But Bob Johnson, who created BET in 1980, is banking on YouTube’s pay-channel platform as a way to produce a host of new programming aimed at African-American audiences — movies and shows he says would never be greenlit otherwise.
“We think there’s an exact opportunity to do in the Internet space what I did 30 years ago in cable,” Johnson said. “Getting talent and raising capital is going to be a heck of a lot easier with YouTube.”
Johnson’s RLJ Entertainment has two ad-free pay channels on YouTube: OnCue, billed as providing urban-themed programming, for $1.99 per month; and Acorn TV, which provides a selection of British mysteries and other skeins for $4.99 per month.
Right now, OnCue features films and series spanning multiple genres, including action, drama, romantic comedies, standup comedy, documentaries, music and stage plays. Among current selections: “35 & Ticking,” starring Kevin Hart and Meagan Good, “All Things Fall Apart,” starring 50 Cent and Lynn Whitfield, and the “I Ain’t Scared of You” special featuring the late comedian Bernie Mac.
In 2014, RLJ intends to launch first-run programming produced for OnCue, targeting up to two original movies or series per month.
Why YouTube? Johnson said it was a no-brainer: “YouTube has over 1 billion users. Our customers will find us in the Internet sphere, not only nationally but internationally.”
Another attractive feature is that “there are no real gatekeepers” with YouTube’s model, he said. “This is the first time there’s ever been a minority-owned channel that doesn’t have to please cable operators, cable networks, movie studios or advertisers,” Johnson said. “This will be liberating.”
In addition, there’s no exclusive arrangement in the agreement with YouTube, which means RLJ could take it to other distribution outlets if it chooses to.
With OnCue, Johnson wants to gain a first-mover position with a digital network aimed at African-American auds featuring content that he claims wouldn’t find its way onto cable or into movie theaters because it would be deemed “unmarketable.”
“We’re not talking about heightened violence or heightened sexuality — we’re talking about stories that have never been told,” he said.
OnCue’s programming could encompass reality series, or movies about “black heroes” who have never been portrayed on TV or in the movies, according to Johnson, mentioning the “great Carthaginian general Hannibal who sacked Rome. He was black.” (According to historians, while Hannibal was from northern Africa, he would not have been described by Romans as “black.”)
About 2 million African-American households subscribe to HBO or Showtime, Johnson said, citing Nielsen figures. “Our content may not have big budgets like on HBO or Showtime, but it will be stuff you haven’t see in African-American programming,” he said.
Meanwhile, to make the economics of Internet video work, RLJ plans to distribute the original content through other channels in subsequent windows, either on DVD through Walmart or Redbox; other streaming services like Netflix or Hulu; or even cablers like BET and TV One.
“One of the biggest impediments to African-American and urban titles is the studios don’t believe there’s a backend to these shows,” Johnson said.
RLJ’s other YouTube pay channel, Acorn TV, is aimed at anglophiles. It launched last year on Roku set-tops and Barnes & Noble’s Nook tablets and has about 25,000 subscribers through those platforms. Right now, the version on YouTube offers 150 hours of content, and the company plans to expand that in July to about 800 hours. Then, in the fall, Acorn TV will begin premiering new releases on a monthly basis, said RLJ Entertainment topper Miguel Penella.
Johnson formed RLJ Entertainment in October 2012 through merger of RLJ Acquisition, Image Entertainment and Acorn Media Group. The Bethesda, Md.-based company licenses and distributes about 5,300 titles in North America, the U.K. and Australia.
For the full-year 2012, the publicly held company reported $181 million in revenue and a net loss of $20.7 million on a pro-forma basis (incorporating the results from predecessor companies prior to the merger).