Who needs niche tv?

Cable and satellite provide potential media players with the chance to launch their own TV stations. But, as Meg Carter finds out, ‘MeTV’ is a very hit-and-miss affair, for which nobody has found a foolproof recipe

Cable and satellite provide potential media players with the chance to

launch their own TV stations. But, as Meg Carter finds out, ‘MeTV’ is a

very hit-and-miss affair, for which nobody has found a foolproof recipe

Would-be media moguls from the UK have been beating a path to Foley

Street W1, where, for just a few hundred pounds, they can purchase a

licence to broadcast on their own cable or satellite channel. So far,

the Independent Television Commission has issued 191 such licences, most

of which are for UK services. Of these, 147 are now broadcasting and a

further 44 are yet to go on air.

Putting together an application is simple - just find pounds 200 for the

annual licence and pounds 125 for the one-off application fee. ‘Licences

are available almost on demand,’ Suzanne Prance, of the ITC, explains.

‘Provided, that is, the applicant is a fit and proper person and that

they are prepared to operate within ITC guidelines.’ In other words, so

long as you are not from any political group or a local authority (or an

advertising agency) and you meet existing cross-media ownership rules.

This licensing system has already produced a range of local cable and

specialist channels, ranging from the Asian Zee TV to Muslim Television

Ahmadiyya, from Christian Channel Europe to a host of community

stations. At the last count, the swelling ranks of channel wannabes

included five Asian, three African, three Christian, three ‘adult’, two

health, one racing and nine regional programme services. Not to mention

two weather channels and the teen station, Rapture, launching later this


Finally, it seems, a new era of ‘MeTV’ is dawning - one where anyone can

launch their own channel.

Well, that’s the theory. In fact, a number of forces are delaying the

anticipated explosion of new channels. Question marks hang over the

commercial viability of many. Meanwhile, the cable and satellite market

is in a serious state of flux, making long-term planning difficult. ‘If

you’re interested in launching a special-interest cable or satellite

channel, your enthusiasm may blind you to the market dynamics,’ one

existing cable channel executive observes.

It’s easy to see why. First, there just isn’t the capacity to support

all those that want to launch. In fact, the only way to start a channel

at present is on cable - existing satellite capacity is full - or by

acquiring an existing channel and reformatting it, as Flextech plans to

do with the Family Channel, which it bought last month and will relaunch

this autumn as a service for upmarket housewives.

Satellite transponders on the Astra satellite are crammed in. That’s why

Granada Sky Broadcasting, which launches eight niche channels this

autumn, will, in fact, comprise themed strands running only a couple of

hours a day. New channels are now struggling to secure carriage deals

with major cable players - a prerequisite to launch.

‘Cable operators increasingly want programming deliverable by satellite

rather than tape,’ explains one prospective channel source. ‘it’s Catch


Cable system capacity is also nearing its limit - a situation

exacerbated by the cluster of continental services (such as TVE and TV5)

that many operators still carry for free. Few are willing to drop these,

or commit to long-term deals with new players, as they ponder the most

effective ways to restructure channel packages. ‘Operators are keen not

to see the cost of a cable package exceed Sky. If a new channel costs

10p or 20p per month per subscriber, this could take them over, as

margins are so tight,’ one insider explains.

Digital television is beingtouted as the Great White Hope. It will

enable eight to ten channels to occupy the same satellite capacity

currently needed for one, reducing the price, which has been inflated by

limited supply. Europe’s digital TV revolution starts in earnest later

this month when Canal Plus, the French pay-TV company, launches 20

channels. Within a couple of years, hundreds of new services could be

available throughout Europe, analysts predict.

But digital’s speedy UK evolution looks uncertain. Eighteen months ago,

Rupert Murdoch talked of Sky launching digital in the first quarter of

1996; earlier this month he signalled this will now be in autumn 1997.

Other UK players are now widely expected to delay digital until it is

established in France and Germany - when critical mass will force down

the price of digital decoder boxes. Small wonder, then, if new channels

are struggling even before launch.

‘The carriage situation is difficult,’ Ashley Dartnell, managing

director of Tara Television, concedes. Tara is an Irish entertainment

channel planning a mix of drama, soaps, music, comedy, sport, children’s

shows, news and current affairs. It’s backed by United International

Holdings Programming and 80 per cent of its output will come from the

Irish broadcaster, RTE. ‘Despite most cable operators liking the

channel,’ Dartnell says, ‘all are assessing how to structure their line-


This means that few are willing to commit to carriage terms. Dartnell

continues: ‘They want flexibility to put us in to a narrower tier -

something we’re against. You either need broad carriage or a high

price.’ The difference between reaching 80 per cent and 45 per cent of

subscribers has a dramatic effect on potential revenue, she adds. ‘It’s

a problem all new channels are facing now.’

Prospective channels need either mass coverage as part of a cable

supplier’s basic programme package or inclusion in an a la carte

package, where subscribers buy individual channels. The latter means

higher subscription revenues but lower advertising because of smaller

audiences. Yet cable operators are looking for exclusive programming to

drive new subscription sales as well as hold on to existing subscribers.

The Food Channel, backed by US and UK money, plans to launch on 1

September. The chief executive, Richard Patching, describes it as ‘niche

in terms of programming, yet with mass appeal’. Dedicated to food, the

24-hour channel is in discussion with 15 cable operators. ‘Securing a

deal has less to do with the concept and more to do with the added value

and price that can be offered to the cable operator,’ Patching explains.

This bodes ill for services aimed at niche audiences. ‘We believe there

is a market to sustain new, different-language programme services from

the Indian sub-continent,’ says Harish Joshi, chairman of the Asian

channel, Apna TV. However, the potential demand and the value of this

market for advertisers is widely underestimated, he claims. Apna has

already secured backing to launch in a number of territories, although

is yet to go on-air in the UK. ‘We need to raise advertiser awareness

almost more than anything else,’ Apna adds.

