Tougher Than Ever to Get in the Game

May 4, 2008  •  Post A Comment

It’s tougher than ever for a new network to gain a foothold, especially for the independents that have to compete for bandwidth with the digital and high-definition offshoots of well-established legacy channels.
In 1977, two guys in Connecticut named Rasmussen had a great idea: a 24-hour TV network devoted solely to sports. Finding content and selling airtime were the biggest obstacles they faced in gaining carriage and distribution for the cable channel that has come to be known as ESPN.
Thirty-one years later, it takes a lot more than a great idea to launch a network. Take emerging network the Gospel Music Channel, for example. It’s the first music video channel devoted to all styles of gospel music, and it has been one of the fastest-growing channels over the last two years, now in 40 million homes. How has an independent like GMC managed to break through?
“We have earned distribution ‘the old-fashioned way,’ going door-to-door and proving the need for Gospel Music Channel and the network’s great value,” said Charles Humbard, GMC’s founder-president. “To the industry’s credit, they have recognized that 60 million gospel/Christian music fans wanted and needed a dedicated television network. Their support has helped GMC.”
GMC’s success isn’t typical. Most new networks find it an uphill battle, unless they are part of a larger media company. According to Joy Phenix, A&E Network’s senior VP of national accounts, “If you’re going to deliver a new network and you’re not already in the dance, I think that’s going to be a huge struggle.”
A&E’s philosophy of how to make expansion work revolves around content. “The beginning and ending of the story has to do with content and the programming on the network. It has to be something that distributors want to distribute,” Ms. Phenix said. “What they look for is content that fits with their storefront. The way we have been able to launch new networks successfully is to identify programming that works and shore up what we have on-air to meet viewers’ demands.”
It was the loyal, vocal viewership of “Biography”—the original TV series—that led to demand for a network comprised solely of that kind of content. “It was such a popular brand that we could spin it off into the Biography Channel. History was such a popular brand on A&E 15 years ago that it spun off into a channel. That’s where our success has come from,” said Michael Feeney, A&E’s senior VP of corporate communications.
Identifying the need for a channel and an audience that will support and sustain it is perhaps the most important first step for an independent or a major media concern. “We knew that Gospel Music Channel had a large and loyal audience before we even launched—that was the opportunity—so our challenge has been to prove that to the distributors, which we have been successful in doing,” Mr. Humbard said.
Scripps Howard, which owns Food Network, HGTV, Fine Living, DIY and Great American Country, also believes in identifying a need before creating a new channel. “What we’ve done with our five networks is start with a category where there’s a viewing need and then develop a brand around that category. We believe in category television,” said Jon Steinlauf, senior VP of advertising sales for Scripps Networks.
“What we want to do is serve a category, and unlike most of the other cable networks, we’ve stayed the course,” he added. “We’ve really fulfilled the original promise of cable, which used to be called narrowcasting or vertically programmed channels. All sports, all news, all music videos, all uncut movies. That was the original promise, but it’s really shifted a lot. A lot of networks that started off as one thing have become something else in their desire to chase ratings.”
Like Scripps, A&E has remained vertical within its category, and cable operators and satellite systems have been all for its network expansion. “At the time that they spun off the shows, there was a demand from operators—more importantly from viewers—for high-quality biography programming. A&E could do that, so they did,” said Ms. Phenix.
Now, the distributors are calling for high-quality HD from A&E. “There’s a tidal wave of how viewers want product—that’s why digital works so well for operators. There’s a big capacity, but there are limitations,” Ms. Phenix said. “Our core networks are A&E and History. Our new networks are History International and Biography. Those networks have done really well for us. Biography just launched in HD and that’s something our distributors want.”
HD has become a priority for Scripps Howard, too. “High definition transforms the living rooms of America. People are signing up in droves for high-definition services, and companies like ours are creating brand-new high-definition channels and we’re talking about more. Distribution is flying off the shelves,” Mr. Steinlauf said.
“People are buying a lot of equipment for their homes and the MSOs want to be sure they have great product. A&E and History in HD fit the bill,” Ms. Phenix said. “When we launch in HD, we always try to amp up the content. You’re going to have a higher profile for that content. HD consumers go to the HD channels first. They look and see what’s on HD, so you want to make sure that when people come to your networks, they look fantastic. For Biography, we had original series in HD, and we’re producing shows in HD all the time.”
Cable and satellite operators welcome new product when it’s something they think will sell. Gospel fits the bill, as do the A&E products. For Ovation TV, an independent fine arts channel in 28 million homes, it was a tougher sell, especially without leverage to convince operators to try a new network. (Sister net Reelz Channel is in 35 million homes.)
Gospel’s Mr. Humbard can relate to Ovation. “While we don’t have multinetwork deals to leverage, we don’t have multinetwork deals to negotiate, either. Our discussions with distributors are very streamlined and come down to us presenting the great value of Gospel Music Channel and striking the appropriate price/ value relationship.”
Cable and satellite outlets will continue to add new nets, especially the on-demand variety. “As a company, we feel if we can deliver compelling content there will be homes for that content,” A&E’s Ms. Phenix said.
“The emerging nets story is a great story about the partnership the distributors have had with programmers,” she said. “That push-pull of developing new product and getting it to the customers, it’s working. Their appetite isn’t driven by planners, it’s driven by the consumers. They want content that they can relate to and connect with. As a media company, we’re committed to bringing compelling content and making investments there because we think that’s what viewers really like,” she added. “Distributors do a great job figuring that out and getting it to them.”


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