Presentation on theme: "Cable System Programming. The Job of the Cable System Programmer Select from over 200 satellite delivered networks Schedule the networks Evaluate the."— Presentation transcript:
The Job of the Cable System Programmer Select from over 200 satellite delivered networks Schedule the networks Evaluate the program services
Decisions that the cable programmer makes Which networks to add or delete Which networks to piggyback Which syndicated services to subscribe to Whether or not there will be any local origination programming, or access channels, or leased channels Tiering strategies
The problem of Audience Evaluation The number of subscribers is known What is difficult to assess is the number of individual viewers in your market of channels and programs on those channels. Cable viewing doesnt fare well when compared to the broadcast networks. Cable has a very segmented audience.
The problem of Churn Churn refers to the number of connects and disconnects that a system experiences. 30% Churn per year spells disaster The number of disconnects divided by the number of new connects multiplied by 100 = %churn The programmer is held responsible for the churn level.
The differences in broadcast and cable programming The broadcast programmer selects programs, produces programs, or buys programs for an individual channel The cable programmer buys entire satellite delivered networks and then tiers the networks and services.
More differences... A station makes revenue or advertising sales or time sales. A cable system makes money from subscriber fees, spot sales, and kickbacks from shopping channels. A station is connected to a single network and a cable system is connected to many networks and services.
Factors that influence the programmers decisions legal responsibilities technological capabilities economic factors local market considerations
Legal Responsibilities Cable Act of 1984 provides for PEG channels 1995 Federal courts ruled that cable operators can censor indecent content on leased and access channels-being challenged under free speech rules in the courts Syndex rules Franchise requirements
Technological Capabilities Channel capacity of the system? Digital compression algorithms Is the system addressable? (send customized packages of channels to subscribers) Broad enough band width to be interactive Carry high speed data networks and internet capability
Economic Factors Affecting Program Decisions How many local avails on basic networks are available to the system? What are the copyright royalty fees for sports presentations? How much in subscriber fees is kickbacked to the system from the premium nets? How much in subscriber buys is kickbacked from the shopping channels? How much free promotional support?
Marketing Considerations minimize disconnects, maximize connects content clusters that fit your demographics broad appeal (USA) and narrowcast services theme networks (golf, romance, food, car networks design something for lift
Steps in Programming the System Schedule the must carries Schedule the local channels Select the premium channels Select a balance of narrow and broad appeal channels Plan for lift
Tiering Strategies tier local stations, must carries, and access channels below 13 tier family content next tier news and information culture religion tier movie channels tier specialty channels tier premium channels tier adult fare
Local Origination local cable company productions, regional sports, news, syndicated off network programs, first run series, links with networks (UPN, Warner) not on system) PEG channels public educational government News Inserts (5 minutes of local news at the the top of the hour before CNN)
Basic Cable Network Programming –Tiered content sports news, information music arts/culture adult religious foreign language/ ethnic educational/ instructional shopping
Basic Cable Channels include 150+ nationwide advertising supported channels superstations promotional guides and interactive services text only services regional services
Types of Basic Networks Foundation Networks: established, popular, (ESPN, CNN, TBS) Niche or Theme Networks: single program content (shopping, MTV, Comedy Channel) Subniche networks: sub offerings from the niche nets (Latino MTV from MTV or Animal Planet from The Discovery Channel ) Microniche services: target a population subgroup (Asian American Satellite TV, Americas Disability Channel
The Future of Cable 500 channels digital compression algorithms cafeteria plans of selection extreme narrowcasting focus of continuing and credit learning Will we put a nation of mouse potatoes?
