Diginets Struggle For Place On TV’s Frontier

Multicasting — TV stations’ incipient business of broadcasting programming on digital subchannels — looks a lot like cable 30 years ago. It comprises a proliferating array of low-cost networks, many of which rely heavily on reruns and movies.

And just like cable 30 years ago, multicasting is starting to gain a little traction with viewers and advertisers as the reach of the networks (aka multicast channels or diginets) steadily increases.

“There are a lot of options out there and station groups are now seeing these [diginets] as being stable, good options to be in bed with,” says Sean Compton, president of programming and entertainment, Tribune Broadcasting, purveyor of diginet Antenna TV.

But it is still not clear whether the diginets will prosper as cable networks have. All rely on advertising alone and, right now, much of it is of the direct response variety. There are no retrans fees from cable and satellite to help bear the costs and little prospect for them. It’s a hard way to go.

“I’d be surprised if there’s anybody out there that is making any significant money at this point,” says Jim Trautman, managing director of Bortz Media & Sports Group, which tracks multicasting developments. It will continue to grow, but it is a “very long-term business proposition,” he says.

It’s still in “uncharted territory,” says Steve Ridge, president of the media strategy group at Frank N. Magid Associates. “We are in a phase of heavy, but cautious experimentation because the economics have not been there to support significant upfront investment. People are trying things, but they are trying not to be over-committed because they don’t know if it is going to be economically viable.”

To get a handle on that experimentation, TVNewsCheck surveyed as many diginets as it could find (23 as it turned out) to see what kind of programming they offer, what their basic proposition to potential affiliates is and how far along they are in distribution (see capsules below).

A note on distribution: In this story and the adjacent chart, each network is credited for the aggregate over-the-air coverage of all its affiliates. Cable and satellite carriage (or the lack of it) does not figure into the percentages.

In an earlier story, TVNewsCheck explored how some stations in markets with a shortage of full-power stations were using subchannels to broadcast CW, MNT or even the Big Four networks.That trend is not a part of this report.

Nor is the use of subchannels for local programming, typically news and sports. NBC Owned Television Stations is leading the charge on this front with its news and lifestyle channels. It’s now committed to launching nine Nonstop channels, including one that will cover three markets in California (San Diego, Los Angeles and San Francisco).

With the exception Ion Media, the diginets are actively looking for affiliates to extend their reach to as many of the nation’s 116 million TV homes as possible. The enticement in nearly every case is a share of advertising inventory.

If diginets are experiments, there are plenty of experimenters. The TVNewsCheck survey found that virtually every major TV station groups is airing diginets or multicast channels of one kind or another.

Among the majors, only CBS and Fox have yet to take the plunge. And in the case of CBS, that may soon change. It’s expected to announce soon some kind of play.

Clearly, the strongest of the English-language diginets at this point is This TV, the joint venture of MGM Entertainment and Chicago-based Weigel Broadcasting. Launched in 2008, This TV reaches 85.6% of U.S. TV homes with top MGM movies and classic TV shows.

The old independent formula still works, says John Bryan, president of MGM Domestic Television Distribution, which distributes the network. “On many nights, we’ve beaten a lot of the basic cable networks,” he says.

What nights? May 4, for one, says Bryan. On that day in primetime, he says, This TV posted bigger numbers than SOAPnet, Hallmark Channel, VH1, E!, WGN, We, TV Guide and ESPN2, among others.

Other diginets using some variation of the formula include Me-TV, Antenna TV and Retro Television Network (RTV).

Me-TV, owned by Weigel and based on one of its Chicago independents, rolled out nationally last December and already reaches around 40% of homes. MGM helps to find affiliates for the service.

“We are just six months old at this point and are optimistic that profitability will follow,”  says Neal Sabin, president of content and networks for Weigel, noting that the network is attracting national advertisers like AARP, Allstate, United Health Care and St. Jude Hospital.

Luken Communications’ Retro Television Network (RTV) is in 66% of TV homes. And Tribune Broadcasting’s Antenna TV, which debuted in Jaunary, already covers 51% of  the country.

On the English-language side of the diginet world, a string of niche networks is also looking for affiliates. They include TheCoolTV (music), The Country Network (music), Live Well (lifestyle), PBJ (children), Universal Sports, Untamed Sports and Bounce TV (ethnic).

