From Versus to Horror: Expanding a Network Portfolio

Comcast Corp.'s programming fiefdom, an eclectic group of channels that counts E! Entertainment Television as its flagship, is in for some changes this fall.

Today, the cable operator's programming unit is officially rebranding its OLN network as Versus. And in another significant undertaking, Comcast will launch an on-demand horror channel next month, on Halloween. It's the first of a number of such nonlinear channels that Comcast has in the works.

Spearheading these moves is Jeff Shell, president of Comcast Programming Group. Shell, who became chief of Comcast's cable networks in May 2005, has spent the past 17 months trying to sharply focus their strategies, maximize their performances and expand the content portfolio as well.

The relaunch of OLN — once called Outdoor Life Network — as Versus reflects the channel's move beyond hunting and fishing fare to a broader niche that includes competition ranging from the National Hockey League to professional cycling to Survivor, according to Shell. He conceded that the new name, Versus, has received some mixed reactions, but said that “for the most part,” it's been good.

“OLN was really a placeholder from our old positioning to our new positioning,” Shell said.

Especially crucial for Comcast: the Oct. 31 launch of a “virtual” horror network via Comcast On Demand, as well as on broadband. It's a model the nation's biggest cable operator plans to use going forward as it creates new programming services, as opposed to traditional 24-hour networks. Shell expects to debut several more of these combination video-on-demand/online networks next year.

“Our goal would be to get a couple of months under our belts with the horror channel, and then really next year, in 2007, launch more of these,” he said. “We have somewhere between five and 10 ideas that are exciting, but the number we actually do will depend on the timing, how quickly they come together.”

During his tenure Shell, a veteran of Fox Cable Networks Group and Gemstar-TV Guide International Inc., has completed his mandate of consolidating Comcast's programming assets under one tent, centralizing such functions as affiliate sales.

The portfolio includes E!-spinoff Style, gaming-lifestyle network G4, The Golf Channel, PBS Kids Sprout, Asian-American culture programmer AZN; four Comcast SportsNet-branded regional sports channels; as well as stakes in TV One, SportsNet New York (SNY), Comcast Sports Southeast (CSS) and The mtn. — Mountain West Sports Network.

After Comcast made an unsuccessful bid to acquire content giant The Walt Disney Co. in 2004, “they decided to build, rather than buy, and Jeff Shell was kind of the answer to that,” said Adi Kishore, director of the media team at The Yankee Group.

Retooling and bolstering OLN and E! were two of Shell's priorities upon joining Comcast. On his watch, OLN not only acquired rights to the National Hockey League and Arena Football League, but to air reruns of CBS's Survivor as well. Coverage of the Tour de France has remained a linchpin of OLN's schedule, as well.

“With Versus, our strategy — which hopefully is the right one; I think it is — is really to build around certain tent poles and not try to have everything,” Shell said. “I like the fact that during the NHL playoffs, we could be wall-to-wall hockey and not have to cover the NBA. I like the fact that during the Tour de France, we could be wall-to-wall cycling and not really cover everything else.”

E! — which, in Shell's opinion, had been “adrift” — is back on track “as the gold-plated source of celebrity news,” according to Shell. The hiring of American Idol host Ryan Seacrest and the acquisition of The Simple Life have boosted E!'s ratings and strengthened its credibility as a chronicler of pop culture, he said.

Comcast Programming is also expanding with new offerings, and that's where the horror network comes in. The on-demand service, will be the first product born out of a joint venture that Comcast and Sony Corp. formed last year, after the companies partnered to buy Metro-Goldwyn-Mayer Inc. for $4.9 billion.

“We think it's a great first genre to do,” he said. “It's a category that's not really served right now, and with the demographics for horror tending to be a bit younger, it's the perfect demographic to start this nonlinear mode with, to really blow it out.”

On-demand services are less expensive to launch and run, since “you're not programming [for] 24 hours,” according to Shell. And this VOD model is popular with distributors, “because you're not forcing them to carry a whole linear channel,” he said.

Kishore isn't surprised that Comcast is foregoing linear networks at this juncture. “That's an MSO talking, right? You want to push VOD,” he said. “From Comcast's perspective, if they can launch more and more on-demand content, that helps them drive VOD.”

The on-demand model does raise two questions: Can you attract an audience without a channel slot, which gives channel-surfing viewers a chance to sample a network? And is there a viable advertising model?

“We're more and more confident that we're going to be successful in both of those [viewership and ad revenue],” Shell said.

Comcast's preschool network, PBS Kids Sprout, has enjoyed success as both a traditional network and on VOD this past year, according to Shell. Sprout is consistently the operator's No. 1 on-demand service for kids, and ranks No. 3 overall among Comcast's free VOD services, with 8.1 million orders in July.

Comcast has its challenges as a regional sports programmer. For example, Comcast SportsNet Mid-Atlantic will no longer hold the local TV rights to Baltimore Orioles games at the end of this season.

Even without the Orioles, Shell maintains that CSN Mid-Atlantic is a strong regional sports service with three programming tent poles — the NBA's Washington Wizards, the NHL's Washington Capitals and college sports from the Atlantic Coast Conference.

According to Kishore, a company having a foot “in both camps,” distribution and content, “gives you a lot of opportunity to leverage synergies.” But Shell denies that he has a home-court advantage securing distribution for Comcast-owned networks on the cable company's systems, which reach 23.3 million homes.

“People outside the company would be surprised at how I have to go through the same process with Matt Bond [Comcast's executive vice president of content acquisitions] that everybody else on the outside has to,” Shell said.

“I have the benefit of being able to walk down the hall as opposed to getting on a plane to see him. But it's just as difficult.”