MULTICASTING 2015

Wallach Wants Justice (Network) For All

Former NBCU syndication head Barry Wallach is now looking to clear in as many TV homes as he can the Justice Network, one of the newcomers to the volatile business of multicasting. In this Q&A, Wallach talks about the network's fast start and unique programming mix.This is Part One of a four-part special report on multicasting running this week. Tomorrow, in Part Two, TVNewsCheck looks at the proliferation of new targeted networks like Justice.

The upstart diginet Justice Network owned by Bounce TV co-founder Lonnie Cooper and led by former National Geographic Channels President Steve Schiffman is off to a solid start, securing coverage of 40% of TV homes in the five months since its launch. That’s due in large part to Gannett Broadcasting, which carries Justice in all its markets.

Gannett’s affiliation is due, in turn, to Barry Wallach, the executive in charge of distribution for the network. Wallach is well known to broadcasters. Previously, he was president of NBCUniversal Domestic Television Distribution. There, he oversaw first-run and off-network syndication sales and was involved with launching NBCU’s Cozi TV, a classic TV network now in 74% of TV homes.

The Justice Network comprises off-cable, unscripted crime and investigation shows like Alaska State Troopers along with PSA-style original content each hour with former America’s Most Wanted host John Walsh.

Wallach spoke with TVNewsCheck Contributing Editor Kevin Downey about the prospects for Justice Network in particular and multicasting in general.

An edited transcript:

Gannett launched Justice Network in January. What other station groups are you talking to?

BRAND CONNECTIONS

We are talking to all the station groups and we’re talking to individual stations. We have deals in the pipeline that we haven’t announced yet. There aren’t that many groups left. But we’re talking to all of them.

Do you require the stations airing Justice Network to have cable carriage?

We don’t require it, but almost all of our affiliates have cable carriage or telco carriage in their markets. I would say 95% or more of our affiliates either have or will have full cable carriage or telco carriage.

Diginets come and go. What makes the Justice Network special?

The most interesting aspect of Justice Network to stations and station groups is that we’re evolving the multicast space. Over the past decade, it has really been all about classic TV and classic movies. They’re doing great, so that is fantastic.

But we were thinking: “What is the next generation of diginet?” We spent a lot of time talking about the purpose of Justice Network.

First, you have to have a concept that people will watch. We knew going into this that people watch crime and investigation, mystery and whodunit-type TV. People are stunned when they see the research like Discovery’s Investigation Discovery, which is [a top-10] cable network among women 25-54, sign-on to sign-off.

It starts with a format people will watch. Then, we wondered if we would be attracting the people, demographically speaking, that advertisers are looking for, whether it’s direct response advertisers or local advertisers.

The other thing is that Justice Network, unlike any other diginet as far as I know, is tying right into their communities.

That’s the DNA of local stations. They’re local. They’re in the community. They provide information to their community. They work with local advertisers. They’re local businesses. That’s the bedrock of local TV.

We’re a national service, in terms of content. But we are hyper focused on how Justice Network can have a positive impact on each station’s local community. That’s our pitch. We are going to provide safety information for their viewers. We are going to find missing kids and fugitives.

What are the barter terms?
It’s eight national minutes and six local minutes.

So, how are stations responding?

A lot of people just think, “OK, good pitch. Now onto the next one.” They don’t know if we’re really going to do what we say we’re going to do. And they don’t know if it’ll work.

About 120 days into Justice Network, we know for a fact that it works.

So far, Justice Network was responsible for finding four missing children. Not only that, Justice Network is responsible for the capture of 10 fugitives who are now in the custody of authorities.

That’s meaningful. Stations see that we’re doing what we say we’re doing. And we’re delivering results.

Plus, they see that we are active and involved in their communities with an economically viable business. Our advertising is working. It’s not a nonprofit business. Stations are going to make money with us, while also serving their community.

What’s the biggest hurdle you have getting stations to carry Justice Network?