Bounce TV, which targets African Americans between 25 and 54, is slated to launch Sept. 26 with affiliates covering 32% of the country.

Bounce TV’s creators argue that their diginet is unique. “It fills the void for an over-the-air, 24/7 network exclusively for African Americans, and it fills the need for digital programming for local broadcasters,” says Bounce TV President Ryan Glover.

Diginets with “fresh new ideas” like Bounce TV and TheCoolTV have the best chance for survival because “they are different than what you normally see on broadcast TV,” says Mike Ruggiero, a retransmission consent consultant to stations who has a stake in TheCoolTV.

“If you make the decision today to launch a diginet, it has to be different, it better be saleable and it better have a good catch to it,” says Ruggiero.

TheCoolTV CEO Joe Comparato believes his diginet possesses all of those attributes, of course. “We’re starting to show up on the radar of the advertisers. We expect 2012 will be a hypergrowth year for us,’’ he says, noting that Geico, Progressive and Nationwide are already on the advertising schedule.

ABC’s Live Well Network has something that most of the other diginets don’t: plenty of original programming. Shows on home, travel, food, fashion and beauty come from the ABC O&Os and from independent producers.

Joining the ABC stations in broadcasting the network, which ABC VP Peggy Allen says has been in the black since its launch in 2009, are a collection of stations belonging to Scripps, Belo and Lilly. “We are on target to hit 50% [of TV homes] this fall with a goal to hit 60% by the end of the year,” says Allen.

Multicasting has not missed the fact that the Spanish-language broadcasting audience is growing rapidly. Estrella TV, Azteca America, LATV, Mega TV and Mexicanal are all going after it on subchannels. So far, LATV has had the most success with lining up affiliates, claiming an 82% reach. Estrella TV and Azteca America are close behind.

Broadcasters primary interest in diginets is to make a buck, but they may also see them as a hedge against the federal government’s drive to take back underutilized TV spectrum so that it can auction it off to wireless broadband operators (a higher use, the FCC believes) and raise money for the federal treasury.

Me-TV’s Sabin thinks the machinations in Washington are driving at least some of the growing interest in finding programming to fill out digital channels. “They may feel they have to use or lose it.”

ACCUWEATHER TELEVISION NETWORK

Ownership: AccuWeather Inc. Launch: 2005 Programming: Local weather; affiliates are responsible for providing their own educational children’s programming. Affiliate deal: Stations receive the majority of ad inventory. Coverage of U.S. TV homes: 27% Major affiliates: Gannett Broadcasting, Belo Corp., Gray Television, Cox Media Group Contact: Steve Miller, 814-235-8646, [email protected]

[datatable title=”TV’s Diginets: Vying for Subchannel Space” align=”right” width=”40%”]
Network
AccuWeather(#accuweather)
America One(#americaone)
Antenna TV(#antennatv)
Azteca America(#aztecaamerica)
Biz TV(#biztv)
Bounce TV(#bouncetv)
Estrella TV(#estrellatv)
Ion Life(#ionlife)
LATV(#latv)
Live Well Network(#livewellnetwork)
Mega TV(#megatv)
Me-TV(#metv)
Mexicanal(#mexacanal)
My Family TV(#myfamilytv)
PBJ(#pbj)
Qubo(#qubo)
Retro Television Network(#retro)
TheCoolTV(#thecooltv)
The Country Network(#thecountrynetwork)
This TV(#thistv)
Tuff TV(#tufftv)
Universal Sports(#universalsports)
Untamed Sports(#untamedsports)
[/datatable]

AMERICA ONE

Ownership: One Media Corp., a privately held corporation based in Dallas. In addition to America One, the company owns B2 Broadcasting, a broadband transport company; OneSportsPLUS.com, which provides live broadband college and pro sports events; and One World Sports (OWS), a broadband network specializing in Asian sporting events. Launch: 2009 Programming: A mix of entertainment and U.S. and international sports in primetime. During the day, it airs cooking and travel shows as well as news and classic movies. The network also provides three hours a week of children’s educational programming. Affiliate deal: Affiliates keep four minutes per hour, plus end breaks. The network encourages its affiliates to insert up to four hours per day of local sports, entertainment or news. Stations are responsible for securing cable carriage. Major affiliates: Cocola Broadcasting Coverage of U.S. TV homes: 10% Contact: Robb Hudspeth, 817-546-1370, [email protected]

