ACTION NEEDS A HERO1/07/2001 7:00 PM Eastern
BET Holdings Inc. will shut down its BET Action Pay-Per-View network on March 31 unless it can find a suitable buyer for the beleaguered service.
Facing limited distribution and unable to effectively compete with In Demand's multichannel, digital PPV service, industry executives said the single-channel, analog Action PPV faces a difficult task in finding a prospective investor within three months.
Though the 9-million-subscriber service pales in comparison with the fully distributed In Demand, BET Action PPV affiliates say they're happy with the buy-rate performance of the service and disappointed it could be headed for the scrap heap.
In a certified letter sent to affiliates last week, BET said it plans to close the service on March 31 if a buyer is not found. It bought Action PPV from Avalon Communications in 1993.
The letter confirmed recent speculation about the fate of Action, which was the only BET-owned cable network not included of the $3 billion Black Entertainment Television sale to Viacom Inc.
Instead, the service remains controlled by BET Holdings Inc., which is owned by BET chairman Robert Johnson, Liberty Media Group and BET president and COO Debra Lee.
Sources close to the situation said BET has unsuccessfully shopped the service to both cable and non-cable entities since the Viacom deal in November.
Action PPV president Curtis Symonds confirmed BET's plans for the service. But he said he holds out hope that the network can be sold before March 31.
Symonds would not reveal the network's asking price.
"We're still working with a number of companies to try to keep Action in business," Symonds said.
But industry executives believe the single-channel, analog PPV service as currently constructed has little value in a fast-evolving, digital PPV environment.
Despite its association with the BET brand, the network has struggled to gain widespread distribution-even though most operators have the ability to offer more than five channels of PPV.
Viacom certainly didn't give the network a ringing endorsement when it passed on purchasing the service under the BET deal. That deal included all other BET Holdings networks, including BET on Jazz.
Industry executives believe the network's limited subscriber base and In Demand's dominance of the current PPV business-AT&T Broadband, Time Warner, Cox Communications Inc. and Comcast Corp. are owners of that service-has made the network less attractive to prospective buyers.
But operators who distribute Action support the service. The network's mix of action/adventure movies-such as The Silencer, RPM
and Dirty3rd-and adult-oriented programming generates respectable monthly buy-rates for affiliates, particularly in uban markets. Those genres typically deliver decent PPV buy-rates.
One East Coast affiliate who wished to remain anonymous said the service was a perfect complement to the more mainstream programming offered by In Demand.
"It was really doing well in an analog environment, but it will become less and less important as the industry moves toward digital," said one PPV operator. "Unfortunately, it has fallen behind the times."
A West Coast PPV executive also said the network provided strong, incremental revenue next to the multichannel In Demand services. The service also allowed the digitally upgraded system to retain an analog PPV channel that the executive now fears will be lost to a basic service.
"Not only would we lose a channel that generated incremental PPV revenue, we would not get the chance to replace that PPV revenue if we lost the channel," said the executive.
Symonds would not reveal the names of interested parties for the service. Sources said Viacom-owned Showtime Networks may be the lone contender-even though its parent company had passed on it earlier.
Showtime has teamed with Action to offer boxing matches televised via its flagship pay TV service simultaneously on PPV, in an effort to reach non-subscribers.
It would also provide Showtime's PPV arm, Showtime Event Television, with an alternative distribution outlet to In Demand. In the past, SET and In Demand have often butted heads over rate-card deals. SET could use the leverage of distribution via Action PPV in future negotiations.
Representatives from Showtime could not be reached for comment at press time.