Narrowing Focus Marks Newest Diginets

Next Monday, Memorial Day, Decades makes its formal multicasting debut, providing viewers in about half the country with classic TV, movies and documentaries loosely organized around decades, and a daily newsmagazine about the recent past hosted by Bill Kurtis.

The hour-long Through the Decades is “more ambitious than anything that any diginet has done thus far,” says Neal Sabin, vice chairman of Weigel Broadcasting, which is partnered with CBS in the venture. The show, like the network, draws programming from CBS’s vast libraries.

Appropriately, the first airing of the show will focus on events tied to the holiday, says Sabin. “That’s not just wars. There’s a great clip of Walter Cronkite interviewing George Lucas because Star Wars premiered in 1977 on Memorial Day weekend.

“It changed summer blockbuster marketing and movie merchandise marketing.”

Decades is part of the new wave of diginets with significant distribution, tightly focused brands and programming and, in some cases like Decades, a smattering of distinguishing original programming.

Others riding the wave: Grit, Escape, Laff, Buzzr, Heroes & Icons and the Justice Network. Despite their greenness, they all managed to crack TVNewsCheck‘s Top 25 Digital Ranking based on coverage (see the full list here).

Together, the newcomers attest to the growing acceptance of multicasting among viewers and advertisers.

In an analysis of Nielsen data, TVB found that several diginets are drawing bigger audiences than basic cable networks, particularly in small markets. For instance, in Dayton, Ohio, Weigel’s MeTV, on a subchannel of Cox Media’s WHIO, delivered a 1.0 rating in adults 25-54 in February, beating out top cable nets like History (0.9), ESPN (0.7) and TNT (0.5).

Katz Broadcasting is at the forefront of the multicasting surge. Its male-focused Grit, which debuted last August, is already the third most widely distributed diginet on stations in 80% of TV households. The network airs reruns of shows like The Rookies and movies like Arnold Schwarzenegger’s Last Action Hero.

Katz also recently launched female-focused Escape, which is distributed in 60% of TV homes. And its one-month-old comedy network Laff is already cleared on stations that reach 55% of television households.

“So far, Grit has led the way with Escape and Laff not far behind,” says Jonathan Katz, president-CEO of Katz and COO of Bounce TV, a popular African-American network. “Stations are embracing all three networks. They’re all carried by major station groups and stations.”

This past January, the crime and investigation network Justice Network debuted. It’s now in 40% of TV homes.

In addition to rebroadcasting unscripted, off-cable shows, Justice airs 90 seconds of original PSA-style content each hour with former America’s Most Wanted host John Walsh.

“When you have a multitude of choices on cable TV, broadcast and digital, you have to treat a network like a packaged good that’s competing with a multitude of brands on the shelves,” says Steve Schiffman, CEO at Justice Network. “You have to have a very clearly defined brand.”

Justice Network is owned by Bounce TV co-founder Lonnie Cooper and is programmed by former Discovery Networks executive John Ford. NBCUniversal Domestic Television Distribution’s former syndication chief Barry Wallach is handling distribution. Wallach was the subject of a Q&A with TVNewsCheck posted yesterday (read it here).

FremantleMedia North America has scheduled its game show network Buzzr for launch this summer.

“We’re launching in 25 million homes (23% of TV households) with Fox TV Stations and they have must-carry deals on cable TV,” says Thom Beers, FremantleMedia North America’s outgoing CEO.

Other upstarts include Sony Pictures Television’s classic movie network getTV (70%), Weigel’s Heroes & Icons (24%) and MGM’s general entertainment network The Works, which each weekday airs a three-hour block of Huffington Post Live. The Works is in 37% of TV homes.

Most are extending their reach by offering stations an ad-share model. But some like Sony’s getTV pay stations a fee to carry their network, as do the Katz networks Grit, Escape and LAFF. Others like Weigel’s Heroes & Icons offer stations multiple options. A spokesperson for Sony says getTV now offers stations an ad-share model in addition to a fee-based model.

For stations, diginets are a low-cost or no-cost new revenue source that help them provide programming to their communities.

“The diginets are an important piece of our business,” says Pat LaPlatney, SVP at Raycom Media. “I’m not going to say it’s an enormous piece of revenue. But it is in the millions of dollars.”

And, they also help stations better serve their markets, he adds: “Bounce TV serves the African-American audience, which helps us to serve an audience we feel is under-served.”

The diginet world is fueled by direct response advertising. For most, it is the sole source of revenue. (In Part Three of our four-part special report on multicasting, TVNewsCheck will examine the state of the DR market. It appears tomorrow.)

But some, notably MeTV, Bounce and NBCU’s Cozi, are now getting Nielsen ratings and selling general-market advertising.

“This is a positive for our clients and for us,” says Sam Armando, SVP of media buying agency Starcom MediaVest Group’s SMGx division.

“If a network is a good fit for our client, it doesn’t matter if it’s a diginet or any other platform. If it’s a fit, it doesn’t matter if it’s small or big. And the audience demographics match what we see across [broadcast] TV.”

He adds that advertisers like the classic TV formats like that on Tribune Media’s Antenna TV. “The content is safe,” he says. “There isn’t much to worry about.”

The Nielsen numbers also help networks to tweak their programming in search of bigger audiences.

“We are looking at the data for audience flow purposes,” says Meredith McGinn, SVP of Cozi. “We haven’t made any scheduling changes yet, but for future acquisitions we are definitely going to use the data.”

Both MeTV and Bounce TV are active in this year’s $20 billion national TV upfront ad market, which is getting underway.

“Right now, just about every major ad agency buys Bounce TV,” says Katz. “We are in the middle of delivering around 200 upfront presentations. We expect to show major growth year over year, which is on top of a very healthy scatter market.”

The news from the multicasting front is not all good. Over the past months, many have quietly disappeared.

Soul of the South and Zuus Media’s music network Zuus Latino have shuttered. With the loss of affiliates other than the ABC O&Os, Disney-ABC’s Live Well Network is down to just 23% of homes.

And The Cool TV, a Top 25 diginet last year, is now available only on a few cable systems and online.

Michael Kokernak, president of Across Platforms, a Boston-based consultant who follows the multicast world, says success depends of the same principles that have guided broadcasting over the decades.

“Diginets need to be more focused on wisely investing their programming budgets on finding hits that will resonate with both viewers and advertisers.”

This is Part Two of a four-part special report on multicasting. Read all the sections here.