ANTENNA TV

Ownership: Tribune Broadcasting Launch: January 2011 Programming: A mix of classic TV shows such as All in the Family, Sanford and Son, The Nanny, Married with Children, Father Knows Best and Dennis the Menace and movies from Columbia and Sony. It provides three hours of children’s educational programming on Saturday. Affiliate deal: Affiliates get five minutes per hour for advertising. Stations negotiate cable carriage. Coverage of U.S. TV homes: 51% Major affiliates: Tribune and Local TV LLC Contact: Bina Roy, 773-883-6260, [email protected]

AZTECA AMERICA

Ownership: TV Azteca, a Mexican broadcasting company that owns and operates TV stations as well as three national TV networks. Launch: 2008 Programming: Spanish-language news, sports and entertainment programming from parent company TV Azteca’s three networks. Azteca America also offers seven hours a week of educational children’s programming. Affiliate deal: 50–50 advertising split with affiliates. Stations are responsible for cable carriage. Coverage of U.S. Hispanic TV homes: 67.2% Major affiliates: McGraw-Hill Broadcasting, Tribune Broadcasting, Titan Broadcast Management. Contact: Juan Pablo Alvarez, [email protected]

BIZ TV

Ownership: Principally owned by Penny Entertainment, which also operates a website that streams high school sports in Texas. Launch: January 2010 Programming: Original programming aimed at the small business community and entrepreneurs. It provides two hours of children’s educational programming on both Saturday and Sunday. Affiliate deal: Affiliates get five minutes per hour for advertising. Stations negotiate cable carriage. The network allows affiliates to preempt overnight and weekends for infomercials. Coverage of U.S. TV homes: 14% Major affiliates: Independent stations KAZA Los Angeles, KAZD Dallas-Fort Worth, KYAZ Houston, KLPD-LP Denver and KTMW-LP Salt Lake City Contact: Pete D’Acosta, 817-274-1609, [email protected]

BOUNCE TV

Ownership: The network would not identify its principal investors. Launch: Slated for Sept. 26 Programming: The network targets African Americans between 25 and 54 with a mix of movies, live sporting events, documentaries, specials, inspirational faith-based programs, off-net series and original programming. It will provide three hours a week of educational children’s programming. Affiliate deal: 50-50 advertising inventory split. Stations are responsible for cable carriage. Coverage of U.S. TV homes: 32% as of July 12 Major affiliates: Raycom Media, LIN Media, Nexstar Broadcasting, Belo Corp. Contact: Jeffrey Wolf , 516-848-3377, [email protected]

ESTRELLA TV

Ownership: Liberman Broadcasting Launch: 2009 Programming: A wide variety of Spanish-language programming including comedy, reality, drama, talk, national news, musical variety and game shows. It features talent from the U.S., Mexico and Latin America. The network also provides three hours a week of educational children’s programming. Affiliate deal: N/A Coverage of U.S. Hispanic TV homes: 77% Major affiliates: Hearst Television, Belo Corp., Tribune Broadcasting, Sinclair Broadcast Group, Sunbeam Television Corp., CCA, Titan Broadcast Management Contact: N/A

ION LIFE

Ownership: Ion Media Launch: 2007 Programming: The network targets adults 24-54 with shows on health and wellness, travel, cooking and home decorating. It also offers three hours a week of educational children’s programming. Affiliate deal: Only Ion stations carry the network; it is not looking for affiliates outside of its station group. Coverage of U.S. TV homes: 64.3% Contact: Marc Zand, 561-682-4242, [email protected]

LATV

Ownership: Primarily owned by Walter Ulloa, CEO of TV station group Entravision. Post-Newsweek Stations also has a minority interest. Launch: 2007 Programming: Original Spanish-language programming targeting 18–49 American Latinos. On weekends it offers three hours of educational children’s programming. Affiliate deal: Affiliates get five minutes per hour for advertising. Stations negotiate cable carriage. Coverage of U.S. Hispanic TV homes: 82% Major affiliates: Post-Newsweek Stations, Nexstar Broadcasting, Cox Media Group, Granite Broadcasting, Entravision, Journal Broadcast Group Contact: Marlynda Salas Lecate, 678-662-5423, [email protected]

