TV One Coming to DC Area

[CrimsonTide4]

I kept trying to post this info yesterday and just gave up when GC just kept malfunctioning.

washingtonpost.com
Radio One, Comcast in Cable Deal
24-Hour TV Channel To Challenge BET

By Krissah Williams
Washington Post Staff Writer
Monday, January 13, 2003; Page A01


The nation's biggest cable-television operator and its largest African American-owned media company are launching a cable channel to rival Black Entertainment Television, which for 20 years has held a near monopoly on programming aimed exclusively at a black audience.

Philadelphia-based Comcast Corp. and Radio One Inc. of Lanham, Md., which owns 65 urban music stations, are to officially announce their plans today for a 24-hour news and entertainment network targeting African American adults.

The announcement of the Comcast and Radio One cable channel, which is to be based in the Washington area, could turn out to be the opening volley of a locally based media war.

The network will squarely compete with BET, which has 60 million subscribers and has been the nation's leading channel aimed at African American viewers since it was founded in the District two decades ago by Robert L. Johnson.

Since the sale by Johnson of his network to New York media company Viacom Inc. in 2000 for $3 billion, BET has been criticized by some viewers and media watchers inside and outside the black community for programming that they say is tilted toward syndicated repeats and music videos. The criticism escalated last month after BET announced, in a cost-cutting move, that it was ending news programming, including "Teen Summit," where young people discussed issues such as applying to college, and "Lead Story," a roundtable chat about national and international topics.

For Radio One, which founder Catherine Hughes began out of a trailer in 1980, the new channel is an opportunity to target an underserved and increasingly affluent black television audience and to diversify its growing radio business into television, which demands higher advertising rates than radio. In the Washington area, Radio One owns hip-hop station WKYS, adult-contemporary WMMJ, gospel WYCB-AM and talk WOL-AM.

The new network also continues the evolution of Comcast from pure cable-TV operator to national media company. Comcast has had success with channels such as E! Entertainment Television, Style and shopping network QVC and also owns sports teams. The inclusion of an African American-targeted network in the Comcast channel lineup could help the company in other ways: Consumer advocates expressed concern about consolidation in the cable industry following its purchase of AT&T Corp.'s cable systems last year.

Alfred C. Liggins III, chief executive of Radio One and the founder's son, is to be chairman of the as-yet-unnamed network, which executives expect to launch by the middle of the year.

Liggins said he has been planning for four years to expand into television, but had been unable to find a partner until he worked out the deal with Comcast. Under the terms, officials said, Radio One would put up $70 million and provide radio advertising time in markets where Comcast launches the network. Comcast would put up $60 million and offer the network to its subscribers. Comcast and Radio One will each own 38.5 percent of the network. Other investors have not been announced because final deals with them have not yet been made. Liggins said he plans to include a mix of original and syndicated news, entertainment, opinion and sports shows featuring African American newscasters, actors and hosts. He would not say whether that talent will include nationally syndicated morning show host Tom Joyner or other Radio One personalities. The program lineup would be laid out only after he hires the executives to run the station in the coming weeks, he said.

The network will likely have little of the original broadcasting Liggins envisions when it first goes on line, and probably will not need a broadcasting studio immediately, a company spokesman said. The network will begin by buying existing programming and contracting out other studios to record its own shows when necessary, then phase in more original programming over time.

"Growing up in Washington, D.C., and watching BET, it really sort of gave me an idea of how important a television network can be to the black community and empower through disseminating information," said Liggins, who will set the vision for the network.

Comcast's chief executive, Brian L. Roberts, said: "This is a successful partner that knows this target audience extremely well, which should bode well."Comcast and Radio One say they have the cash needed to grab the audience. Both have grown quickly to become the largest players in their spheres. Comcast, which has a stock market value of $62.1 billion, last year acquired AT&T Corp.'s broadband business for $47.5 billion and pumped its subscriber rolls to 21.4 million. The company has about 1.5 million subscribers in the Washington area.

Radio One, with a market capitalization of $1.6 billion, went on an acquisition binge in 2001 and doubled its size to create the national network of stations that Liggins hopes to leverage into a more diversified media company.

The cable network will be separate from Comcast and Radio One, with 50 to 75 employees, said Liggins. The partners have not decided which markets the network will be launched in, and said they could not yet say whether it will be shown in the Washington area. They did note that Comcast broadcasts in 21 of the top 25 markets, home to half of all the black people in America. The network will target viewers 25 to 54 years of age.

Typically, the most-watched shows on network and cable television by black viewers feature black actors.

"This is an underserved community of viewers that is one of the fastest growing in household income as well as popularity," said Roberts, whose father founded Comcast. "This serves our customers as well as our shareholders."

The network takes on BET, with 60 million subscribers, at a potentially advantageous time. When Viacom bought the station, analysts predicted the company would add to BET's programming, which was already being cited as too entertainment heavy, but the weak advertising market forced Viacom to scale back its ambitions.

BET officials have said they were forced to cut the last of the news shows last month because they continued to lose money and could not pull in enough viewers to boost advertising rates.

Over the past two years, Viacom has been able to increase BET's ad revenue, however. At the time of the sale, analysts said the network's advertising was largely undersold. Cable systems that carried BET paid the network 14 cents per household, known as the carriage rate, less than the typical rate paid to other networks. Viacom was able to boost the ad revenue by bundling sales for BET with that of its urban formatted radio stations, billboards in urban areas and its UPN Television network.

"Advertisers were not giving them their fair share of advertising dollars," Liggins said. "I believe that Viacom is doing a much better job in helping BET realize their share of the advertising dollar and that's only going to bode well for us."

Liggins contrasted BET's dominance with the proliferation and growth of Spanish-language networks in the past few years. Univision, the largest U.S.-based Spanish-language station, had revenue of $1 billion last year. Rival Telemundo was recently bought by NBC for $2.7 billion.

"There are more black people than Hispanic people in the U.S. today," Liggins said. "There are five major Hispanic networks in the U.S. and something like 25 fledgling ones. The market can clearly support new ideas in this area and a second network."

Liggins said that before signing the deal with Roberts, he pitched his idea to a number of cable and satellite operators and invested a little more than $3 million in Chevy Chase-based New Urban Entertainment Television, which failed to sell its idea for an African American targeted network and gave up last year.

Liggins said he has the capital and relationships to make his network work.

"We create programming," Liggins said. "We're respected enough in the community that we'll attract the brilliant talent needed to help this television network become one that people can be proud of."

Staff writer Frank Ahrens contributed to this report.



© 2003 The Washington Post Company