Courting Niche Viewers

Small networks devise clever marketing tactics to lure subscribers

After three years in the U.S., TV5—the French-focused cable
channel—has found the perfect way to entice subscribers: buy them a gourmet
dinner and teach them French.

Partnered with Time Warner, the channel offered free dinners at 10 of
Manhattan's top French restaurants to 50,000 upscale digital subscribers as a
reward for signing up. A similar TV5 mail campaign conducted with Adelphia in
Beverly Hills, Calif., in November and December offered an estimated 65,000
digital subscribers eight weeks of free French lessons.

TV5's marketing effort paid off. Working with cable partners Time
Warner, Adelphia and Cox, it averaged a 1% conversion rate—a combined total
of 5,000 new subscribers.

Indeed, in a cluttered TV landscape, niche cable networks see an
advantage in appealing to a narrowly defined audience base. But they have to go
that extra mile to attract subscribers. To compensate for a lack of funds,
especially in their first few years, budget-strapped networks are devising
clever marketing campaigns, often teamed with cable companies, to attract the
select group of customers they desire.

Yet even with the help of three of the largest cable operators in the
U.S., “it's a challenge,” says Patrice Courtaban, COO of TV5 USA. He says
all of them provided essential funding for the promotional campaign, as well as
key access to their companies' databases. Though the network is the
third-largest international channel, backed by state financing from France,
Belgium, Canada, Quebec and Switzerland, it's struggling in the U.S.

By the end of 2004, TV5 had persuaded only 36,000 subscribers to pay an
extra $10 a month to add it to their cable lineups. Thus, the ability to zero
in on potential new customers, a specific microcosm of Francophiles, is
critical to increasing TV5's presence here.

To capitalize on its promotional success, TV5 will launch creative
mailings in new markets, including Boston, Washington and Chicago, this fall
and will team with Alliance Francaise in March to offer three months of free
TV5 for new students.

“Niche networks have to get involved in this sort of bootstrap,
one-viewer-at-a-time marketing because the TV landscape is so fragmented,”
says Gerry Philpott, president and CEO of E-Poll, an Encino, Calif.-based
market-research firm specializing in broadcast and cable television. “Even a
small network still has to be supported by millions interested in the subject.
If they don't, it's almost impossible to survive.”

Moreover, networks that aren't subscription-based need something more:
Advertisers that want to reach their viewers, connections to the cable
operators for carriage deals and programmers that can provide content.

“You have got to have at least one of the three legs of the stool
before you can even consider trying to launch something,” says Philpott, who
estimates six to 10 networks attempt to launch each year.

Cable partners

One key way for niche networks to stay afloat is to partner with cable
giants. Pairing with a cable operator is productive and efficient, says Cathy
Rasenberger, president of Rasenberger Media, a consultancy that assists
startups. “The best way to market is to promote together. It's
cost-effective and highly directed to the consumer the network is trying to

To that end, NBA TV decided to join with Comcast in Denver to offer new
subscribers mini basketball hoops and tickets to the NBA All-Star Jam Session,
which the network is airing.

The Tennis Channel does even more. It pairs with affiliates to offer
free seat cushions and binoculars to cable customers who bring their bills to
matches where the network has a booth—even if they don't subscribe to the
Tennis Channel.

But getting the cable company on board isn't easy.

Niche networks need a hook. They have to convince the cable operators
they can increase digital-cable penetration, for example, or improve community
relations, says John Zamoiski, COO of entertainment and marketing firm NMA.

Zamoiski has helped niche networks, including Rainbow's on-demand
channel MagRack, endear themselves to cable companies' customer-service reps
with inexpensive lunchboxes, scented candles and board games. The personal
touch serves a dual function: It keeps the reps happy and educates them about
the niche networks.

Zamoiski also corrals national advertisers to market with the networks
as an added incentive to get cable companies on board. “I don't care if a
network has diamonds or rhinestones in their budget,” he says. “We can work
with tiny networks and still get results.”

Other networks lean on parent companies for support. TV One, a lifestyle
network for African-Americans, advertises almost entirely through Radio One, a
major investor, daily targeting approximately 13 million listeners

An added bonus of radio is the opportunity to announce TV One's
location in the cable lineup in each city. “It's one big voice that speaks
out and helps us a lot,” says Susan Banks, SVP of creative services and
marketing for the year-old TV One. “It is advertising we could not afford
right now as a startup.”

Inventive strategies

By contrast, ImaginAsian Entertainment, which owns the pan-Asian network
ImaginAsian TV, took the unusual step of opening a movie theater on New
York's Upper East Side last summer, specifically to promote the network.
Posters and video clips of its programs are displayed during daily movie
showings. The company also launched ImaginAsian Radio, a weekly variety hour in
San Francisco, to cross-promote the TV network. Plus, discussions are in
progress to open movie theaters in California.

CSTV, the College Sports TV network, is taking a more conventional
approach to marketing itself. The network is running “TGI Hockey”
sing-along spots and distributing pocket schedules in college arenas to attract

Of all the niche networks, Sí TV—geared to hip young
Latinos—has mastered the art of the freebie. During the 2004 presidential
campaign, it teamed with Rock the Vote, a nonpartisan, nonprofit organization,
to lavish college kids with Sí-branded lip balms, CD cases, leather
wristbands, caps, pens and postcards. Sí TV will soon hand out DVDs of
The Motorcycle Diaries, via a Web giveaway.

Network survival

For even the best of startups, says Philpott, survival can be tough. For
example, Trio, backed by NBC, earns rave reviews for its programming but is
struggling. While he won't speculate on the fatality rate of niche
properties, he says: “There is no magic bullet.”