RFD-TV Clears Hurdles To Deliver For Rural Audiences

By Linda Haugsted -- Multichannel News, 12/13/2010 12:01:00 AM

Few programming ventures could survive the challenges faced by RFD-TV.

No banks would lend to the fledgling network, as they questioned whether viewers or operators would support a rural-focused channel, according to its founder.

Despite this, RFD-TV launched as a not-forprofit programmer. But an adverse ruling by the Federal Communications Commission in 2007 forced RFD-TV to go commercial, with its operating funds coming from programming providers, the founding family and subscriptions to its programming-guide magazine.

Despite that seemingly shaky foundation, RFD-TV’s management then took its biggest gamble of all — signing a multimillion-dollar contract to bring the TV simulcast of then-disgraced talk jock Don Imus’ radio show to the little-publicized network.

Yet RFD-TV survives: It’s now wrapping up its 10th year of operation, passing 40 million cable and satellite homes.

“We’ve had every [challenge] in the world,” Patrick Gottsch, founder and president of RFD-TV and parent company Rural Media Group, said. But once executives decided it was “about time someone paid attention to rural America,” according to Gottsch, they vowed to stay in business for the long haul.

NON-PROFIT BEGINNING

The channel is named after Rural Free Delivery, the postal service that brought the rural United States into the mainstream 114 years ago.

“One of our goals was to connect city and country. Once, everyone had a family farm,” said Gottsch, who grew up on such a farm near Omaha, Neb., where the channel is now headquartered.

Gottsch left Nebraska, becoming a Chicago commodities broker and a successful C-band satellite dish dealer, before launching the national uplink for RFD-TV in 2000.

“I tried to borrow for years, but I got kicked out of everywhere,” Gottsch said of his visits to bankers on behalf of the privately held channel. “They had questions: Is there an audience? Will the operators support you?”

Gottsch started RFD-TV as a non-profit, televising farm reports and other agriculturerelated programming. Content providers paid for their time.

RFD-TV added to its revenue stream in 2003 by launching RFD-TV the Magazine, with program listings and rural-lifestyle features, for which consumers pay $30 for six issues a year.

The channel’s status as a public-affairs channel allowed it to qualify for a lower-cost slot on satellite lineups, but it still had to reach terms with distributors. Gottsch cited Dish Network chairman and CEO Charlie Ergen as giving RFD-TV its first break.

“He stepped up after years of our trying to get financing,” Gottsch said.

The Dish affiliation agreement allowed RFDTV to launch in 4 million homes. DirecTV added the channel in 2002.

RFD-TV expanded its attractiveness to distributors in 2004, when it moved its production operations to North Star Studios in Nashville, Tenn. That allowed the channel to develop relationships with talent abandoned when The Nashville Network changed its name and format in 2000.

Today, RFD-TV is the home to former TNN stalwarts such as Ralph Emery, Crook & Chase, Marty Stuart and reruns of Hee Haw.

Despite investments in original programming, Gottsch laughs when he concedes the latter remains the most popular programming on the network. “They never did [humor based on] current events. The shows are just as corny as they ever were!” he said.

Chief executive officer Ed Frazier, a longtime sports TV executive, came onboard in 2005. Programming additions helped convince satellite distributors to add RFD-TV to more widely delivered tiers, and affiliations with Headend in the Sky (HITS) and operators such as Charter Communications helped the channel pass 30 million homes by 2006. RFD HD launched in 2009 and is approaching 1 million subscribers, with “significant launches” expected early in 2011, the company says.

The venture’s biggest challenge came in 2007. A competitor, the publication Farm Journal, filed a complaint with the FCC arguing that RFDTV was in fact a commercial operation. The complaint cited the commercial cattle auctions televised on Saturdays since 2006.

That December, the FCC agreed, citing the “special relationship” between RFD-TV and Superior Livestock Auctions.

“We could have fought, but it was clear we couldn’t exist forever as a nonprofit,” said Gottsch. “We have a large and passionate audience” that wanted more from the network and loosened from the non-profit restrictions, RFD-TV could add more entertainment programming, as well as content for its target sectors: agriculture, equine events and rural lifestyle.

“It turned out to be a blessing,” Gottsch said of the FCC ruling. “In the last three years, we’ve really upgraded our programming.”

GAMBLING ON IMUS

The channel’s highest-profile programming gambit was the equivalent of a minnow swallowing a whale. Gottsch reeled in radio star Don Imus, who in 2007 was fired from his longtime radio home, WFAN in New York — as well as his national syndication deal with CBS Radio and TV simulcast deal with MSNBC — for making disparaging remarks about the Rutgers University women’s basketball team.

Imus did a deal with RFD-TV to simulcast Imus in the Morning upon its return to radio later that year on New York’s WABC-AM. Gottsch has never confi rmed how much he paid for the deal with Imus. The New York Times reported at the time it was $5 million per year.

“You produce a show with a big icon like Imus, it’s going to be a very expensive show,” Gottsch said.

The network only carried Imus for 20 months from December 2007 to August 2009. (Imus in the Morning is now on Fox Business Network.)

The Imus show “conflicted with the longterm plan” of RFD-TV, said Gottsch. “We needed the time back for the agriculture side of programming.”

The big-ticket gamble paid off , Gottsch asserted.

“Putting Imus on, with his big [major-market] radio following got us meetings. It got our foot in the door,” he said. Gottsch attributes launches on such major-market systems as Cox Communications in Omaha, Neb., and Comcast in Denver to those post-Imus meetings.

The channel’s growth has not been limited to the U.S. RFDTV has launched RURAL TV, a version of the channel launched for international markets. It is carried, for instance, on British Sky Broadcasting in the United Kingdom, New Zealand, and Brazil with 2011 launches scheduled for Korea, Holland and Tanzania, Kenya and South Africa. RURAL TV programming is proving to be very popular on a global basis and is important to the developing nations with equestrian and music drawing audiences in the more developed countries. RFD-TV continues to expand its original- programming slate, with plans for a national newscast focused on rural concerns. It intends to establish a Washington news desk in the first quarter of next year, as well as bureaus in Chicago to cover the Board of Trade and commodities markets, and even international bureaus in Säo Paulo, Brazil, and other cities.

The goal: A nightly news show, airing weeknights at 7:30 p.m. ET, to follow other network news in most markets. The newcast would repeat the next morning, before commodity markets open.

“Today, if there’s an agriculture-related disaster, like the spread of mad cow disease, networks cover it. But the rest is not covered, like the issue of attracting doctors to small towns,” Gottsch said.

That programming is funded through advertising (though no erectile dysfunction drugs, a ban instituted by Gottsch) and income from the channel’s magazine, now at 180,000 subscriptions and growing at an estimated 20% a year. Revenue is poured back into programming, the executive said, including an on-trend offering in early 2011: a variety show/amateur hour “hosted” by puppet Shotgun Red.

WHO’S WHO AT RFD-TV

Key executives at Rural Media Group’s RFD-TV:

Patrick Gottsch:
president and founder.

Ed Frazier:
chief executive officer.

Steve Campione:
chief financial officer.

Dave Randell:
senior vice president, advertising sales.

Raquel Gottsch:
executive vice president, corporate communications.

Gatsby Gottsch:
executive vice president, finance.

Kelly Kantz:
vice president, general manager.