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At NATPE last week, Retro Television Network, LATV, World Championship Sports Network, .2Network and Mexicanal sought broadcasters willing to carry them on their digital channels.
By Harry A. Jessell
It wasn’t just program syndicators that were chasing broadcasters at NATPE last week.
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Also in the hunt were at least five independent digital broadcast networks—Retro Television Network, LATV, World Championship Sports Network, .2Network and Mexicanal.
All were trying to sign up TV stations as digital affiliates—that is, trying to persuade them to carry their networks on one of their digital subchannels.
“What we discovered at NATPE is that people are underestimating the opportunities available to them through multicasting,” says Howard Bolter, president of LATV, an up-and-running bi-lingual Hispanic network laden with music videos.
“Right now it’s a new frontier, but by February next year, it’ll be everybody’s reality,” Bolter says.
Principally owned by Entravision CEO Walter Ulloa, LATV is announcing this morning the addition of another key affiliate, KTVU San Francisco. The Cox station gives LATV outlets in six of the top 10, and 16 of the top 25, Hispanic markets.
“We were basically overwhelmed at NATPE,” says Richard Schilg, president of the .2Network, a general entertainment HD diginet built around movies that expects to launch on July 1.
Schilg says he and other .2 (pronounced dot-two) executives met with more than 30 broadcasters by appointment and another 50 or 60 who just stopped by.
Schilg says he expects to announce the network's first affiliation agreements within the next week or two.
And, in the meantime, the company will be following up on the NATPE leads, he says. “We have a number of proposals to make to the largest groups in the industry.”
.2 is a unit of the Guardian Enterprise Group of Columbus, Ohio, which also owns a small TV production company and an independent TV station serving Columbus, WSFJ.
The network’s movies, mostly from the past 10 years or so, anchor a schedule that also includes original comedy and lifestyle programming, some produced by Guardian.
Each of the five independent diginets offers affiliates a different mix of programming with different spins.
RTN, owned by Little Rock, Ark.-based Equity Media Holdings, is built around popular vintage TV shows like Mission Impossible, Hawaii Five-O, Happy Days and I Love Lucy. RTN is willing to customize its feed for each affiliate by integrating local programming at its Little Rock hub.
The network has been adding affiliates on a regular basis for the past several months. According to RTN’s Mark Dvornik, it now counts 65 outlets (not all announced) covering more than 30 percent of the country.
As a result of distribution deals with key international and national governing bodies, World Championship Sports Network offers more than 2,000 hours a years of live Olympic and lifestyle sporting events ranging from skiing to karate.
Acccording to WCSN’s Bo LaMotte, the network now has 12 affiliates, including eight Granite Broadcasting stations, Sunbelt Communications’s Idaho stations in Idaho Falls and Twin Falls, Tribune’s WPHL Philadelphia and Gray’s KOLO Reno, Nev.
WSCN was founded by Claude Ruibal and Tom Hipkins, who now serve as CEO and general counsel, respectively. It’s backed by InterMedia Partners, the investment vehicle for former cable exec Leo Hindrey.
Like .2, Mexicanal has yet to announce any affiliate agreements, but insists that it soon will.
Mexicanal is a Spanish-language network of news and general entertainment jointly owned by Castalia Communications Corp., an established program distributor, and Cablecom, a cable operator in Mexico.
But here’s the Mexicanal twist. Unlike other Spanish-language networks such as Univision and Telemundo, Mexicanal says it specifically targets Mexican-Americans, who just happen to account for three-quarters of the 44 million U.S.Hispanics.
“It's programming produced by Mexicans, for Mexicans,” says Mexicanal’s Chuck Wing.
For all their differences, the five networks have some things in common.
The diginets offer affiliates 24/7 programming and split the available advertising inventory.
At RTN and Mexicanal, the network and affiliates evenly split 12 minutes of commercial time each hour. At LATV, they divvy up 10.
.2 wants to keep 10 of the 14 commercial minutes it schedules each hour, but it also offers a large share of its national paid programming revenue. The share depends on the market size and how long the affiliate has been with the network.
Because of that paid programming share, Schilg says, broadcasters can make money without having to bother with local sales and ad insertions. It’s the “recommended approach” for affiliates just starting out, he says.
WCSN offers broadcasters five of the 14 minutes each hour, plus two of the six overnight hours set aside for paid programming.
To sweeten the deal, WCSN also allows affiliates to simulcast big events on their main channels.
None of the networks are new, although their interest in broadcasters’ digital channels may be.
LATV has been incubating at KJLA Los Angeles since 2001.
WCSN debuted two years ago as an online service.
Equity developed and tested RTN on its own stations before offering it to other broadcasters in 2006.
Mexicanal has been available via DirecTV for two-and-a-half years.
Likewise, a version of .2 has been on Sky Angel, a religiously oriented satellite TV service.
Of the five, only .2 is being offered in HD.
HD is what broadcasters are demanding, says .2’s Schilg. They see it as a big help in negotiating for cable carriage, he says.
Even if affiliates decide not to broadcast the network in HD because of bandwidth constraints, he says, they want to be able to deliver HD to cable headends.
Although the diginets are pursuing many of the same broadcasters, they don’t see themselves as mutually exclusive.
They point out that there are multiple stations in every market and that every station can squeeze multiple diginets into their digital spectrum.
There is room for any channel that is well thought out from the broadcasters' perspective and is designed to fill the needs of broadcasters, says RTN’s Dvornik. “We can all co-exist.”
TV station reps like the current crop of diginets and believe they will achieve sufficient distribution to give themselves a chance.
“They are going to use the income from the paid programming as the means of making themselves viable initially,” says Katz Television’s Bill Carroll. “Looking ahead, we will see if they yield audience,” he says. “If they do—and some may—then they will have some commercial viability as well.”
Carroll thinks the networks may work, even if they never rise much above a 1.0 rating.
“Look at the niche cable networks and the ratings they achieve,” he says. “There is no reason to believe that a digital channel would not be able to exist in that kind of universe.”
The diginets fill a need, says Petry Television’s Garnet Losak, who expects other independent diginets to emerge.
“The main issue for broadcasters is they don’t have the wherewithal, the trafficking systems, the personnel, the resources to program and maintain what amounts to several TV stations,” she says.
“What these networks do is provide palatable, maybe even desirable, programming that the stations can manage without overreaching their resources,” she says.
Not all broadcasters are rushing to the digital ranks.
Digital networks flood markets with avails, says Perry Sook, CEO of Nexstar Broadcasting. “I’m not sure that is the highest and best use of the spectrum.”
Niche services “may find a better home online than they do on the air,” he says.
Sook, who has worked hard to win retransmission consent fees from cable operators, also says he isn’t sure it makes sense to use retrans leverage to get carriage for diginets.
Sook says he could be enticed to launch a Spanish-language diginet in Nexstar markets with large Hispanic populations, but that in general he is more interested in in-band mobile broadcasting.
“I think that is going to be the better use of the spectrum.”