Three years ago, Viacom ponied up $2.9 billion to acquire BET, the cable channel Robert Johnson created in 1980 with the help of former TCI chief and Liberty Media head John Malone. BET has always been a high-margin business without a true competitor in its space. But now, with Comcast and Radio One starting up their own African-American channel, TV One, the field is getting a second viable player.
The BET chairman and CEO, who pledges to complete the three years left on his five-year contract, is nonetheless busy with other ventures these days, including 12 hotels and a new NBA franchise in Charlotte, N.C. He hasn't decided his next move at BET but promises that the channel is in good hands with President and COO Debra Lee, a 20-plus-year BET vet.
With the NAMIC conference this week and the Kaitz Foundation dinner Sept. 17, Broadcasting & Cable's Allison Romano turned to the outspoken cable pioneer to reflect on minority programming and his gripes about cable operators. An edited transcript follows:
In 23 years, you've built BET into a successful channel with 70 million subscribers. Why do you think other African-American–targeted cable channels have failed to achieve similar growth?
The industry treats black-oriented programming with benign neglect. They really don't believe it is a revenue driver. Most of the programming decision-makers don't identify with it. They feel they have a black subscriber base without any programming that appeals to them.
For example, four or five years back, I wanted to create a black family channel. We developed a program model, proposed several types of structures, a C-SPAN– type—joint ownership with the industry and BET—or another where [operators] would share in the upside revenue after we recouped programming costs. We got it endorsed by every civil rights and social organization you could imagine. And we got absolutely no takers for the concept.
There are three Spanish-language broadcast networks, at least 10 Hispanic-targeted cable networks. Do you think African-American–targeted programming is getting the appropriate support?
I am pleased that there are more Hispanic channels. ... Yet here is what I can't quite understand. We've been told by one large cable operator that they want to cut our subscriber fees. At the same time, they say there is a need for more diverse programming. It makes no sense. How can [operators] expect to support two dynamic programming channels that can compete for the millions of black subscribers who have been underserved by the cable industry for the last 20 years and at the same time ask for a rate reduction?
I think it just shows that the industry is not as committed in dollars and cents as in public expressions like NAMIC or Kaitz that pay lip service to diversity.
Radio One and Comcast are preparing to launch TV One. Is there room for a second African-American channel to thrive?
To say this industry can't support two black channels is ridiculous. The guys at TV One have challenges—just like any other programmer—to create compelling programming that people want to watch at a cost they can afford, to get carriage from cable systems outside of their partner, and to get advertisers to look at them when there are so many options. ...
My argument is with the cable industry. The cable industry ought to put dollars behind BET and TV One. There should be a black pay cable channel right alongside HBO and Showtime. It would stimulate the production of black feature films; films could be placed theatrically, then put on the pay service and then sold into syndication and later on cable.
It is not a matter of lack of demand on the part of black subscribers. It is the gatekeepers who are denying access in many cases to these kinds of opportunities.
You said one operator wants you to take a rate cut. What kind of subscriber rates do you think BET should be getting?
BET probably has the lowest subscriber fee of any channel that has been around 20 years. Why, when BET is as old as MTV, ESPN, CNN, USA Network? I think it is a failure on the part of the cable industry to reciprocate to black subs who spend more dollars per capita on cable than white subscribers. We get 15-16 a sub. We should be getting 45-50 per sub. It would have been a 2-per-year increase over 20 years.
If "Diversity Week" means anything, it should be to bring to the attention of the industry that there is a deficit between black subscribers and money going in to produce compelling programming of interest to African-American viewers and delivering cable channels targeted to African-Americans. I think the issue of original programming is clearly tied to distribution and sub revenue.
How has the muscle of Viacom helped BET in the past two years?
When they came in, they said continue to run BET the way you have in the past. Focus on your target audience, grow your business and maintain your editorial integrity. At the same time, whenever we need support in marketing from our sister channels, like on our music-awards show on MTV, cross-promotion on UPN for our programming, or the unique joint-venture partnership with CBS News, we get it.
BET has been knocked for focusing too much on music and cheap programming. How do you respond to this criticism?
I have always said BET's primary product is music entertainment. Music is the quintessential art form in African-American society. ...
People who criticize BET are criticizing simply because we can't be everything they wanted us to be. We never set out to be everything. There simply weren't dollars to do it, or viewers didn't want to watch it. I don't lose any sleep over that criticism, never have and never will.