Second-time charm?

MTV's music-centric spin-off has locked in only 12M subs and has failed to catch on with cable operators
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Nearly four years ago, when MTV spun off its eclectic music video channel MTV2, the music landscape looked a lot different. Then, savvy Web browsers and music enthusiasts had at their fingertips only a fraction of the hundreds of music-friendly Web sites that exist today.

Now, the burst of Web sites offering consumers the chance to sample, click and buy scads of titles from pop hits to out-of-print classics has re-jiggered nearly every aspect of the business of making and selling music, right down to spinning the music video.

MTV's shows Web Riot and Total Request Live are giving control to viewers, who are treating music video channels like jukeboxes by turning them on, logging onto their corresponding Web sites and chiming in their preference for what will pop up on TV next.

All that has created a ripple effect that threatens to swallow the fledgling MTV2.

"Essentially, MTV2 is meant to be the pure music complement to MTV," says MTV2's General Manager David Cohn. "That's the simplest way of describing our mission."

But sticking to the keep-it-simple sales pitch hasn't paid off as grandly as MTV would have liked for its music stepchild.

MTV2 has locked in just 12 million subscribers since its launch in August 1996, the bulk of them from satellite TV providers including DirecTV and EchoStar. Only a fraction of its viewers come from basic cable homes.

MTV General Manager Van Toffler would rather see MTV2's subscription base hovering around 20 million. He contends that the channel is delivering the core viewers it intended to reach, just not enough of them.

"I think we aimed it at a target of music lovers and music purists, and it's achieved that," says Toffler. "I equate it with the same underground, bohemian sense the Internet had years ago."

Toffler scoffs at the idea of folding the channel completely, especially when there's room on the digital dial. "We're not going to scrap MTV2 and start over," he says. "We're confident we can make it a compelling product and get sufficient distribution to make it a viable channel."

Cohn insists that MTV2 has fallen prey to the fate common to other young cable networks still struggling to gain carriage on cluttered basic cable lineups.

"Sometimes, we've won deals to be added to systems, and sometimes we haven't," says Cohn. "Just going in and saying we are the music video lovers' channel was enough. But, with all the changes in the industry, just being a pure music video channel is probably not quite enough."

Over the next several months, MTV plans to overhaul MTV2, to turn it into what Cohn describes as "a laboratory for the MTV brand."

On tap are plans to ramp up the channel's connection to the Web sites mtv.com and mtv2.com with interactive features for viewers. Most notable is the launch this month of the show Control Freak, which allows viewers to vote online for one of three songs that they'd like to appear next on MTV2.

MTV2 also is talking with a number of record companies about striking up a promotional partnership, similar to the sponsorship arrangement that MTV has with Web-based CD seller, CDNow.com, says Toffler.

Then there's the tie-in with operators on the programming source side.

MTV will start hyping more heavily MTV2's potential as a content source for operators hungry for programming to plug into streaming video form that is accessible over high-speed cable modems.

"I think we can be the interactive music channel for operators to sell through the new technologies of digital and broadband systems as they come into the home," says Cohn. "We think there's a strong connection between a person who is adventurous in their music tastes and someone who is likely to be the first on the boat to sign on for new cable services in digital and broadband."

Says Toffler, "I think the MTV audience in droves is discovering and ordering music over the Internet. And the MTV2 viewer is predisposed to buy the CD of an artist they like because the channel is aimed at music lovers and purists who go out and buy CDs."

Still, there's a flock of operators, not to mention viewers, who've never heard of MTV2 and don't know why they need a sister channel to something they already have that is working. Toffler says the network has "thought a lot about" renaming MTV2 over the years but each time scrapped the idea "because there's so much equity in the MTV brand name."

To get attention, MTV2 pumped out its first music video countdown marathon on New Year's Day this year, "MTV2: A-Z," in which the channel played 19,000 videos from its free-form playlist that spans hip-hop to heavy metal, country to jazz. Last month, MTV2 announced plans to sponsor the band Nine Inch Nails' spring tour-a first for the channel. To hype the event, MTV2 let NIN leader Trent Reznor take charge of the video playlist for a while.

"You have to be more creative from a business perspective, as well as a programming one," says Toffler, "to get the service out there."

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