The Demand For New Networks
By Sheldon I. Altfeld
“The Cable Maven”
Back in 1993, when I began conducting seminars on “How To Start Your Own Cable TV Network,” there were approximately 150 cable networks operating and the press was continually touting the so-called “500 Channel Universe.” To make what I considered a humorous statement about the proliferation of new networks, I put a new cover on the New York phone directory and declared it as our next “Cable Programming Directory.”
It turns out that the joke was on me, because as of November, 2007 (the most recent date available), the National Cable Telecommunication Association (www.ncta.com) lists 565 national cable networks being carried by 8,177 cable systems that serve 65,600,000 subscribers. Who knew?
In today’s rapidly expanding technology, networks seeking eyeballs have vast horizons to explore, including the Internet, cell phones, iPods – all in addition to broadcast, cable and satellite. With the scramble of broadcast stations to convert their channels to digital before the Federal mandate on February 17, 2009, plus the merger and consolidation of cable and satellite programming services, new networks are finding the Internet their new frontier. According to a report by Pew Internet & American Life Project, 84 million Americans are now using broadband at home, an increase of 40% over 2006.
Entrepreneurs with ideas for starting their own network – especially if they’re planning to serve a niche audience – are discovering a whole new horizon by initially launching on the Internet. And advertisers have discovered unique target markets by increasing their Internet budgets. The Interactive Advertising Bureau and PricewaterhouseCoopers estimate that Internet advertising revenues for 2007 reached $21 billion, a 25 percent increase over the previous record of $16.5 billion in 2006.
Costs for starting an Internet network are considerably cheaper than for a cable network. Since programming does not have to be linear on a broadband network, and most programming is presented in short segment form rather than full-length program, production costs are substantially minimized. Moreover, instead of leasing a satellite transponder to transmit its programming, an Internet network can just lease servers.
Making the transition of the Internet to cable has now been simplified significantly. Cable systems, which once complained of not having enough satellite dishes to receive all of the programming being aimed at them, can now receive network programming via broadband and fiber optics.
A key factor of investors in Internet networks is being able to quantify its audience. With sophisticated data-mining, investors and advertisers are able to receive accurate information on how many people access a given website, what pages they viewed, how long they stayed on the site, and even what part of the country (or world, for that matter) they live in.
All of that having been said, when the digital transition takes place next year, virtually all forms of communication will be on a level playing field. Television viewers that currently watch their TV’s with a roof antenna or rabbit ears will have to purchase a special set-top box to watch TV, or all they’ll get on their set is snow.
Cable television, broadcast television, Broadband, IPTV, Cell Phones, iPod’s, FIOS, and many venues not even invented yet will all be converted to digital (if they’re not already) and it will become a whole new world for consumers. However, I predict that there will be an increased demand for new programming channels – especially niche channels that serve a presently under-served marketplace.
Entrepreneurs need to do their homework and prepare a comprehensive Business Plan. There’s money out there, but as I constantly remind my clients: You only get ONE chance to make a FIRST impression, so DO NOT attempt to pitch your idea(s) until you have all of your ducks in a row.
There is definitely no shortage of ideas for new information, education and entertainment networks, and these days there’s no shortage of venues to carry those networks. It’s the 21st Century renaissance in television.
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