Nat Geos deal - Broadcasting & Cable

Nat Geos deal

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National Geographic Channel is willing to pay for carriage but is asking a lot from operators in return.

Industry executives familiar with the start-up network's rate card say National Geographic Channel, a venture between National Geographic and FOX Cable, is offering launch fees of $3 to $5 per subscriber, but wants a 16-cent monthly license fee in return. That's high for a start-up basic cable network, even one paying launch fees.

But in their attack on Discovery Networks' slate of science and adventure channels, Nat Geo officials are betting that their brand and strong legacy in nature and adventure production and publishing will persuade MSOs to pay.

Nat Geo will offer $5 a subscriber for 2000 roll-out on 70% of an MSO's 2000 subscriber base, $4 if the roll-out is in 2001 and $3 for 2002. For 60% of the subscriber base, the price drops a dollar for each year, and for 50%, it drops a dollar again-$3 in 2000, $2 in 2001 and $1 in 2002. The 16-cent license increases 1 cent annually over the life of a 10-year deal.

"That's pretty pricey," said one of several cable executives interviewed. "Some people would rather have the cash, and some would rather have the [license-fee] stability." Start-ups that don't offer launch fees generally don't get any license fee at all. But even other recent start-ups that paid similar launch fees didn't stretch for a 16-cent license fee. HGTV, for example, gets about 5 cents per month. Animal Planet gets around 6 cents.

Nat Geo would not comment on the rates. AT & T, DirecTV and Adelphia have already committed to wide carriage of the network, though on terms different from the current rate card.

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