SRK85
06-04-2004, 21:00
I saw this in my paper today I hope that Comcast buys it.
Martial Arts Network (http://www.philly.com/mld/philly/business/8832923.htm?1c)
Why few niche channels ever make it to cable TV
Slots are limited. And "al-la-carte" won't help.
By Akweli Parker
Inquirer Staff Writer
New Jersey businessman R. Anthony Cort has needed the cunning of a crouching tiger and the discipline of a Shaolin monk in trying to realize his eight-year-old dream: a cable channel devoted to the martial arts.
After several years spent researching and lining up programming - shows about self-defense, yoga, Tae Bo-style fitness and, yes, reruns of Walker, Texas Ranger - Cort now is deep into an effort to convince the likes of Comcast Corp. that the Martial Arts Channel deserves a home on their cable systems.
It is a risky proposition. Dozens of niche programmers with similar aspirations petition Comcast, Time Warner Cable, Cox Communications Inc. and DirecTV each year to get on their channel lineups, yet it is getting harder and harder for proposed channels to ever see the light of a remote control.
And many of those who are offering new channels say the growing support for "a-la-carte" programming, which would let consumers pay only for the channels they want to watch, could make it even more difficult for their networks to achieve any significant distribution.
Still, Cort is out there pitching his dream, which he says has a proven audience. "When Crouching Tiger, Hidden Dragon came out and broke box-office records, almost 20 percent of the U.S. population saw the movie," he said, referring to the international hit from 2000.
Cort's journey of a thousand footsteps began in 1996, when he noticed that his fascination with the fighting arts was becoming more of a mainstream phenomenon. "It was almost like an epiphany that we were seeing it everywhere," Cort said. But "it was a highly fragmented, disjointed arena."
Occupied at the time in his job as a district manager for Coca-Cola Co. and other business ventures, he put the idea on the shelf for a few years before beginning to develop it in earnest in 2000 - pouring hundreds of thousands of dollars of his own money into the venture. His company now is lining up investors for a $15 million round of financing later this summer, he said.
At last month's cable-industry trade show in New Orleans, the Martial Arts Channel's booth stood out, which was no mean feat with such folks as American Idol loser William Hung and dirty dancer Patrick Swayze mugging for other networks.
Tae Bo creator Billy Blanks was on hand for Cort's network, talking about his show Fit 4 Life, while a bevy of back-flipping youths gave live demonstrations.
Among other things, Cort noted, the channel could become a recruiting tool for the 28,000 schools teaching karate, judo, tae kwon do and even yoga.
"Martial-arts schools need to advertise, and we have the ability to bring a whole new level of advertiser to the cable industry," Cort said.
In part as a result of buzz generated at the show, Cort said, his company, Breakthrough Communications L.L.C., based in Columbus, N.J., will be talking in the next several weeks with eight of the 10 largest cable companies and both of the satellite-TV services.
What are the chances that his channel - or any new channel, for that matter - will make it?
Not good, judging by the numbers.
Nationwide, the number of new networks peaked with 19 in 1998, according to Kagan World Media. In 2002, the most recent year for which figures were available, eight networks debuted.
Although cable and satellite operators routinely promote that they offer hundreds of channels, they jealously guard those channel slots, known collectively as bandwidth.
Matt Bond, executive vice president of programming for Comcast, calls it "our most precious resource."
"We get several dozen pitches every year for new networks," Bond said - only a few of which get added.
Including its 45 digital music channels, Comcast has close to 300 channel spaces, many of which are devoted to pay-per-view channels and multiple offerings from premium channels such as HBO and Showtime. Bona fide networks, not including the premiums, number about 130; in all, the National Cable and Telecommunications Association says there are 339 national and 84 regional cable networks in operation.
Gatekeepers such as Bond are looking for several things before they grant a coveted berth in the lineup.
"First, of course, is the concept - does it hit a market segment that is unserved or underserved? Then, you look at the people running it. Running a television network is not an exercise for the faint of heart," Bond said.
And also important, he said, can it be done relatively cheaply? Cable operators typically pay a given channel several cents each month for each cable subscriber, so adding channels means customers' rates will go up.
Which means any proposed channel's prospects "aren't that good," said Rich Hanley, director of graduate programs for Quinnipiac University's school of communications in Hamden, Conn. "Customers are pretty much at the limit of what they can spend for cable services. I don't think the consumer can continually absorb increases for marginal programming, microprogramming or nanoprogramming."
These days, practically all additions are made on the digital-cable tier, which can squeeze more channels into that bandwidth than could the older analog style of transmission. For now, that severely limits the potential audience for a new channel, because only about 30 percent of cable subscribers get the digital tier.
Another problem looming for prospective channels is the widening discussion of a-la-carte cable pricing, which would let cable customers pay for channels that they choose for themselves, rather than bundles of channels chosen by their cable companies.
The companies say bundling of channels is necessary if niche channels are to survive - "By packaging channels together, all boats rise," Bond said - but consumer advocates say it unfairly forces cable viewers to pay for channels they never watch. Some lawmakers have begun discussing legislation to encourage a-la-carte pricing.
"We probably wouldn't survive if there was an a-la-carte subscription model," said Debra Kodish, a native Philadelphian, who is trying to launch the Destiny Channel, a network for young intellectuals that is scheduled to debut early next year on some college campuses.
Meantime, the competition for the few yearly openings on the big cable companies' systems is intense: New channels must compete for attention against high-profile start-ups such as Al Gore's proposed network for smart young people, as well as spin-offs of popular channels such as Discovery and MTV.
"We have to prove our worth to the distributors," said Nick Rhodes, who helped start the Outdoor Life Network and Speedvision - both of which won Comcast's backing - and who now is pitching the Casino & Gaming Television channel. "In order for us to get that carriage agreement done, we have to show them we belong."
