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"We're in a battle for our lives, all of us," the president of the fledgling media outfit told The Wall Street Journal. "The economic environment cannot sustain all of the networks" that are or soon will be operating, the entrepreneur continued.

Sound familiar? Considering that the quote is from Kay Koplowitz, who in 1982 was president of cable start-up USA Network -- the year the article ran -- it sounds eerily familiar to the struggling, ad-supported Web content plays of today.

The headline from the 1982 WSJ article: "Many Cable Services Face Woes as Ad Sales Fail to Reach Goal."

Take a look at the articles about cable start-ups from twenty years ago, about how 1981 was "anything but wine and roses for the cable television industry. " The cable services were having "unexpected difficulties generating the ad revenues they need," as the WSJ and Dow Jones articles reported.

Their struggles are a helpful history lesson for the latest evolution in media -- especially among Web and streaming media content sites whose ad-supported models are in serious doubt as ad dollars thin out in a sluggish economy.

The 1982 article continued: "Except for Ted Turner's superstation WTBS, nearly all the cable networks are losing money. Profits may not appear for two or three years. CBS dropped an estimated $30 million on its cultural venture. Entertainment & Sports Programming Network (ESPN), the second-largest ad-supported cable network, says it will lose $20 million this year. USA, which says it had been 'marginally profitable,' also expects to wind up with a loss this year."

Back then, no one believed the cable start-ups would survive, much less thrive during the shakeout. The rest, as they say, is history.

Today, with the AOL Time Warner media giant getting its house in order, the industry is poised to exploit the latest broadband and Internet technologies to deliver enhanced media services to viewers. Targeted, ad-supported Web plays will also have a place in this ongoing march toward convergence between the Internet and television.

The cable woes of two decades ago aren't lost on J. Moses, the president and CEO of Underground Online. As he guides his content-aggregating network of Web and media sites through the current shake-out, he's baking the lessons of media evolution right into his strategy, starting with reach.

UGO, as readers well know, just finalized its acquisition of rival content aggregator play Bla-Bla Entertainment Network that should push the total number of sites in the UGO network to over 700, if not 800 depending on how the properties are merged.

The next media lesson he's building on is target. Focused on a key demographic, 18-34 males, UGO's business model is also built on a network of affiliate sites that actually create the content. That's another lesson of media evolution that the cable industry lived through: hold down the costs of creating content.

I, of course, am not among UGO's target demo for advertising on UGO affiliate sites from the folks at FartMart.com. In advance of Father's Day, the ads are promoting the "most popular fart product ever! Pull My Finger Fred." But the site has come to the right place to find the counterculture guys who love that lavatorial tone.

Not that edgy advertisers dominate on the sites either. There are ads from WebMD, IBM, movie promotions, Discover and The Travel Club among the UGO channels that include music, games, wrestling, tech, films & tv, freestyle, features and downloads.

Want to get up to date on the next Napster? The UGO music channel has a site that offers explanations and user reviews of the latest in Hotline, Audiogalaxy Satellite and WinMX, to name a few contenders to the music file-sharing phenomenon.

There are plenty of differences between the cable industry shake-out then and new media shake-out of today. But one rule remains in evolving and building media: reach and reaching the target audience.

UGO's acquisition of bla-bla more than doubles the network's reach an estimated 7 million users. At the same time, the company is heading deeper into its targeted demographic and building up a considerable amount of inventory to offer advertisers.

That translates into revenue.

For now, however, more Web site ad inventory in the marketplace translates into an even lower CPM (cost per thousand impression) rate paid out, which helped lead to the shake-out. It's a straight supply and demand issue.

The market will continue sorting that out, just as the media industry keeps merging the unique interactive aspects of Web-based media properties with reach and targeting of the cable television industry.

Just as the minds over at AOL Time Warner work on interactive strategies for their traditional television advertising offers, sites are also evolving how to use rich media and other creative in ads.

For UGO, 75 percent of its estimated $15 million in sales to date are advertising dollars. In another reflection of the evolution of media (the need to diversify from just ad dollars alone), the other 25 percent of revenues come from technology, such as Web hosting services and broadband outsourcing.

But the biggest part of its strategy, in building up the media property, is reach.

"Right now, reach is not being valued. It's almost considered a liability," Moses recently told atNewYork. "People are associating reach with overhead. In the history of media business, with magazines, radio, television, they all talk about reach. That's the basic element of any media business. So we believe the market will come around and start valuing reach for media companies and that we'll be able to leverage that into advertising revenue."

In an environment downright hostile to new media content plays, and as the media big boys themselves weather a downturn in advertising demand, that UGO could get this deal done stands as a beacon for other content plays on the Web.

Twenty years ago, content plays were struggling, just as they are today.

Twenty years ago, cable programmer Warner Amex had three offerings on which to place some of its media bets, the 1982 article continued. "MTV, which although popular, doesn't have a large advertiser base; Nickelodeon, which has run into disapproval from parents and action groups and the Movie Channel, which is struggling against Time Inc.'s HBO."

To survive the shake-out, they did the same thing then that new media plays are doing now: consolidating, merging, and building reach.

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