Technology

Networks See Digital as a Mixed Blessing

10/27/2006 8:00 PM Eastern

For faith-based networks, the market's migration to digital transmission is turning out to be a mixed blessing.

On the one hand, video on demand and additional channel capacity provide more opportunities to reach a wider audience while better serving core viewers. On the other, the new platforms bring more clutter to an increasingly crowded marketplace, where it's tougher to stand out from other religious and secular networks than ever. What's worse, some religious programmers have said that digital distribution has actually reduced some opportunities.

“Channel space has become so precious that cable companies aren't going to give it away, [especially] with the HD [high-definition] demands,” said Rabbi Mark Golub, CEO of Shalom TV, a network that launched in August. “Instead of digital cable opening up all of the niche programming that people predicted it would, it closed opportunities for niche programming.”

That's why Shalom decided to debut as a VOD-only service. Faced with limited capacity due to analog and high-definition requirements — and so many secular and religious networks to choose from — many multichannel operators are more receptive to pitches from on-demand outlets, which require less capacity and provide a way to test the market for new programming.

SPREADING THE WORD

For networks, the good news is that multichannel operators, particularly telco TV providers, said they're interested in carrying more faith-based fare. One example is AT&T, which added The Church Channel, Daystar, INSP and 11 other religious networks to its U-verse TV service in September.

“These aren't the only faith-based channels we plan to offer,” said Brad Mays, an AT&T spokesperson. “We are continually growing our programming lineup, including faith-based channels.”

Some religious networks said that compared to cable multiple-system operators, telco-TV providers are showing more interest in faith-based programming. “They've been a lot more open to Christian programming and to our five channels than many of the cable systems,” said Trinity Broadcasting Network vice president of administration Paul Crouch Jr. “I don't know why that is.”

When cable MSOs and telco-TV providers expand their religious lineups, they're not doing it simply as a public service. Instead, some see a wide, deep selection of faith-based programming as a way to differentiate their offerings from rival operators, just as they do in other genres. For example, U-verse carries 16 music channels.

“Having a wide variety of programming that speaks to the interests of a diverse customer base is a key differentiator,” Mays said.

Market differentiation is an increasingly important issue for religious networks, too. Many programmers view exclusive and original programming as a way to stand out in a crowded faith-based marketplace.

“We've probably licensed or produced more movies in the past five years than we did in the first 30,” said TBN's Crouch. “Documentaries, reality shows and movies are the three areas of new programming that we're pushing harder and putting more money into.”

Why now? TBN and many of its peers say that programming has to change in order to accommodate the changing tastes of its core audiences, as well as the expectations of new viewers, particularly in the younger demographics.

“A guy sitting behind a desk, pontificating on the Bible — people would watch that 20 years ago. Not now,” Crouch said. “Another thing that changed the viewing habits of America is the remote control. That forces you to make your programming as compelling as possible.”

STAYING FOCUSED

The religious market also is steadily moving toward focused offerings, such as networks that cater to a single denomination, such as Shalom TV, or specific demographics, such as TBN's youth-oriented JCTV.

“I think there's some inevitability to that,” said Bill Airy, INSP's chief operating officer. “In the early days of cable, when we had 36 channels, the bulk of the stuff that was on was very general: You had 24-hour sports, but it was all [types of] sports. As digital cable came along, you started to get variations, such as the NFL [Network]. In the era of on-demand, I think it's going to get even more focused and targeted.”

That view is shared by TBN. “The success of the cable industry was based on creating niche networks, such as ESPN and MTV,” said Bob Higley, vice president of affiliate sales and marketing at TBN. “I think that's the next level of faith-based programming.”

If that trend plays out, conventional wisdom says it should bode well for networks that already target a single denomination, such as EWTN. But networks that cater to multiple faiths don't see themselves becoming dinosaurs. One example is Daystar Television Network, which sees capacity issues as one of the reasons why multidenominational networks will continue to flourish.

“I think that in this day and age, we need to be all things to all people because bandwidth is limited,” said Janice Smith, vice president of programming.

Another example is INSP, which says that it currently provides programming for more than 20 denominations across its three U.S. channels. Why would Catholics turn to INSP rather than EWTN, which is almost synonymous with Catholicism? One reason, the company said, is that people of one faith often are interested in other faiths, so they seek programming outside of their denomination.

“The data shows that a high percentage of Catholics are interested in non-Catholic programming,” said John Roos, senior vice president of corporate communications and research at INSP. “Whenever we've done research, we have a high degree of Catholics who watch our network, and they don't watch just Mass.”

Religious networks also are targeting Spanish-speaking audiences, both domestically and abroad. That's not a new effort, but some strategies have changed, largely as a recognition that just as the overall religious audience isn't homogenous, subgroups such as Hispanics are equally diverse.

“In terms of the religious genre as a whole, there's increased interest in how to serve first-, second- and third-generation Hispanics,” said Chris Wegemer, vice president of marketing at EWTN. “Up until a few weeks ago, we had programmed a single network targeting Hispanics for Latin America and the United States. We've just split off the U.S. feed as a separate EWTN Espanol. That will help us customize the very different interests in religious programming in the Spanish-speaking community here [versus] what we do for Mexico and other nations in Latin America.”

DEFINING HD

Like their secular peers, many religious networks are dabbling in HD. As faith-based networks make their content more diverse in terms of format and target audience, the business case for shooting and presenting in HD becomes stronger. For example, mainstays such as preaching-and-teaching programs are giving way to more documentaries, movies and sports, areas in which HD can make a stronger business case.

“We have material shot in HD, and we have HD facilities, but we haven't made that a major focus because the reality is, we're still doing a fair amount of educational programs that involve talking heads,” said Doug Keck, senior vice president for programming, production and radio at EWTN, who sees a major shift to HD as inevitable. “People's blemishes aren't at the top of the list of things to be shown with your HD camera.”

Another potential barrier to HD is system capacity: If channel space is tight, then the operator might avoid adding more high-definition programming.

“We could do a lot of HD,” said Daystar's Smith. “However, you're creating an obstacle in obtaining coverage on the cable systems because even if you have only four programs a day that are HD, their bandwidth has to accommodate that 24/7.”

Another trend is VOD. Although it's a way for religious networks to get carriage from operators that don't have room for another linear network, creating a VOD offering is a significant expense.

“We've told [MSOs]: 'If you want to take our satellite signal, record certain titles, encode them and put them on your server, fine, go for it,'” said TBN's Higley. “The few that have talked about it, when I ask why they don't go ahead and do it, they say, 'We don't have the manpower.' They want us to do all that work.”

But that work is something that even major religious outlets can't easily make a business case for.

“It's such a big expense,” Higley said. “It would cost us $10,000-$20,000 a month to have a dedicated satellite upload.”

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