What changes in regulation will we see? Prior regulation was based on the scarcity of the airwaves phenomena. Scarcity regulation will crumble with the emergence of digital New forms of regulation for content and advertising will emerge
How do the basic nets make money? What are the problems ? carriage fees (paid by systems to individual nets-usually 10-40 cents per household subscriber) advertising revenue Problems: low penetration for the newcomer credit crunch at the banks the industry is cannibalizing itself
How do you launch a new cable network? Start up costs can be from 40-100 million and monthly satellite fees for transponder space can be 100-200 thousand Pay the MSO to carry you instead of taking carriage fees from them Allow a generous amount of ad time for the MSO to sell
A Successful Launch Requires: distribution of signals stable regulatory environment money good business model clear niche programming aggressive marketing plan for expansion Best bet: MSO support
Before and After Market Strategies Marketers provide before market services: web pages, home videos, dbs rights, MSO carries, ad sales, and marketing plans Cable nets pay lower residuals and cable has become a prime aftermarket for series, movies, and programs. More rarely cable is foremarket with a program moving from cable to net TV
Signature Programming Four types: original movies or series narrow theme genres niche audience programs cable exclusives
Original Movies or Series not shown elsewhere TNTs Avenging Angel USAs Problem Child expensive to produce highly promoted attract new viewers first run programs build brand image for the cable network
Narrow theme Genres a cable channel with vertical programming repeats a narrow theme all night club comedy, all shopping, all weather
Niche Audience Programming narrowly defined demographic target group USAs Highlander: The Animated Series gives a specific brand image for blocks of time
Cable Exclusives least common form programs that have been shown once or twice on broadcast networks and then gone to cable
Vignettes short form programming usually on pay services fill odd times when movies end Comedy Channels Pipeline, Topicals attracts surfers because vignettes usually play when other nets are in commercial time
Marathons continuous program scheduling of the same series usually used to counterprogram some blockbuster show on the competition (Superbowl) promoted heavily, remind viewers of channel image
Cable Content and Audience Appeals Broad appeal nets: USA (the top rated basic cable network with original programs like Silk Stalkings and broad appeal off network reruns-1/2 of their prime time is original TBS, TNT, The Family Channel, Arts and Entertainment are other broad appeals networks.
Niche Networks provide a mix of original and off network programs that target a defined audience Comedy Central-improv, comic series, specials, movies Lifetime-service for women Nickelodeon -original programs for children, classic TV at night E!-Talk Soup, about 1/3 off network reruns
Sports top sports producers are ESPN I and II original series on ESPN include The Extreme Games, College Gameday, Up Close, and Outside the Lines other sports services are : The Golf Channel, Prime Network, TNTN, TBS, the superstations, Car Talk and Sports
Video Music MTV was the first 24 hour music video service and pushed music off the broadcast nets. targets younger views, offers games, talk, interviews, news, cinema verite (The Real World), animation (Beavis), and spun off M2 VH1 is an MTV net, competitors: TNN, CMT, BET,
Educational/Informational/ Entertainment Discovery is a premiere basic net. Covers: science, nature, history exploration, adventure Weather Channel is all original programming and vertical
News and Public Affairs CNN is the leader and draws older, upscale demographics. CNN draws about 400,000 viewers worldwide ( a very small audience) during peak hours. FNN and CNBC are niche services.
Religion External World TV, Faith and Values, Inspirational Net, Trinity Broadcasting, and the Worship Network pay lucrative carriage to companies for carriage, run by nonprofit organizations, about 1/4 of the schedule is informercials for inspirational products, 1/4 of the schedule is from shopping
Home Shopping a 2.5 billion business by 1995 and projected to be a 100 billion business by 2010 Cable operators use their cut to pay for fiber lines, set top boxes, and channel rebuilds. QVC is the leader with 85 million subscribers and net sales of < 2 billion.
Ethnic/ Foreign Language BET was the first, has corporate partnerships with Time Warner and TCI, shows music, sports, sitcoms, specials, talk and news, is a full service offering Univision, Telemundo, Galavision are Spanish language programming (movies, soap operas, talk), delivered to U.S. Mexico and South America Others: International Channel (22 Asian, European and Middle Eastern languages), The Filipino Channel, TV Asia, TV5 (French), and ANA( Arabic)
Movies and Arts AMC: uncut movies, movie history, old travel reels, vintage pr releases from the studios, some original programming Bravo: 24 hour film and arts net, international films, performing arts, interviews, some original programming. Disney: switching from pay to basic, family oriented, specials, movies,
Childrens Services Disney Nick at Nite USAs KidVid blocks
New Micro Niche Channels Classic Sports -Reruns of great moments The Hobby Craft Network American Lawyer The Cowboy Network The Automotive Television Network
Program Guides printed (generic or specific to the channel such as HB0) electronic text scroll video guide (barker channel) the most expensive option, Prevue Networks, Sneak Prevue, Interactive Program Data
Basic Audio Services Basic Audio services include AEI Network, 6 satellite delivered music channels (music for businesses) Cable Radio Network, ac music, talk, used under cg, as telephone hold music CPAN I and II
Premium Audio Services Digital Music Express (DMX) provides 76 channels of CD quality music Music choice (MC) 30 channels of music
Premium Programming Services umbrella term for specialized entertainment services that are an add on to basic services pay cable services (premium entertainment offered for a monthly subscription price) Pay-per view, PPV, (charges assessed on a program by program basis
Methods of Signal Distribution cable connection (most common) direct broadcast services (home satellite) SMATV Microwave distribution (wireless cable)
The problems of Shelf Space The cable companys available channels are its shelf space Premium services compete for limited shelf space in this pre-digital age. HBO is usually the first pick and the only pick is shelf space is limited. Competitors: Cinemax, Encore, Showtime, Flix Starz! Premium services give a system lift
Pay Per View Competitors Request Television Viewers Choice Cable Video Store Playboy Action Spice Adam and Eve Adultvision
Multipay Environments( paying for additional services above basic) assumptions about how much the average household were pay for cable proved low Churn, substitutions, spins (moving from one pay service to another), and downgrades are part of the multipay environment. Pay services try to differentiate themselves and timeshift their start times.
