Special Report: TV Specialty Services: New nets get qualified thumbs up
Also in this report:
Environmental studies: There hasn't exactly been a sea change, but media buyers are beginning to allot dollars to the new specialty nets: page 26
A word from the sponsors: There is evidence the new nets are making their own inroads into the promotion arena: page 29
The specialty services that signed on the air this January have had nine months - appropriately enough - to work out the programming kinks, accumulate hard data about who's watching what and when, and convince media buyers and advertisers to send money their way.
So, based on the evidence, are these tv tykes now steady on their feet?
The answer is a qualified "yes," a somewhat surprising answer considering the obstacles the specialty services have had to overcome.
The largest of these was the Rogers Cablesystems debacle over negative option marketing, announced in January and denounced that same month.
Cable subscribers were angry that they were being forced to pay for services unless they specified they did not want them.
Rogers, of course, is not the only cable operation that at least thought about negative option marketing of the new specialties, but as the biggest in the industry, it naturally served as a lightning rod for an unhappy public.
Rogers no longer has any negative option plans, dropping them officially just recently, as well as freezing rates for 18 months and promising other services to bring subscribers back onside.
Peter O'Neill, director of sales at Showcase Television, says the negative marketing clash was the biggest single hurdle the service had to clear in its first nine months, even forcing the all-fiction channel to look again at its business plan.
(Showcase announced Sept. 13, after Strategy's interview with O'Neill, that it had filed for mediation under the Canadian Cable Television Association's Access Commitment.
(Showcase says it was unable to reach a distribution agreement with Rogers after 10 months of negotiations.
(Showcase has already signed carriage and compensation deals with Shaw Cable, Videotron and other cable operators.)
But O'Neill says beyond the Rogers affair, Showcase's start-up went fairly smoothly because of its format.
He says the service did not have to create its own programming from scratch inside six months.
Instead, it shopped in foreign tv markets - Britain, Australia, France, South Africa, Italy and elsewhere - for well-received series such as the Australian police mini-series Phoenix and Britain's cop show Spender.
David Kirkwood, vice-president of sales and marketing for Bravo!, says all the specialties were affected by Rogers' initial decision on negative option marketing.
Brian Bolli, sales manager at New Country Network, agrees with Kirkwood.
Bolli says although the Rogers imbroglio was not the most difficult matter ncn faced in its first nine months, it was another "major hurdle" the channel had to overcome.
Todd Goldsbie, director of sales and marketing at Life Network, also describes a Rogers-related matter, the bundling of the established specialties such as tsn with the newcomers, as a difficult turn of events, although not insuperable.
At Winnipeg-based wtn, the channel once sub-titled the Women's Television Network, Marketing Vice-President Jacqueline Cook says the main concern was the public's assumption about what wtn was and what it was not.
Cook says wtn has never been a channel driven by ideology, despite public perceptions this was the case.
"Its genesis was commercial," says Cook, who admits wtn had a team in place to field "nasty" phone calls when the network signed on.
However, she says such crisis management was not necessary; about 90% of callers to wtn "actually gush" about the programming.
At ncn, a sizeable problem was also perceptual: Bolli says the hardest thing was getting viewers and advertisers to understand the channel did not play "hick" music, but broadcasts much more contemporary fare.
Bolli says ncn audiences have an average age, men and women, of 37, and 80% of all audiences are aged 50 or less.
He says a further challenge was ncn's all-video format.
The channel had to get across to media buyers that ncn was "one big program" rather than a series of discrete half-hours.
At Life, Goldsbie says, apart from the Rogers issue, things were different rather than difficult.
He says the newness of the whole concept meant staff "spent more time putting out fires than keeping to the knitting" in the first nine months.
Meg Pinto, vice-president of marketing at the Discovery Channel, says what she faced after signing on was an anticipated fight to win advertising dollars, the newness and fragmentation the specialties represented, and the necessity of educating advertisers to the benefits of associating themselves with Discovery.
Further, Pinto says, making clear she is not bragging, Discovery looked so good and its numbers were so good to start with, the pressure was on immediately.
"Discovery was too successful too soon, if there's such a thing," she says.
As for winning over media buyers and advertisers, all the specialties claim varying degrees of success.
O'Neill suggests Showcase marketed itself more strongly than the other channels and this approach has paid off.
He says Showcase has become known for bringing to Canadian viewers top international programs with a view to delivering affluent, educated audiences.
He says revenues have been "great."
According to O'Neill, "some categories love us," and he cites the entertainment industry, the financial sector, computers, the automotive industry, packaged goods and children's products.
Pinto says Discovery is not selling just a broadcast signal but an entire environment, as well as trying to show advertisers the added value Discovery offers.
She says an Internet cross-promotion with Flare magazine is one such example, as are a series of one- and two-minute features created for Bell Canada.
Further, she says, General Motors Co. of Canada has made a substantial commitment to Discovery this year, and new advertisers include British Airways, 3M Canada, Toyota Canada and Tim Horton's.
Pinto says Discovery's average minute audience among adults 25 to 54 is 34,000, and the channel is delivering or overdelivering audiences in all dayparts.
Kirkwood says Bravo!'s strategy has been to stay with upmarket advertisers; a successful undertaking bringing Bravo! the revenues it projected and the anticipation of performing "several times better" than it did last year.
He says if there has been a shift of emphasis, it has been among the advertisers.
Overall, Kirkwood says they seem to prefer shorter-term rather than longer-term deals; a 10-week buy, rather than a 50-week commitment.
Goldsbie says Life Network ran more than 10% ahead of company projections from January to this August, and is delivering targeted audiences for "specific product categories."
As well, he says Life has current deals with 13 sponsors.
According to Goldsbie, some shows are putting up appreciable numbers.
He says hostess with the mostess Martha Stewart's program draws an aggregate weekly audience of more than 300,000.
Goldsbie, like all his colleagues at the other specialties, is cagey about actual audiences, and numbers about revenue are scarce. Profits, of course, will arrive one day.
However, some information is available: average minute audiences from 6 a.m. to 12 a.m. from January to August, although this is only one measurement among many and thus not definitive.
Some specialties, Showcase is one, prefer to use primetime numbers.
All data are measured by Nielsen's electronic people meters.
For all adults 18+, average minute audiences were 34,000 for Discovery, 21,000 for ncn, 18,000 for Showcase, 14,000 for Life Network, 13,000 for Bravo! and 11,000 for wtn.
In contrast, specialty heavyweight tsn's audience was 101,000, and CBC Newsworld drew 41,000.
As for the future - beyond programming and revenue - the specialty channels will continue to brand themselves, it seems clear.
As they strengthen their identities, the idea that drives them - specialized tv for specialized audiences - will likely gain further acceptance among audiences and advertisers.
Or, as O'Neill recalls what was being said in March:
"People were saying, 'Ah-ha, now I know what Showcase is all about.' "