A group of Los Angeles-based entrepreneurs are planning to buy the rights to many of the Academy Award-winning documentaries, both shorts and features, over the last 40 years and use them as linchpin for a cable network called the Documentary Channel.
John D. Forbess, an entertainment lawyer who’s chairman and CEO of the Documentary Channel, said, “We’ve done a survey of the documentaries that won Oscars and were surprised at how many of them have never shown up on television.”
The channel, which says it will begin operation in the second quarter of 1999, may have tough financial sledding because its business plan envisions that cable operators will buy it only for digital tiers.
Resigned to digital
Through past experience, cable subscribers in most systems have not clamored for these separately priced digital tiers, most of which have not sold well, averaging only between 10% and 20% of the subscribers in a given system.
“We’ve resigned ourselves to going digital — we’re making no pretense that there’s any analog space available” on most cable systems, said Larry Namer, a consultant to the Docu Channel and one of the founders of E! Entertainment TV.
But Forbess said Docu will be able to live with a limited subscriber base for a number of years because “we’ve created a lean, conservative business model.”
Programming costs will be low, says Namer, because Docu will be picking up lots of existing nonfiction films that are “harder-edged than the nature and animal documentaries that Discovery Channel buys and the World War II films that turn up all the time on A&E.”
Because current net demand for these offbeat films is nonexistent, Docu says it will be able to buy them for bargain rates.
One knowledgeable person said that with low overhead, Docu could get away with laying out a relatively modest $30 million to get the network going and keep it in programming for the first few years.
In this model, subscriber fees from cable operators and revenues from advertisers probably wouldn’t start coming in until year three.
Forbess said that as the word gets out about the channel, Docu will be looking for equity partners, including both production companies and large cable operators who agree to carry the service on their systems in exchange for an ownership position in the network.
Docu maker Thomas Neff will be president and chief operating officer of Docu.
Communications Equity Associates has signed on as financial adviser of the channel.