Revenue Split between the company and the pay services Subscribers pay about $8-12 per month per channel. 40-50% of the revenue goes to the cable company. Premium channels offer operators discounts and incentives
Video on Demand (VOD) Menu driven rather than schedule driven. Viewers construct their own programming environment. Internet will drive VOD further as we enter a server based environment.
Major Program Genres of Pay Channels Movies Entertainment Specials Sports
Movies are the staple of premium channels rotation schedules (20-100 programs per month rotated 3-8 times) rotation goal is to maximize the potential audience for each program Movie channels care less about the rating of an individual show than the subscriber base for the service (the buy rate). Movies are balanced by urban/rural, 18-24, 25-49, 50+, gender first run, theater release, encore presentations balance the schedule
Movies shown unedited and without commercials feature films are licensed to pay nets by per subscriber or by flat fee film placement: start film at 8pm, final showing at 11:30, an evening is 3-5 programs, rounded out by shorts, interviews, promos, about 4 premieres a week, counterprogramming the nets (Monday football), mature themes are later in the evening
Entertainment Specials original movies, series, Las Vegas acts, night club acts (all uncensored) pay cables flexibility has allowed odd time events to run into the next hour or half hour
Sports HBO and Showtime schedule national events, boxing, regional college sports, soccer, and equestrian sports in prime time. The four biggest nets still have a lock on the Super bowl and the biggest events. Basketball is on PPV.
The Pay Services Cinemax HBO Movie Channel Showtime Disney Encore 8 Flix Starz
Cinemax debuted 1980 division of Time Warner geared to younger audience more films than any other dovetails its schedule to not conflict with HBO includes comedy, music and specials
HBO uses theatrical films soon after their run and some original programming, series, and showcases created Tri Star studios parent company is Time Warner has 50% of the pay market used to give lift to a cable company new agreement with DreamWorks studio
The Movie Channel only feature films no specials, sports, or showcases programs some vintage movies rights to Paramount films from 1998- 2004
Showtime is usually the 2nd or 3rd addition of the pay channels feature films, dramatic series, comedic series hopes to enter HDTV with wide screen movie library before HBO
The Disney Channel launched in 1983, fastest growing pay channel in the 1980s does not play the classics like Sleeping Beauty, plays movies, non classic Disney offerings, original series is moving to basic cable from pay cable
Encore 8 older films target age group of 30+ titles run 12X a month launched 1991, only $1-$5 a month
Flix launched by Showtime in 1992 targets multipay households and is free to subscribers of 3+ services shows movies from the 1970s and 1980s may be ripe for a merger with other more lucrative premium channels
Starz offspring of Encore created by TCI has claim on Hollywood Pictures and Touchstone Pictures will become a major competitor with HBO
Pay per View Networks Subscribers select from a menu and phone n their selection. Primary content is movies, then sports, and concerts Consumers experience ordering difficulty and dont like the costs.
Pay Per View: Request Television distributes : 4-6 movies per week and some boxing and wrestling distribution is to cable operators revenue is split between cable system and Request
Pay Per View: Viewers Choice offers 50-60 movies a month offers only a few new releases patterned after the broad offerings of a video rental store
Playboy TV and Spice instant brand recognition like Disney changed from pay cable to PPV 75% is original programming plays movies and music videos no duplicate programming for a week Spice I and II, also PPV, offer only movies
PPV: In house services Time Warner offers Home Theater in New York City. Large MSOs negotiate directly with sports promoters and Hollywood studios.
The future of the Premium Channels Pressure from VOD will move them from pay to basic. Disney, Bravo and AMC have already migrated. Compression will bring more competition. Streaming video on the internet will bring huge VOD offerings.