John Malone’s Liberty Media Corp. may end up with a hard sell as it tries to lure cable operators to pay for a channel made up of bits and pieces of the schedules of 20 or so cable networks.
The channel, called TV!, started quietly a few months ago as a catch-all network geared exclusively to subscribers of cable systems owned by Liberty’s parent company Tele-Communications Inc.
TCI’s goal was to give an on-air showcase for a few hours a week to some of the new cable networks (the Military Channel, the Ecology Channel, the Cartoon Network and National Empowerment TV are among the services in the TV! mix) that were banging on the doors of TCI’s cable systems. Those systems, crippled by limited channel capacity, couldn’t accommodate the fulltime schedules of the new networks.
Sharon Brown, VP of marketing for TV!, says that in the 5.6 million TCI homes that have access to the network, “25% of the cable subscribers are aware of it, and almost half of that 25% watch the channel at least once a week.”
The sales pitches begin this month; no multi-system operator outside the TCI universe is on board yet. But an informal survey shows cable operators divided over whether to embrace or spurn the network.
Taking a critical stance, Rick Sperry, senior VP of marketing for Comcast Corp., a top-five MSO, unfolds the following scenario: One of Comcast’s systems with limited channel capacity takes TV! and finds out that the 90-minute weekly sample of the Car & Driver Network is a huge hit with subscribers. The subscribers would start demanding the full 24-hours-a-day of Car & Driver, and “we wouldn’t have the channel space to accommodate the network,” says Sperry. “If the subscribers then complained to the local regulatory body, we’d find ourselves with a political problem.”
The bottom line for Sperry: “No cable operator with an ounce of common sense would put himself in the position of advertising the virtues of a channel that he couldn’t offer full time to his subscribers.”
That’s not true, says Terry Rich, president of Rich Harvest, a marketing company that’s under contract to TV! to produce advertising and promotional material for the network. Rich says that at least the cable system would be giving the subscriber some Car & Driver programming. If the 24-hour Car & Driver were available on a competing direct-broadcast-satellite service, the customer could cancel his cable subscription, buy a satellite dish and sign up for DBS.
But another naysayer, Andrew Tow, corporate senior VP of Century Communications, a top-15 MSO, puts TV! in the category of “barker channels,” like the ones that show endless coming attractions of pay-per-view movies and events. To the argument that TV! could funnel valuable research to the cable operator about what new networks to purchase as he expands the number of channels his systems can carry, Tow retorts, “We do our own research on the local level. We prefer direct local feedback.”
Brand a rareness
But TV!’s Brown says the network could become an important device for operators “to drive brand awareness” both for nets that are still a few months away from launch, like the Military Channel, and for those that are up and running but still short of critical subscriber mass, like E! Entertainment TV and the Learning Channel.
Cable operators who like the concept of TV! agree with Brown that, as John Clark, senior VP of marketing and programming for Crown Media Inc., a top-20 MSO, puts it, “We’re getting an interesting channel that gives us the flavor and taste of emerging networks, helping our cable systems to decide which new channels to take on.”
TV!’s most cheerful blueprint, says TV! VP of programming Jim Berger, has the network luring enough viewers to generate lots of advertising revenue for the local cable system, which would get two minutes an hour for commercials. TCI would hold back 10 commercial minutes within each hour and charge cable operators a monthly license fee that would be within the 5^-a-subscriber range, a price that’s geared to get TV! on expanded basic with all of the mass-circulation ad-supported cable networks.
Berger’s strategy to get TV! pulsing on the cable subscriber’s radar screen is to “cluster the programming from like-minded networks on a given night. Wednesday could be adventure night. Thursday could be family night.”
In addition to the 20 networks TV! now draws from, Berger says he’s adding CNN Intl. in February, TV Food Network in March and the ecology-minded Planet Central in April. Other networks follow later this year.
But the programming scheme that could attract the most attention for TV! is a regularly scheduled Sunday-night free preview of the various pay TV networks. The first experiment takes place Jan. 22 with a 6 p.m. to 1 a.m. free showing of three movies on HBO.
By April, Brown says TV! would like to be scheduling free previews every other Sunday night, with programming from the pay TV networks augmented by such events as pay-per-view specials produced by major studios whose purpose would be to promote two or three of their PPV movies making the rounds that month.
Brown says that if the Sunday-night series helps cable operators to induce their subscribers to buy more pay channels and order more PPV movies and events-revenue sources that are not subject to regulation by the government-TV! could end up paying for itself.