Stepping Stones - Broadcasting & Cable

Stepping Stones

With more cable systems coming aboard, TV One is on its way
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Cable networks that have sought to replicate
BET's success with African-American audiences have come and gone like the
latest hip-hop star. But TV One stands a better chance than most for making the
cut. Comcast Corp. owns almost 40% and has aggressively launched the
lifestyle-and-entertainment network in many of its urban systems. Broadcaster
Radio One is controlling partner, and venture capital firm Constellation One
owns 10%.

President and CEO Johnathan Rodgers, who used to
run Discovery Channel, has surrounded himself with a veteran team of former
senior executives from Discovery, Turner and Comedy Central. TV One, which
debuted in January, has three new shows lined up for the fall: a cooking show,
a makeover program and a food program. The network even has a "returning"
show,
Living It Up With Patti LaBelle.
Comcast, Charter and Adelphia are on board, with Cox expected to carry the
network this fall. Time Warner Cable and Cablevision are dicier propositions,
but TV One has mainly analog launches for which it charges in the 5¢- to
9¢-per-subscriber range. Recently, Rodgers talked about TV One's plans
with Andrew Grossman.

In the realm of competing against BET, many are
called, but few are chosen. Why should TV One succeed?

BET's self-selected audience is primarily 18-34, with their median age
being around 21 or 22. We're going after adults 18-49 and 25-54. The essence of
BET is primarily the music videos, their standup comedy. We are into more
lifestyle-and-entertainment programming. We do not regard ourselves as a
competitor to BET. They are just too powerful and too well established. Our
audience is totally underserved on cable, and broadcast as well.

You seem to have a lot of acquired programming
on your schedule. Don't operators like to see more original
programming?

Yes and no. That's why we evolved as a lifestyle-and-entertainment
network: because I'll be able to ramp up to more original programming faster.
We in the cable industry also know that, when we beat the [broadcast] networks
in ratings, it's Law & Order on TNT,
it's CSI on USA. From a marketing point of
view, if I have limited funds and limited distribution, I would rather spend my
money pushing my original shows. Prime time will be, like most cable networks,
a mix of original and acquired programming. While most cable networks are about
80% acquired, our goal in even our first full year will be to be 70% acquired
and 30% original [on a total-day basis]. Lifetime is, in fact, the model, and
they are 80-20, acquired to original.

What's the role TV One plays for black
viewers?

African-Americans watch 50% more television weekly than does the general
population. African-Americans watch television differently. When you look at
the top 25 ratings for the general population, rarely does it mirror the top 25
ratings for the African-American population. African-Americans love to watch
programs that are about us, respect us, show our history and culture, and
feature us. I was looking at an ad for the upcoming The
Apprentice
, and I had sort of mixed emotions when I saw the gallery
of participants. On the one hand, I said, "Here we go again, one black male,
one black female. Is that all we're going to get out of life?" Then I said,
"Hey, that's why TV One exists."

But skeptics wonder if operators don't need TV
One, because African-Americans are already watching cable.

No operator has said that to us. On top of that, the moment BET was
sold, there was no major African-American-owned network on cable or satellite,
and that is the real tragedy. [Hypothetically,] if you live in South Dakota and
you've never seen an African-American, if you see BET you'd be inclined to
believe that's the way all African-Americans are. It's important for the
diversity and understanding of this country that a service like TV One
exists.

You do public affairs but not news per
se.

The majority of the original programs we've had on since we launched are
public-affairs programs. We have fresh live interviews with black Americans.
You have [Secretary of State] Colin Powell talking about why he believes in
affirmative action; you have [National Security Advisor] Condoleezza Rice
talking about why she can't forget that she's an African-American because she
was in Birmingham that Sunday morning when those four little girls were blown
up in church. Where we will not be active is in the news area, which is a
lesson I learned at Discovery. If the audience expectation is that you don't do
news or that's not who you are, then you shouldn't do it.

You have yet to sign carriage deals with Cox,
Time Warner and Cablevision.

We've having real positive conversations with Cox and Time Warner. I
said to my affiliate-sales people I'd love to be in communities where
African-Americans live first. Because 50% of all African-Americans live in the
top 25 markets, I've asked them to focus on those markets.

Is it ironic to you that Time Warner is headed
by Dick Parsons, an African-American, and yet Time Warner systems are resisting
TV One?

As an African-American executive who has run multicultural companies, it
always bothered me that people would think, just because I was black, I would
favor them. The fact is, business is business. We don't even go to Dick Parsons
to talk about TV One; we go to [Time Warner Cable chief] Glenn Britt.

You're not offering launch fees. How do you
expect to get analog launches?

One, we are a great business proposition. Two, the operators recognize
the value of the service, and we have a hidden gem. Our partner is Radio One,
and it has 68 radio stations. Plus, we have deals with urban cable systems. We
just promote all the time. I use radio and television. We may only be in 4.5
million homes, but I can reach millions of people through the radio airwaves.
And I'm on the radio all the time pushing TV One and saying, "Buy your digital
box, buy your high-speed Internet." That's my promise to the cable operator. We
are so well funded that I have enough money to do the right thing from day one.
But long term, we have to convince the cable operators that we have to be
partners in the same way that they are partners with ESPN and are partners with
TNT. We're not a service that gives away distribution. That is not a model for
success.

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