Singing the Praises of a Niche

Apr 26, 2004  •  Post A Comment

Since leaving his job as president of Turner Entertainment Networks last year, Brad Siegel said, he has seen 50 to 100 business plans for new cable networks. But the one that made him see the light was for the Gospel Music Channel.
The channel, which will launch in the fourth quarter, already has gotten an important amen from Cox Communications, one of the country’s largest cable operators.
Gospel may seem like an odd business for Mr. Siegel to pursue. He’s not Christian and though he likes classic gospel music, he admits his tastes run more toward jazz and rock ‘n’ roll. In fact, at Turner, when discussions turned to a music network, Mr. Siegel championed a channel dedicated to the history of rock music.
But since taking a closer look at gospel, Mr. Siegel has found a lot to like. Some 80 million people listen to gospel music on the radio, he said, and they buy 50 million CDs a year-or seven for every country music CD sold. And surprisingly, it’s big business in big markets, including Los Angeles, Chicago and New York. “If it’s a niche, it is one giant niche,” Mr. Siegel said.
Charles Humbard has been working on the channel for three years. He’s the son of Rex Humbard, one of the earliest TV preachers, and was one of the singing Humbard family. He got into the cable business and was a senior VP and general manager at Discovery Networks. “If God created anyone to run this channel, it’s Charlie,” Mr. Siegel said.
Mr. Humbard brought Alpine Equity Partners on board for financing, but needed more to launch a 24-7 cable network. Mr. Humbard and Alpine approached Constellation Ventures, a Bear Stearns media technology fund that has also backed College Sports TV and TV One. Dennis Miller, managing director of Constellation, asked Mr. Siegel to read the business plan and meet with Mr. Humbard.
They met at Ted Turner’s Montana Grill in Atlanta and hit it off. Now they’re partners.
“He knows operations. I know the programming and marketing side,” Mr. Siegel said. Mr. Humbard will be president and CEO of the channel. Mr. Siegel will be vice chairman. Mr. Siegel is not exactly an employee, but he plans to spend a lot of time working on the channel. Singer Larry Gatlin will serve as the channel’s director of artists and performances, country and southern gospel.
The network will be based in Atlanta, with a production office in Nashville.
Mr. Siegel declined to say how much the channel has in start-up capital, but he said it was enough to finance a prime-time schedule consisting of more than 50 percent original or premiere shows. “I would not be doing this if it was not properly funded to succeed,” he said.
The programming will include music videos, biography shows, countdown shows, concerts, contests and history shows and will feature all of the music that comes under the category of gospel. While the music may be inspirational, there will be no preaching, Mr. Siegel said.
There have been many plans to launch cable music channels to compete with MTV, but little success. And faith and religion networks have not attracted huge audiences.
Mr. Siegel admits building the channel won’t be easy, particularly obtaining distribution, though the network seems off to quick start. Terms were not disclosed for the master distribution agreement the network reached with Cox. The network must still negotiate carriage with individual Cox systems. But Mr. Siegel said the channel has a monthly subscriber fee that should be attractive to other operators. “It is reasonable, and they don’t have to worry about sports or the movie studios driving it up,” he said.
Mr. Siegel said he thinks the network may get analog carriage in some markets. Once the network is launched as a 24-7 channel it will also offer operators programming for video-on-demand, pay-per-view and HDTV platforms.
The Gospel Music Channel will take a grass-roots, viral marketing approach.
“Once people hear that there is a gospel music channel, there’s going to be a big demand. It will be a groundswell,” Mr. Siegel said.
Advertisers will see value too. Gospel Music Channel will be family-friendly and advertiser-friendly. The channel projects a median age of 34 to 35, which would be younger than the broadcast networks and younger than most cable channels.
“Gospel fans are like NASCAR fans in that when you support something they care about deeply, they support you,” Mr. Siegel said.