Their question is: “Do we have the spectrum?” And sometimes there is a timeline until they have it.

You mentioned that Justice Network is economically viable. Is that true at its current 40% coverage of TV households? Or do you need to get it up to 70%, 80% or 90% to be viable?

All the diginets start out somewhere around 25% to 40%. You need some critical mass because you have to have enough eyeballs to make the phone ring [for direct response advertisers].

We are a very viable business where we are right now. So, we have the time to be smart about making deals with the right partners. We’re not just looking for a clearance.

We need partners where the content will resonate with their viewers and that have the right promotion.

At some point, Justice Network will be at 80% or 90% coverage. That’s full coverage. There’s no doubt we will make it there. But the beauty of the diginet space is you don’t need to hit a threshold of 80% or 90% to sell advertising.

Justice Network is airing repeats of off-cable reality shows like Alaska State Troopers. Will you add off-broadcast, scripted dramas like Law & Order? Or are those shows too expensive?

This isn’t a cost issue for Justice. It’s about format.

Justice is 100% nonfiction programming for both our acquired series and our interstitial content with John Walsh. We would not rule out supplementing that with scripted content like CSI and Law & Order or even mystery movies on weekends.

But our plan is based on the results we have already seen. Viewers have an insatiable appetite for nonfiction crime, justice and mystery programming.

I should also point out that we plan to move into original nonfiction content in the near future.

What do you mean by near future?

A year or two down the road. We see that as our strategy, more than acquiring off-network repeats.

Justice Network, like most diginets, isn’t measured by Nielsen. So, what is your metric for success?

In syndication, you have to be at 90% coverage or you don’t have a business. For diginets, the direct response part of the business doesn’t need that. Your threshold is: Do advertisers’ phones ring? For our advertisers, their phones are ringing.

There’s not a specific [clearance] number that we consider successful.

Our advertising has increased every month that we’ve been on the air. Almost all of our advertisers have renewed. I’d say less than 5% haven’t renewed. Therefore, our advertising rates have increased each month. That is a huge success.

This is a good business. It’ll be a better business as we get more distribution. At that point, it’ll be incremental business because programming costs remain the same; promos are a fixed cost; the cost of distribution — the satellite, all that doesn’t change.

Three diginets — MeTV, Bounce TV and Cozi TV — have national Nielsen ratings. Will Justice Network get Nielsen ratings?

When you’re in 40%, 50% or 60% of the country, most networks are selling almost all direct response. But we also have sponsorships that aren’t Nielsen-rated. We have an original safety tip, a missing child segment and a fugitive segment that we’re selling sponsorships for.

A lot of national advertisers have associations for things like missing children that they usually pull from a different part of their budget. That’s more of a sponsorship sale.

Still, down the road, Nielsen is something we’ll consider. At some point, national advertisers will want to be associated with our content.

How are stations promoting Justice Network?

Some of our stations run our missing children interstitials [on their main channel]. They can monetize that. For us, that’s promotion.

The FCC’s spectrum auction is hanging over every discussion about the future of diginets. How will that play out for multicasting?

Nobody knows what’s going to happen. What we do know are two things:

Over-the-air television isn’t going away. In fact, it’s getting stronger with all the cord cutting that’s going on. On the technology side, the ATSC 3.0 [next-gen transmission standard], if that happens, will create more capacity in the spectrum that remains for over-the-air technology.

The spectrum that remains will probably become more efficient through compression or the next standard for television transmission. It won’t go away, although some people will lose their clearance. It won’t be the end of the business. There is plenty of spectrum out there.

And, as it turns out, multicasting is a good use for that space. This is a good business for the diginets and for the stations. I believe the stations are very happy to have found an additional revenue source.

What’s going to happen next in the diginet space?

You have some really good programming ideas out there. We think we have one of them. We have already seen a few other diginets fold or that have become marginalized. That’s because those weren’t good ideas. That happens.


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