Maybe, but agencies are unconvinced. While some eulogise about more

choice and the future proliferation of tightly targeted, niche channels,

others say that their prime interest is mainstream fare. ‘What do you

add to an over-populated marketplace? It’s got to be something not

necessarily different, but tightly targeted. Big headline shows that

mean people make an appointment to view,’ says Simon Cox, head of

broadcasting at CIA Medianetwork.

The Box does well because it serves a large advertiser base: the record

industry, Cox adds - ‘but I can see few products synergistic with

weather’. The Network’s media group director, Phil Teeman, believes

there’s still scope for more women’s-based channels - ‘an undercatered-

for market, despite the success of UK Living’. He also sees potential

for magazine formats such as DIY, men’s interests, lifestyles and

hobbies, but questions whether there is sufficient advertising money to

go round.

So how can new channels make a business? Ashley Faull, managing director

of Video Jukebox Network, the company behind the interactive cable music

channel, the Box, in Continental Europe, believes pan-European or global

formats are one way. ‘You may have only 3 per cent of the UK cable

market, but with 3 per cent in France, Germany and Holland too, you

could have a viable business. We see the market as totally localised,

but global.’

A redefinition of the industry’s economics is also needed, he believes.

‘Rather than being a 12-, 18- or 24-hour service, ‘channel’ is more

likely to mean four hours of programming repeated six times a day.

Otherwise, niche channels almost certainly won’t be able to exist as

premium pay channels. And unless transponder space falls in price or

cheap US programming becomes available, almost all prospective services

risk disappearing without a trace.’

Relaxation of existing restrictions on sponsorship is also required,

says the broadcast-sponsorship consultant, Hugh Geech. ‘All the new

channels that want to launch won’t be able to survive in the current

market,’ he says.

Existing ITC rules make a number of proposed services unviable. ‘Local

programming channels are unable to get funding from local government,

despite safeguards that ensure public money is not spent on political

propaganda,’ Geech adds. Meanwhile, special-interest services, such as

the Food Channel, are restricted from attracting money from companies

whose business is relevant to the content of the station.

The ITC is now reviewing this code, although a consultation document has

been delayed until late summer. For now, the MeTV promise seems to be

only within reach of the bravest, the richest and the best-connected.

‘The only serious contenders are those whose ancestry makes it

impossible for cable channels to say ‘no’,’ Dartnell observes. ‘Other

than that, there’s no such thing as ‘a sure thing’.’

There have been 191 service licences granted by the ITC so far, of which

147 are broadcasting and 44 are yet to go on-air. Among those about to


Name: Rapture

Launch date: Autumn 1996

Positioning: UK’s first teen channel

Programming: Not what you’d think - more than 90s-style ‘yoof’-fare and

rave - in fact, a blend of information, education and entertainment for

today’s teenagers, backed by MAI

What buyers say: An interesting concept - but a fine balance must be

trodden if it is to please parents and still appeal to this most elusive

TV consumer

Name: Sega Channel

Launch date: 1997

Positioning: Wall-to-wall games

Programming: Satellite and cable subscribers will be able to download 25

Mega Drive games a month for a flat charge of pounds 10. A V-chip device

will be built into the channel, allowing parents to limit the amount of

time their children spend playing the games. As well as the games, it

will also feature game tips, the latest Sega news, competitions and

previews of soon-to-be-released titles

What buyers say: Already a smash hit in Canada and the US, many cable

sources are convinced that it is a surefire winner; agencies are hopeful

it could allow access to otherwise unreachable teenagers and young

adults; cynics think computer games are dead

Name: The Weather Channel

Launch date: 1 June 1996

Positioning: All the weather you could possibly want, 24 hours a day

Programming: Watch out for series on weather and health, weather and

sport, educational output. Also aviation weather, beach reports, holiday

countdown and business travel updates

What buyers say: Ad agencies remain unconvinced, not least as this is

one of two weather channels which are to launch this summer

Name: The Food Channel

Launch date: 1 September 1996

Positioning: 24-hour food programming. The channel is in discussion with

15 cable operators

Programming: Described by its chief executive, Richard Patching, as

‘niche in terms of programming, yet with mass appeal’. From growing and

preparing food, to cooking and eating it - a broad range of programming

including how-to, documentaries and food-themed feature films

What buyers say: An appealing programme genre - especially for potential

advertising sponsors, but is it really sustainable 24 hours a day?

Name: Rainbow Television Network

Launch date: 1997

Positioning: Britain’s first gay and lesbian TV channel - aimed both at

the gay community and ‘gay-friendly’ heteros

Programming: General entertainment, not ‘adult’ (ie porn)

What buyers say: Nice idea, but secrecy shrouds the names of its backers

and senior executives - leading sceptics to suggest it is just a

cynical attempt by big business to cash in on the ‘pink pound’

Name: Ark2

Launch date: Autumn 1996 (already postponed once)

Positioning: Christian

Programming: Broad mix, united by a Christian perspective

What buyers say: Must avoid going the ‘evangelical’ route trodden by the

pan-European satellite service, Christian Channel Europe. While

evangelism has enabled CCE to successfully attract US investment and

programming, the approach has already alienated many more traditional

Christian viewers

Before commenting please read our rules for commenting on articles.

If you see a comment you find offensive, you can flag it as inappropriate. In the top right-hand corner of an individual comment, you will see 'flag as inappropriate'. Clicking this prompts us to review the comment. For further information see our rules for commenting on articles.

comments powered by Disqus