Martial Arts Network (http://www.philly.com/mld/philly/business/8832923.htm?1c)
Why few niche channels ever make it to cable TV
Slots are limited. And "al-la-carte" won't help.
By Akweli Parker
Inquirer Staff Writer
New Jersey businessman R. Anthony Cort has needed the cunning of a crouching tiger and the discipline of a Shaolin monk in trying to realize his eight-year-old dream: a cable channel devoted to the martial arts.
After several years spent researching and lining up programming - shows about self-defense, yoga, Tae Bo-style fitness and, yes, reruns of Walker, Texas Ranger - Cort now is deep into an effort to convince the likes of Comcast Corp. that the Martial Arts Channel deserves a home on their cable systems.
It is a risky proposition. Dozens of niche programmers with similar aspirations petition Comcast, Time Warner Cable, Cox Communications Inc. and DirecTV each year to get on their channel lineups, yet it is getting harder and harder for proposed channels to ever see the light of a remote control.
And many of those who are offering new channels say the growing support for "a-la-carte" programming, which would let consumers pay only for the channels they want to watch, could make it even more difficult for their networks to achieve any significant distribution.
Still, Cort is out there pitching his dream, which he says has a proven audience. "When Crouching Tiger, Hidden Dragon came out and broke box-office records, almost 20 percent of the U.S. population saw the movie," he said, referring to the international hit from 2000.
Cort's journey of a thousand footsteps began in 1996, when he noticed that his fascination with the fighting arts was becoming more of a mainstream phenomenon. "It was almost like an epiphany that we were seeing it everywhere," Cort said. But "it was a highly fragmented, disjointed arena."
Occupied at the time in his job as a district manager for Coca-Cola Co. and other business ventures, he put the idea on the shelf for a few years before beginning to develop it in earnest in 2000 - pouring hundreds of thousands of dollars of his own money into the venture. His company now is lining up investors for a $15 million round of financing later this summer, he said.
At last month's cable-industry trade show in New Orleans, the Martial Arts Channel's booth stood out, which was no mean feat with such folks as American Idol loser William Hung and dirty dancer Patrick Swayze mugging for other networks.
Tae Bo creator Billy Blanks was on hand for Cort's network, talking about his show Fit 4 Life, while a bevy of back-flipping youths gave live demonstrations.
Among other things, Cort noted, the channel could become a recruiting tool for the 28,000 schools teaching karate, judo, tae kwon do and even yoga.
"Martial-arts schools need to advertise, and we have the ability to bring a whole new level of advertiser to the cable industry," Cort said.
In part as a result of buzz generated at the show, Cort said, his company, Breakthrough Communications L.L.C., based in Columbus, N.J., will be talking in the next several weeks with eight of the 10 largest cable companies and both of the satellite-TV services.
What are the chances that his channel - or any new channel, for that matter - will make it?
Not good, judging by the numbers.
Nationwide, the number of new networks peaked with 19 in 1998, according to Kagan World Media. In 2002, the most recent year for which figures were available, eight networks debuted.
Although cable and satellite operators routinely promote that they offer hundreds of channels, they jealously guard those channel slots, known collectively as bandwidth.
Matt Bond, executive vice president of programming for Comcast, calls it "our most precious resource."
"We get several dozen pitches every year for new networks," Bond said - only a few of which get added.
Including its 45 digital music channels, Comcast has close to 300 channel spaces, many of which are devoted to pay-per-view channels and multiple offerings from premium channels such as HBO and Showtime. Bona fide networks, not including the premiums, number about 130; in all, the National Cable and Telecommunications Association says there are 339 national and 84 regional cable networks in operation.
Gatekeepers such as Bond are looking for several things before they grant a coveted berth in the lineup.
"First, of course, is the concept - does it hit a market segment that is unserved or underserved? Then, you look at the people running it. Running a television network is not an exercise for the faint of heart," Bond said.
And also important, he said, can it be done relatively cheaply? Cable operators typically pay a given channel several cents each month for each cable subscriber, so adding channels means customers' rates will go up.
Which means any proposed channel's prospects "aren't that good," said Rich Hanley, director of graduate programs for Quinnipiac University's school of communications in Hamden, Conn. "Customers are pretty much at the limit of what they can spend for cable services. I don't think the consumer can continually absorb increases for marginal programming, microprogramming or nanoprogramming."
These days, practically all additions are made on the digital-cable tier, which can squeeze more channels into that bandwidth than could the older analog style of transmission. For now, that severely limits the potential audience for a new channel, because only about 30 percent of cable subscribers get the digital tier.
Another problem looming for prospective channels is the widening discussion of a-la-carte cable pricing, which would let cable customers pay for channels that they choose for themselves, rather than bundles of channels chosen by their cable companies.
The companies say bundling of channels is necessary if niche channels are to survive - "By packaging channels together, all boats rise," Bond said - but consumer advocates say it unfairly forces cable viewers to pay for channels they never watch. Some lawmakers have begun discussing legislation to encourage a-la-carte pricing.
"We probably wouldn't survive if there was an a-la-carte subscription model," said Debra Kodish, a native Philadelphian, who is trying to launch the Destiny Channel, a network for young intellectuals that is scheduled to debut early next year on some college campuses.
Meantime, the competition for the few yearly openings on the big cable companies' systems is intense: New channels must compete for attention against high-profile start-ups such as Al Gore's proposed network for smart young people, as well as spin-offs of popular channels such as Discovery and MTV.
"We have to prove our worth to the distributors," said Nick Rhodes, who helped start the Outdoor Life Network and Speedvision - both of which won Comcast's backing - and who now is pitching the Casino & Gaming Television channel. "In order for us to get that carriage agreement done, we have to show them we belong."