SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON D.C. 20549



                                    FORM 8-K

                                 CURRENT REPORT

                     PURSUANT TO SECTION 13 OR 15(D) OF THE
                         SECURITIES EXCHANGE ACT OF 1934



                          Date of Report: JUNE 15, 2001



                               SOURCE MEDIA, INC.
             (Exact name of Registrant as specified in its charter)


               DELAWARE                      0-21894             13-3700438
    (State or other jurisdiction of      (Commission File       (IRS Employer
    incorporation or organization)           Number)         Identification No.)

                                       5400 LBJ FREEWAY
                                           SUITE 680
                                      DALLAS, TEXAS 75240
                            (Address of principal executive offices)


                  Registrant's telephone number: (972) 701-5400








ITEM 5.   OTHER EVENTS.

     On June 15, 2001, Source Media, Inc.  announced in a press release that the
indenture  trustee of its 12% Senior  Secured Notes due May 1, 2001 has declared
the  entire  principal  amount  of the Notes and all  accrued  interest  due and
payable  immediately  due to the company's  failure to pay the current  interest
payment. A copy of such press release is attached hereto as Exhibit 99.1.

ITEM 7.   FINANCIAL STATEMENTS AND EXHIBITS.

(a)      Financial Statements - None

(b)      Pro Forma Financial Information - None

(c)      Exhibits:

    EXHIBIT NO.           DESCRIPTION

        99.1              Press release dated June 15, 2001


                                   SIGNATURES

     Pursuant to the  requirements  of the Securities  Exchange Act of 1934, the
Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.


                                  SOURCE MEDIA, INC.
                                       (Registrant)



Date: June 15, 2001               By:   /S/ STEPHEN W. PALLEY
                                      ---------------------------------------
                                        Stephen W. Palley
                                        President and Chief Executive Officer





                                                                    Exhibit 99.1


                         SOURCE MEDIA INTEREST NOT PAID

                    COMPANY EXAMINING STRATEGIC ALTERNATIVES

DALLAS, JUNE 15, 2001 - Source Media, Inc. (OTC Bulletin Board: SRCM), a leading
provider  of  interactive  digital  cable TV  applications  and  audio  and text
applications for all digital media platforms, announced today that, as expected,
the indenture  trustee of its 12% Senior  Secured Notes due May 1, 2001 declared
the  entire  principal  amount  of the Notes and all  accrued  interest  due and
payable  immediately,  due to the company's failure to make the current interest
payment.  As a result,  Source Media will record the entire  principal amount of
the Notes as short-term indebtedness rather than long-term indebtedness.  Source
Media and its financial advisor, UBS Warburg, continue to analyze Source Media's
strategic  alternatives  and options,  and hold  discussions with the unofficial
committee of holders of the Notes.  Source Media is  conducting  its business as
usual.

Source Media is a leader in the development,  production and distribution of new
media  content.  Source  Media's  interactive  TV business is conducted  through
SourceSuite  LLC, a 50/50 joint  venture with Insight  Communications,  which is
managed by Source Media. SourceSuite's products are SourceGuide,  an interactive
program guide and LocalSource,  a local interactive  programming service. Source
Media's IT  Network is the  leading  creator  of  private  label  audio and text
content.  This content is designed for universal  distribution and access across
all  platforms,  including  voice  portals,  wireless  and  wireline  telephone,
Internet and digital cable television. For further information, please visit our
website at www.sourcemedia.com.

SAFE HARBOR  STATEMENT  UNDER THE PRIVATE  SECURITIES  LITIGATION  REFORM ACT OF
1995:  STATEMENTS  THAT ARE NOT HISTORICAL  FACTS,  INCLUDING  STATEMENTS  ABOUT
CONFIDENCE  AND  STRATEGIES  AND PLANS AND  EXPECTATIONS  ABOUT NEW AND EXISTING
PRODUCTS, SERVICES, TECHNOLOGIES AND OPPORTUNITIES, INDUSTRY GROWTH, DEMAND, AND
ACCEPTANCE OF NEW AND EXISTING PRODUCTS,  AND RETURNS ON INVESTMENTS IN PRODUCTS
AND MARKETS ARE FORWARD-LOOKING  STATEMENTS THAT INVOLVE RISKS AND UNCERTAINTIES
THAT  COULD  SIGNIFICANTLY  IMPACT  THE  COMPANIES.  THESE  STATEMENTS  ARE  NOT
GUARANTEES OF FUTURE  PERFORMANCE,  AND ACTUAL  RESULTS COULD DIFFER  MATERIALLY
FROM CURRENT EXPECTATIONS.


                                      # # #


CONTACT:    Benjamin J. Douek, Chief Financial Officer
                  972-701-5401
                  972-701-5566 - Facsimile
                  bjdouek@srcm.com