Independent channels face significant hurdles
Comcast has started to make good on its promise to launch 10 independently owned channels on its cable systems over the next eight years.
The four agreements unveiled Tuesday offer a handful of well-placed entrepreneurs a big head start on the Herculean task of launching a cable channel from scratch. But there is plenty of hard work ahead for the channels’ backers in securing vital carriage agreements with other operators and raising the many millions required for a cable startup.
“I’ve got a lot of work to do. It’s going to be a marathon, not a sprint,” Sean Combs said in a video announcing plans for his music-oriented channel, Revolt.
The other nets on the drawing board are Aspire, spearheaded by Earvin “Magic” Johnson in partnership with GMC TV; BabyFirst Americas, from Spanish-lingo TV exec Constantino “Said” Schwarz; and El Rey, from director Robert Rodriguez and FactoryMade Ventures.
The channels were chosen from more than 100 proposals fielded by Comcast execs after the cable giant made the pledge to launch the channels — four of them with African-American ownership, four with Hispanic ownership — while it was seeking federal approval for its acquisition of NBCUniversal.
After closing the deal in January 2011, David Jensen, Comcast’s VP for content acquisition, said his team spent last summer studying the channel proposals, winnowing them to eight, then to four.
“They are all passionately programmed,” Jensen said. “We put them through their paces in terms of concept and financing. We do not want to partner on a business that will fall flat. It isn’t cheap to start a new TV channel. Ask Oprah. It’s expensive and risky.”
Oprah Winfrey’s OWN network, a partnership with DiscoveryCommunications, has been struggling since it launched early last year.
New channels can cost well over $100 million to launch, said Derek Baine, a senior analyst with SNL Kagan. “But if you have a deal with Comcast right out of the gate, it should substantially reduce that.” If these networks manage to ink deals with DirecTV or Dish, “It could be pretty fast path to break even,” he said.
Aspire, to launch by this summer, aims to celebrate the achievements of African-Americans through movies, documentaries, short films, music, comedy, visual and performing arts and faith and inspirational programming.
“I’m most excited about Aspire creating opportunities for the new voices, new visions and the next generation of storytellers,” Johnson said.
Magic Johnson Enterprises is the primary investor, with Ron Burkle’s Yucaipa. Aspire was developed with indie cable outfit GMC TV. The former Gospel Music Channel, backed by Leo Hindery’s InterMedia Partners, was created in 2004 and is in nearly 52 million homes.
GMC vice chairman Brad Siegel, former prexy of Turner Entertainment Networks, said the Aspire group met at least four times with Comcast execs in a rigorous vetting process and “made a very compelling story for why Aspire is needed and why it’s something that is different than anything else that is out there.”
Aspire has been out making presentations to all MSOs for wider carriage. “I think what they are seeing is a network that you want to have on your system,” Siegel said. “It will really make them look great in the community.”
Revolt, from Combs and MTV Networks alum Andy Schuon, will feature programming inspired by music and pop culture with musicvideos, live performances, music news and interviews, and it will have a strong social-media component. The net has inked a deal to launch in 2013.
El Rey, a venture of Rodriguez, Fogelman and Cristina Patwa, a partner with Fogelman in FactoryMade, is designed to be a general entertainment outlet with emphasis on Hispanic talent and personalities. It’s shooting to launch by January 2014, if not a little sooner.
BabyFirst Americas is designed for infants, very young children and their parents and emphasizes verbal, math and motor skills. The network has entered into an agreement to launch by April.
Schwarz, who most recently founded media consulting firm Tino TV, has worked in distribution and marketing at Turner Broadcasting and Disney-ABC Cable Networks and served as a Fellow of the TV industry’s Walter Kaitz Foundation. Schwarz is the primary investor in BabyFirst Americas along with L.A.-based toddler production company BabyFirstTV, whose main shareholders are New Regency, Dutch holding company Kardan and Bellco Capital in Los Angeles.
BabyFirst Americas head of programming Mario Solis-Marich said he’s also an investor in the net, whose mission is to offer Latino parents the ability to help their children integrate into American society while maintaining a strong connection to their Latino heritage and bilingual communication.
Comcast did not specify the specifics of its distribution plans for the various nets, except to say that they will be added on select Comcast systems as part of a digital basic tier.
“Our intention is to try to give a very robust rollout” on most large systems across the country, Jensen said. “The commitment to do a major wave of independent, multicultural programming is something really unprecedented. Doing 10 channels that are independent in the next eight years is the equivalent of all the channels we have launched in the eight years leading up to this.”