Digital networks find their audiences

Dec 2, 2002  •  Post A Comment

Digital cable networks have proven themselves.
At least that’s the consensus among cable TV executives. Digital channels spun off from a parent network have achieved sizable distribution, as have several unique digital networks that stand on their own, such as MuchMusic USA, Trio, Do It Yourself Network and Fine Living.
“We are a viewer-driven music network that is not sorta, kinda an afterthought to a bigger network,” said Marc Juris, president of MuchMusic USA, which has 28 million subscribers. “You don’t have to be big to be meaningful to the customer. You just have to be different and speak in their voice. As more and more people treat digital cable as the exciting programming opportunity that it is, not just repurposed, but as a platform for new programming it will become more meaningful to customers.”
A pinpointed, precise audience is essential on the digital platform, and MuchMusic, for one, delivers that with its passionate group of music lovers who are tech savvy and between the ages of 12 and 34, he said.
Ratings aren’t high, with MuchMusic averaging a 0.1 in the 12 to 34 demographic. What matters is the network’s core tie-in to broadband through the music selection process, which helps drive high-speed-modem adoption for the cable operator, Mr. Juris said. The channel, which launched in 2001, isn’t making money yet, but Mr. Juris projects profitability in three years.
Scripps Networks’ DIY network has driven its subscriber count to 13 million since its 1999 debut, with 20 million viewers projected for next year. A niche network needs to mine different methods and models to reach viewers and attract advertisers, said Jim Zarchin, president DIY. Every half-hour DIY features the “DIY Kit,” a fully sponsored two-minute project. Viewers are then sent to the Web site for more details on the project so they can try it at home. The network is able to charge a premium for this advertising environment, which has been a key factor in driving sales for the network, he said.
Digital networks need to be creative in attracting viewers as well. Popular arts channel Trio offers theme months of programming four times a year, such as its upcoming “Brilliant But Cancelled” theme in December. All month the network will showcase TV programs that came and went quickly but were creatively successful.
Theme months provide enough variety to satisfy the regular viewers and also offer a great sampling opportunity for new viewers, said Lauren Zalaznick, the network’s president. She expects the network, with 17.5 million subscribers, will be profitable-along with Universal Television Group’s other emerging networks-within five years.
Digital networks are commanding attention since many, such as the Discovery digital channels, have pushed past the 20-million-subscriber mark. That’s an important distinction because it’s a magic number for advertisers, said Mike Goodman, analyst with the Yankee Group. “When you hit 20 million you are sort of into the buying rotation,” he said. “Before that you are fighting tooth and nail for every dollar.”
Discovery plans to ramp up its investment in marketing, promotion and original programming for its digital networks, since most of them have reached the mid-20-million range for distribution. “Viewers and subscribership are at a critical mass where added investment to take them to the next level is warranted,” said David Karp, senior VP and general manager of Discovery Digital Networks.
Lifetime Movie Network has also gained substantial distribution since its start-up in 1998. It is now found in 35 million homes, averages 170,000 viewers each night and delivers a 0.7 household rating. From March to October, it was the second-highest-rated network for women in households, women 18 to 34, and women 18-plus, behind Lifetime, said Rick Haskins, executive VP for the Lifetime brand.
Unique channels need to be carried in tiers of programming to survive, said Jillaina Wachendorf, senior VP marketing with Starz Encore Group, which offers its “Superpak” of 12 digital channels. “But if a customer has to buy through all these digi-net tiers before they get to movies, that won’t work.”
The original promise of cable television was greater personalization of the TV experience and the delivery of new categories of programming, said Ken Solomon, president of Fine Living. “cable is really fulfilling that promise.”