Just Barely Out

New gay-oriented networks are finding a niche on cable, VOD and digital tiers
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Here’s how we know gay TV is starting to arrive: This month, both Viacom’s Logo and Regent Entertainment’s Here! are premiering soap operas, and while they might not be like the ones you see on network TV in the afternoon, the genre is as traditional as the evening newscast.

Gay is going mainstream. With some $600 billion in consumer spending power, gays, lesbians, bisexuals and transsexuals are more attractive to advertisers and TV programmers than ever before. “I think the advent of digital and the ability to deliver content in different ways, coupled with more people living openly gay lifestyles, made this the right time,” says Karen Flischel, general manager of year-old premium gay channel Here!.

Thus far, two gay-oriented networks have made some strides. Logo, which started June 30, models itself as a general-entertainment cable network for the gay community. It now has 18 million subscribers. Here!, which is more a pay-per-view channel than a traditional full-time network, reaches into 45 million homes.

Logo plans to offer news, sports, comedy, drama and reality; Here! plans a schedule of premium series, made-for-TV movies, miniseries and feature films. Logo relies on subscription payments from cable operators and advertising to stay in business; Here! is more dependent on video-on-demand (VOD) and subscription video-on-demand (SVOD) users.

Two other gay networks have developed less traction, so far.

Q Television, which is slowly being rolled out, is a pay network available to 400,000 subscribers on RCN cable systems and a few Time Warner Cable and Cox Cable systems. Its hook for cable operators is that it goes only to subscribers who want it, so viewers offended by gay material won’t be bothered.

There’s also Proud Television (formerly PrideNation Network), an Internet-based network delivered online to computers or through a specialized set-top box to a home’s television or wireless devices.

Logo has grown by 5 million subscribers since its launch less than four months ago. At 18 million, it’s almost halfway to its total available digital capacity of 40 million homes, says Lisa Sherman, the channel’s senior VP/general manager.

Logo also has quickly added advertisers. Besides its original sponsors—Subaru, Orbitz, and Viacom’s own Showtime and Paramount—the network has signed up some 35 additional companies. Those include American Express, General Motors, Anheuser Busch, Miller, Disaronno and eBay.

“As we think about selling, we go to those advertisers first who already have been in the gay market,” Sherman says. “And they are thrilled to have the chance to reach 18 million households very efficiently when, before, they could only maybe reach 130,000 with the country’s biggest gay magazine.”

Logo’s soap opera, Noah’s Arc, about four Los Angeles-area gay black men, premieres Oct. 19, and Subaru has designed three gay-targeted advertisements for the channel. Besides featuring gay characters, the ads also drive viewers to Logo’s Web site, where they can register to win prizes. “It’s that relationship, that emotional connection with viewers, that advertisers are looking for,” Sherman says.

Among Logo’s other program selections: In reality show Open Bar, a recently “out” guy opens a gay bar and gets a quick education in business; in First Comes Lov , Kids in the Hall’s Scott Thompson and his team plan dream gay weddings.

The channel also features gay comics, including a standup show taped in West Hollywood and the BBC’s The Graham Norton Effect, which also airs on sister network Comedy Central.

“The gay audience is always on the leading edge of many things, and they are definitely on the leading edge of pop culture,” says Sherman. “We consider this a general-entertainment network for gay people. It is totally the portfolio approach.”

On-demand and subscription buys for Here! are increasing 15% per week, according to network CEO Paul Colichman, also a partner in parent company Regent Entertainment. That’s faster than initially projected.

But Here! is not a channel in the conventional sense. You have to pay to play. Cable and satellite operators don’t have to surrender any space on analog or digital tiers to Here!, but the channel offers operators an attractive revenue-sharing program that is better than many VOD arrangements.

While Logo goes after subscribers of digital basic cable, Here! is chasing an even higher-end consumer: one who is willing to learn new technology and pay for exactly what he or she wants to see.

Here! is available as a “linear channel,” as the network calls it, on DirecTV. Everywhere else, it’s available as pay-per-view, VOD or SVOD.

On Comcast, for example, viewers pay $3.99 for one of the channel’s movies or a block of its original programming. On EchoStar’s Dish Network, everything the channel offers is available via pay-per-view.

Still, availability isn’t everything. Here! has to alert cable subscribers to its presence and then proactively teach them how to access the channel and its offerings. “The newness of the on-demand environment is one of the big challenges for the whole industry,” says Flischel.

Here! has been heavily advertising on gay Web sites and print publications; it’s also doing promotions at gay marches, film festivals and sporting events.

And it’s promoting original programming, such as its talk show with lesbian activist Elizabeth Birch and a comedy special with Margaret Cho.

This month, it’s launching what it hopes will become one of its most popular shows: soap opera Dante’s Cove. Intended to hook repeat viewers, the show revolves around a group of gay and lesbian twentysomethings living in a converted hotel on the beach.

“We are the Pied Pipers of on-demand,” Colichman says. “We thought we were going to have to suffer the slings and arrows of being a pioneer, and, frankly, it hasn’t been as bad as I thought it would be.”

Here! doesn’t work like most cable ventures because parent Regent is a programming and distribution company and has a substantial library it can tap into for programming.

Here! will spend $50 million in 2005 on programming that it can amortize by reselling it in the international and home-video markets.

“The more original programming we do, the more money we make,” says Colichman. “Every product we do shows a profit, and that profit supports this network.”

Regent Entertainment made its name with the 1998 success of Oscar-winner Gods and Monsters, starring Brendan Fraser and Ian McKellan. After that, Colichman realized there was a market for gay programming and began producing gay films and TV.

Worldwide, he says, selling gay-themed programs is not much of a risk.

“We are so parochial in the U.S. Most of the bigger territories think the U.S. is completely bizarre on this topic,” he says. “The shows we produce play on mainstream prime time networks throughout the world, and they get big ratings.”

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