G4: A Costly Quest for Viewers

Feb 7, 2005  •  Post A Comment

In a scant two years, Comcast took its video game channel G4 from a business proposal to 50 million households via a major acquisition and about $450 million in capital. Yet so far, executive turnover, network name changes and a TechTV viewer backlash have stymied the network’s potential to recoup its investment.

The inside story of the channel’s transition from G4 to G4techTV and-on Feb. 15-back to G4 reveals the growing pains endured by a channel whose distribution has expanded faster than its audience and illustrates the programming ambitions of its corporate parent.

Unlike Comcast’s better-known and more established cable properties (it has controlling stakes in E!, Style, Outdoor Life and The Golf Channel), G4 has been treated to a privileged fast-track upbringing that may be a precursor to how the multiple system operator will launch future channels.

“For a pure start-up, it’s been one of the most expensive so far,” said Larry Gerbrandt, a television analyst at the consulting firm Alix Partners. “They’ve chosen the single toughest demographic [young men] to go after [and] G4 has failed to come up with a signature show that’s a must-watch.”

Yet Comcast simultaneously has taken a characteristic hands-off approach to the internal management of the network, a stance the MSO says will not change with last week’s long-awaited appointment of programming czar Jeff Shell.

“Comcast are financial investors rather than operational investors,” Mr. Gerbrandt said.

And industry critics say G4 has yet to get lucky.

On one hand, the channel sports an 80 percent male skew that even Spike TV executives would envy. “It had the highest composition of teens of any cable network in the third quarter,” said Brad Adgate of Horizon Media.

On the other hand, the channel’s ratings are very modest (47,000 average prime-time viewers in the fourth quarter of 2004) and its most popular show is a leftover from TechTV-a brand the network is trying to shed.

What’s In a Name?

At the Television Critics Association’s press tour last month, G4techTV CEO Charles Hirschhorn announced the channel’s name would revert to G4 beginning Feb. 15.

Though the move struck some critics as indecisive, insiders say the name “G4techTV” was always temporary and designed to appease skittish cable operators and that a pure “G4” brand has been Comcast’s goal.

When Comcast purchased TechTV for an estimated $300 million and combined it with G4 in May of last year, many were surprised the G4 brand would dominate the new network. San Francisco-based TechTV, while never profitable, had genuine cult appeal among college- and middle-aged computer geeks.

Los Angeles-based G4, meanwhile, aimed for the teenage Xbox and PlayStation crowd but struggled to attract viewers or generate distributor interest beyond systems controlled by Comcast.

Both networks were tech-savvy and male, but a generation apart and possessing a different cultural perspective. TechTV catered to computer geeks, G4 to the tech-savvy Hollywood hipster.

Comcast was less interested in TechTV’s viewers, however, than its real estate-the 43 million homes TechTV had gradually penetrated during its six years of existence. The 2-year-old G4 was in only 13 million homes. The combined channel is now available in 50 million homes.

In rapid succession, G4 laid off about 300 TechTV employees, closed the San Francisco operations and moved the remaining staff to G4’s new West Los Angeles headquarters. On the air, TechTV became G4techTV, with half of the content pulled from TechTV’s slate and half from G4, while the presentation was glossed up with G4’s slick, MTV-style imagery.

The initial round of TechTV layoffs gave way to turnover at G4techTV, with employees frustrated by programming changes to signature TechTV’s shows.

In the press and online, where many of the channel’s target audience lingers, the changes also fostered a degree of resentment. Even before buying TechTV, G4 had an arrogant reputation among some gamers, a notoriously difficult demographic to please, who said the channel felt like corporate pandering.

Blogger Jeff Putz is among critics who say the changes were “like losing a friend.”

“There is an assumption that [the younger] demographic wants to watch gaming content all day long with juvenile humor,” he said. “They’ve alienated the audience by making ridiculous format changes to existing shows and laid off a lot of the personalities that made the shows credible.”

Complaints Anticipated

Mr. Hirschhorn said complaints about programming are to be expected given the rebranding. “There were certainly a number of TechTV viewers that lost programs they were interested in,” he said. “Although their numbers were small, they were loyal viewers and you expect lots of online logs and chatter.”

All changes were undertaken with an eagerness to shed the network of older-skewing TechTV viewers, and as Mr. Hirschhorn said, “The demographics of TechTV changed almost overnight” as the network’s median age dropped to 21.

Though Mr. Hirschhorn’s changes may have dinged the channel’s reputation among some viewers, they have not been harmful from an advertising perspective.

Mr. Adgate echoed Mr. Hirschhorn’s assessment that the network hasn’t grown its audience but has increased its concentration of teenage males more than any other network.

“The ratings aren’t different, but what’s really different is the audience profile. It’s gotten significantly younger while maintaining its male demographic,” Mr. Adgate said. Looking back, Mr. Hirschhorn said he is confident he made the correct decisions.

“We did the right thing,” he said. “All the advice I got was to do these things as quickly as possible, and ironically, I wish we had done them faster.”

Looking forward, Mr. Hirschhorn is planning to announce some new programming for the second quarter, when G4 rolls out its first nationwide marketing drive. Like all niche networks, G4 remains one breakout hit away from being deemed a success.

Until then, Mr. Hirschhorn said, he has revived the “Robot Wars” series, a nonvideo game show where home-built robots duel in an arena. It aired for two seasons on TechTV.