LIVE WELL NETWORK

Ownership: ABC Owned Television Stations Launch: April 2009 Programming: 18 hours a day of original programming targeting women 18–49 that’s focused on home, travel, food, fashion and beauty. In September, it will begin providing three hours a week of educational children’s programming. Affiliate deal: Affiliates get more than five minutes per hour for advertising, but the network would not disclose a specific number. The network also gives affiliates an hour they can program themselves locally. Stations are responsible for cable carriage. Coverage of U.S. TV homes: Just under 30% (expects to be 50% by October). Major affiliates: ABC Owned Television Stations, E.W. Scripps Television Group, Belo Corp., Quincy Newspapers, Lilly Broadcasting Contact: Peggy Allen, 312-899-4243, [email protected]

MEGA TV

Ownership: Spanish Broadcasting System, a publicly traded media and entertainment company. In addition to Mega TV, the company owns and or operates 21 radio stations and LaMusica.com, a bilingual Spanish-English website featuring Latin music, entertainment and news. Launch: 2006 Programming: Spanish-language news, sports and entertainment. It also provides three hours of educational children’s programming. Affiliate deal: N/A Coverage of U.S. Hispanic TV homes: 42% Major affiliates: Independent stations WSBS Miami; WHDO Orlando, Fla.; WFHD Tampa, Fla.; and KMCC Las Vegas. Contact: Vladimir Gomez, 305-644-4800, [email protected]

ME-TV (Memorable Entertainment Television)

Ownership: Weigel Broadcasting (MGM handles distribution). Launch: December 2010 Programming: Classic TV sitcoms and dramas including, M*A*S*H, Cheers, Hogans Heroes, I Love Lucy, Star Trek, The Dick Van Dyke Show and Perry Mason. It also provides six hours a week of educational children’s programming. Affiliate deal: Affiliates get five minutes per hour for advertising. Stations are responsible for cable carriage. Coverage of U.S. TV homes: 38% (expects to be in 41.5% by Aug. 1). Major affiliates: Hubbard Broadcasting, Hearst Television, Cox Media Group, Bahakel Communications, Raycom Media, Newport Television, Media General Broadcast Group Contact: Neal Sabin, 312–705–2608, [email protected]

MEXICANAL

Ownership: Castalia Communications, an independent production company, and CableCom, one of Mexico’s largest cable operators. Launch: 2008 Programming: A mix of Spanish-language news, sports and entertainment aimed at Mexican Americans. It provides three hours of educational children’s programming. Affiliate deal: N/A Coverage of U.S. Hispanic TV homes: 30% Major affiliates: Journal Broadcast Group, Newport Television Contact: Chuck Wing, 770-396-7850, [email protected]

MY FAMILY TV (FORMERLY FAITH TV)

Ownership: A partnership between Luken Communications and ValCom, a media and entertainment production company based in Indian Rocks Beach, Fla. Launch: 2008 Programming: Family-friendly movies, game shows and classic series including Highway to Heaven, Route 66, Bonanza and I Spy. Affiliate deal: N/A Coverage of U.S. TV homes: N/A Major affiliates: A combination of full-power and low-power independent stations, including KAXT-LP San Francisco, KPHE-LP Phoenix and WHKY Charlotte, N.C. Contact: Ken Gibson, 727-375-8200, [email protected]

PBJ

Ownership: Luken Communications and Classic Media (programming distributor and rights holder). Launch: Sometime this summer. Programming: Classic children’s programming from the 1950s, ’60s, ’70s and ’80s, including The Archies, Mr. Magoo, The Lone Ranger, Gumby and Fat Albert and The Cosby Kids. Affiliate deal: Affiliates get five minutes per hour for advertising. Stations negotiate cable carriage, but the network will assist if necessary. Coverage of U.S. TV homes: N/A Contact: Neal Ardman, 800-294-4800, [email protected]

QUBO

Ownership: Ion Media Launch: 2007 Programming: Family-friendly programming aimed at children 5 to 8. Affiliate deal: N/A Coverage of U.S. TV homes: 64.3% Major affiliates: Only Ion stations carry the network; Ion is not looking for affiliates outside its station group. Contact: Marc Zand, 561-682–4242, [email protected]

RETRO TELEVISION NETWORK (RTV)

