Posted by: Olga Kharif on January 31, 2006
Yesterday, I talked with Les Garland, co-founder of popular music channels MTV and VH1. Last year, he launched a new venture, called The Tube Music Network, a music channel only accessible to people with digital TV tuners (currently, less than 1% of Americans have those, but their numbers are growing rapidly). These are people with TV sets with digital tuners, or users who subscribe to digital tier on cable or to DirecTV.
The Tube could be the forerunner of a major revolution happening in television. The channel is taking advantage of TV’s transition from analog to digital format. As this transition happens, every TV broadcaster will be able to transmit more than one channel. In other words, each broadcasting station will be able to transmit new channels. And Garland’s is the first of a growing crop of such new channels that could do to traditional TV what FM did to AM radio.
Today, digital TV is practically the only way of getting a new channel out. Garland says that cable companies already have around 40 new channels on stand-by, waiting to be added into the line-up. Ditto for satellite companies. The only door that's still open to new channel creators is this still tiny digital TV space. And, already, new entrants are streaming in. Since the Tube launched six months ago, NBC began transmitting a digital weather channel. And CBS recently announced a new channel plan.
As more new channels pop up, Garland says we could see something akin to the birth of FM radio. First, there was just AM radio. Then, FM radio sprang up and took most of AM's listeners away.
This might not be too far-fetched, judging by The Tube's success. In the next two to three weeks, The Tube, currently reaching 7 million people in smaller markets, will announce an agreement with a major broadcaster and enter major U.S. markets. In 90 days, it could potentially be reaching 20 million people, says Garland. The channel, funded by Garland's friends and family, could turn profitable in 18 months, he says.
Apparently, the company is already in talks with advertisers like GM and Motorola. And its nifty business model could appeal to record companies and concert tour organizers.
The plan: The channel, which only runs music videos (everyone from Elvis to The Eagles) and caters to the 35+ crowd (in particular Baby Boomers), only plays commercials for six minutes an hour. It will get most of its revenue from selling DVDs, CDs, T-shirts and concert tickets related to the music and the artists shown on the channel, through its Web site.
That's clearly a very different approach to traditional TV. But then, Garland has a track record of successful ventures. And many viewers - myself included -- are sick of the endless commercials and reality shows on TV.
Who knows, digital TV might yet become the new FM in a few years.