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Come January, 2004, Philadelphia-based Comcast and Lanham (Md.)-based Radio One plan to launch TV One, a cable network focused almost exclusively on entertaining African Americans between 24 to 54. This is an older audience than the demographic targeted by Black Entertainment Television (BET). But Johnathan Rodgers, who heads the TV One effort, insists the strategy will pay off soon enough.
Comcast (CMCSA ) and Radio One (ROIA ) have pledged to put $130 million behind TV One, along with Bear Stearns' Constellation Ventures and other capital investors. Comcast is the nation's largest cable provider, serving more than 21 million subscribers and operating in 21 of the 25 top markets, where half of America's black audience resides.
Radio One is the nation's largest urban radio network through its 66 stations nationwide. The new cable network will feature a mix of dramas, sitcoms, game shows, movies, news, and documentaries relating to African-American experiences and cultural tastes. As Rodgers puts it, "The mission of TV One is to be for African-American adults what Lifetime is for women."
SELLING THE CONCEPT. The 57-year-old Rodgers has plenty of experience for the task at hand. He has spent 20 years in a variety of executive positions at CBS and six years as president of Discovery Networks. Under his leadership, the Discovery Channel network grew from two channels with a value of $1 billion to a 14-channel, $20 billion division. He left in March, 2002, to work for Radio One CEO Alfred Liggins, his longtime friend and mentor. While Liggins put together the concept for TV One, Rodgers joined the endeavor in March, 2003. Rodgers, 57, also serves on the board of directors for Procter & Gamble (PG ).
Making TV One a success won't be easy. Creating a cable network requires attracting investors, building a system of distributors, and developing programming -- all at the same time. Rodgers' goal is to simultaneously launch TV One in as many major cities as possible and sell the network to Comcast's competitors -- Cox (COX ) and Time Warner Cable (AOL ). He also understands that cable operators are quick to shun a network that can't attract an audience, and he's aware that good programming is expensive.
So how will Rodgers crack this nut? I recently asked him to explain the intricacies of the African-American viewing market and how he'll measure success. Edited excerpts from the conversation follow:
Q: Why build out another African-American cable network? A: Creating and building TV One provides a channel that African-American adults know that they can go to 24/7. This opportunity does not exist today. African Americans love television. We spend about $3 billion a year on cable bills. In fact, the largest portion of the average African American's entertainment dollar goes toward their cable bill. This indicates how important TV is to the typical African American.
If you look at HBO, blacks comprise 13% of the general U.S. population, yet comprise 20% of the HBO network's subscribers. African Americans appreciate high-quality television. Yet, in the 50 years since television became a commercial force in this country, African-American adults have never had a destination point or a TV channel they can call their own.
Q: What about Black Entertainment Television? A: It's not a "BET or us" situation. BET is primarily oriented toward younger viewers. The average age of a BET viewer is 21. TV One is not intended to be a competitor to BET. Our desired demographic is much older than the BET viewer.
Another way to look at it is to imagine that only one television network existed to reflect the culture, aspirations, history, politics, and entertainment preferences of the white audience and that this one network was MTV. While BET is a good network, it's not for all African-American people.
There's plenty on television for African Americans to watch. In general they watch about 20 hours more per week than non-African Americans. On average, African-American women watch even more, about 25 hours per week.
Weekly ratings show us that African Americans also watch TV differently than the general population. The top 20 African-American TV shows are different than the top 20 shows for the general population. Rarely do they have programs in common. There definitely are television shows for African Americans but no overall destination or home for African-American viewers.
Q: How will you generate profits? A: This network will be profitable because there's huge consumer demand. Last year, African Americans spent $631 billion on consumer goods, making them the 11th-largest consumer group in the world.
Our approach is to use a traditional business model, with low cost and high revenue. We'll produce attractive programming economically and deliver to advertisers programming that they want -- efficiently. We will have two revenue sources: advertising and subscriber revenue from cable-TV and satellite operators.
For the short term, our goal is to live up to the expectations of millions of African Americans out there who have been demanding a service like this. They're expecting our programming to be excellent from day one. Our projection is that we'll break even between the fourth and fifth year of operations, and we anticipate being profitable by our fifth year.
In addition, our long-term objective is to see how the channel can grow as part of the Radio One enterprise and help to grow Radio One Corp.
Copyright 2003, by The McGraw-Hill Companies Inc. All rights reserved.
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