Ownership: Luken Communications Launch: 2005 Programming: A mix of classic TV shows and movies from the 1950s through the 1980s, including Starsky and Hutch, The Saint, Highway to Heaven and Police Story. It also provides three hours of educational children’s programming a week. Affiliate deal: Affiliates get five minutes per hour for advertising. Stations negotiate cable carriage, but the network will assist if necessary. Coverage of U.S. TV homes: 66% Major affiliates: Allbritton Communications, Cox Media Group, Scripps, Gannett Broadcasting, Media General. Contact: Neal Ardman, 800-294-4800, [email protected]

THECOOLTV

Ownership: Cool Music Network LLC. Principals include: David Hampe, Joe Comparato, Bobby Tarantino, John Pelaez Launch: July 2009 Programming: A 24/7 mix of live concerts and music videos that is customized to appeal to local viewers in each market. Three hours of educational children’s programming is provided every Saturday morning. Affiliate deal: Primarily the network manages all the sales and has a revenue-sharing arrangement with affiliates. There are a few affiliates that take four minutes per hour of ad time. Stations are responsible for cable carriage. Coverage of U.S. TV homes: 39% Major affiliates: Sinclair Broadcast Group, LIN Media, Belo Corp., Newport Television, Journal Broadcast Group, McGraw-Hill Broadcasting. Contact: David Hampe, 312-543-1770, [email protected]

THE COUNTRY NETWORK (TCN)

Ownership: A privately held company that would not reveal principals. Launch: October 2010 Programming: Country music videos and “related content.” It provides three hours a week of educational children’s programming. Affiliate deal: Ad revenue is split 50–50 and the network will handle sales for affiliates. Stations are responsible for cable carriage. Coverage of U.S. TV homes: 30% Major affiliates: Sinclair Broadcast Group, Gray Television, Young Broadcasting, Newport Television. Contact: Warren Hansen, 561-962-0077, [email protected]

THIS TV

Ownership: MGM and Weigel Broadcasting Launch: 2008 Programming: MGM movies and classic TV series including Mr. Ed, The Patty Duke Show, Bat Masterson and Sea Hunt. The network also provides three hours of educational children’s programming. Affiliate deal: 50–50 advertising split. Stations may preempt the network to run local news and sports. The network also permits affiliates to run the movies on their primary channel. Stations are responsible for cable carriage. Coverage of U.S. TV homes: 85.6% Major affiliates: Hearst Television, Tribune Broadcasting, Post-Newsweek Stations, Belo Corp., Raycom Media, Sinclair Broadcasting, Fisher Broadcasting Contact: Jackie Comeau, 520-229-9424, [email protected]

TUFF TV

Ownership: Joint venture between Luken Communications and TUFF TV Media Group LLC (owned by Tuff TV President Lou Seals). Launch: 2009 Programming: Sports, lifestyle, drama, reality, talk, specials and movies aimed at men 18–49. It also provides three hours of educational children’s programming a week. Affiliate deal: Affiliates get five minutes per hour for advertising. Stations negotiate cable carriage, but the network will assist if necessary. Coverage of U.S. TV homes: N/A Major affiliates: Morris Family Broadcasting, NJR TV Contact: Lou Seals, 404-230-9600, [email protected]

UNIVERSAL SPORTS

Ownership: NBC Sports and Intermedia Partners, a private equity investment fund. Launch: 2007 Programming: A mix of live events and original programming covering Olympics-style sports, including track and field, swimming, skiing, gymnastics, cycling and volleyball. It also provides three hours a week of educational children’s programming. Affiliate deal: N/A Coverage of U.S. TV homes: 34% Major affiliates: NBC Owned Television Stations, Gannett Broadcasting, Tribune Broadcasting, Belo Corp. Contact: Emily Love, 310-995-6934, [email protected]

UNTAMED SPORTS

Ownership: Olympusat, an independent programmer that distributes cable and satellite networks including FUNimation Channel; Sorpresa!, a Spanish-language children’s network; and Enlace TBN USA, a religious network. Launch: 2010 Programming: Outdoor lifestyle and such sports as fishing, hunting, boating, motor sports, scuba diving, volleyball and bullriding. It also provides three hours of educational children’s programming a week. Affiliate deal: N/A Coverage of U.S. TV homes: N/A Major affiliates: Sunbelt Communications, New Vision Group Contact: Kim Fraigione, 561-472-2872, [email protected]