolution is that everyone knows it is going to make some people very rich. The problem is in distinguishing the likely winners from the probable losers.

Associated Newspapers is a case in point. Its success in winning the London cable television station left analysts scratching their heads, wondering what if anything to build into their forecasts.

In the end most of them did nothing, and the share price of Associated Newspapers' parent, the Daily Mail and General Trust, ended the day unmoved. Shares in SelecTV, its junior partner, reacted with considerably more verve, adding 8.5p to end at 33.5p. But Selec is an altogether more speculative commodity, for which any news that is not bad news tends to be viewed as good news.

Nevertheless, Associated is the real beneficiary from the deal, which marks a significant step towards the goal of its executive chairman, Sir David English, of taking his group into the brave new world of multimedia. The entry price is low: the pounds 30m investment is small beer for a balance sheet as strong as DMGT's, yet for its money Associated will get vital experience in operating in the cable environment.

Cable may have got off to a slow start compared with satellite or terrestrial channels. But the regulatory climate in the UK, where it is allowed to offer profitable telephone and other telecoms services, is increasingly making it look as if it will turn out to be the winning medium here. Once the network is installed, almost every additional penny is profit.

As ever, when both the product and economic climate are uncertain, it pays to concentrate on the quality of management. In this context, the softly, softly expansion strategy of Associated appears increasingly clever when compared with its rivals, Pearson and Mirror Group. Pearson has spent serious amounts of money buying into terrestrial and satellite channels such as BSkyB. Yet its management has been repeatedly wrong-footed - most notably by Rupert Murdoch and his News Corporation. Sir David's victory will give him a headstart on the very similar aspirations of David Montgomery at the Mirror.