(FORTUNE Magazine) – One reason Nickelodeon has become the No. 1-rated basic cable network is Nick at Nite, its shrewdly packaged block of vintage TV sitcoms. The network's latest venture, TV Land, exploits the appetite for nostalgia in a new way, by running more vintage shows like Green Acres and Gunsmoke--with old commercials. To the delight of viewers--and at no cost to the sponsors--Mr. Whipple once again pleads with shoppers not to squeeze the Charmin, Ricardo Montalban extols the Chrysler Cordoba with its "soft Corinthian leather," and smiling children who brush with Crest chirp: "Look ma, no cavities!"

The appeal to advertisers, especially those with strong brands and time-tested messages, is simple: free exposure. Says Laura Cutler, vice chairman of Foote Cone & Belding, the New York City advertising agency: "You have the perfect test of a brand if a company can run a 30-year-old commercial. This is tremendously valuable stuff, providing it gives positive memories." One marketer, Kraft Foods' Maxwell House, has gone a step further, incorporating a "retromercial" (as TV Land calls them) in its current TV campaign. New Maxwell House ads intersperse contemporary images with its 1960s-era syncopated percolator, testimony to the enduring power of the original pitch and the durability of the brand itself. "The brand has a heritage that's a real plus today," says Dick Helstein, vice president of Kraft Foods.

Some advertisers prefer not to travel down memory lane, however. Coca-Cola has denied TV Land permission to show its classic feel-good spot featuring the youth anthem "I'd Like to Teach the World to Sing," while Apple won't allow reruns of its award-winning "1984" spot spoofing regimented IBM. (Maybe because IBM has been kicking Apple's unregimented butt.) "When you're talking about Mean Joe Green or the kids on the hill for Coke, you're taking a huge risk because those are all-time great commercials," says Cutler. "It could make the current advertising look weak."

Launched last April, TV Land was inspired by the tremendous success of Nick at Nite. (TV Land and Nickelodeon are both part of Viacom's MTV Networks division.) Because TV Land began with just 5.3 million subscribers, executives decided to fill the time between shows with retromercials rather than sell real advertising at token rates--even though, in some instances, they had to buy the vintage ads.

That left TV Land with an unorthodox business plan, even for cable: The network sold no commercials, paid cable operators $1.20 per subscriber to carry the channel, and promised not to collect subscriber fees from the operators until 2002. "The name of the game is to try to accelerate distribution at a time when there are dozens of channels and only a few availabilities," says Rich Cronin, TV Land's baby-boomer president. The network now has commitments from cable operators to carry it into about 20 million cable and satellite homes by its first birthday, an impressive growth rate.

Of course, it has yet to collect a nickel in revenues, but fortunately for TV Land, its costs are relatively low. Reruns of The Ed Sullivan Show and Mannix cost a lot less than producing original programs, and much of TV Land's staff is shared with Nickelodeon and MTV. While Cronin won't reveal TV Land's startup costs, others say Viacom shouldn't have to spend much more than $100 million before the channel turns a profit. Well-established cable networks are worth many times that.

The real test of TV Land's appeal is only beginning--the channel is selling its first ads, for the third quarter of 1997. The response from buyers will be crucial, since they will supply the only source of revenue for years. But even if the demand is strong, Cronin promises that the retromercials will remain alongside the paid ads, which is good news for fans like Helen Tocheff, an executive at Zenith Media. "Watching TV Land," she says, "I would actually go to the bathroom during the show."

--Marc Gunther