A new, digital network targeted to generations 'X' and 'Y' is set to bow this week with the promise of no network-licensing fees.
The upstart, privately owned XY.TV will offer reality-based programming to elusive 12-to-34-year-old viewers, according to XY.TV founder, president and CEO John Garabedian.
"As a service for cable and DBS, we are a product that has arrived to fulfill a niche that is not being served," Garabedian said. "It's a lifestyle/entertainment channel that connects them in a very authentic, real way with their generation."
He pointed to a recent Magna Global study that found only five channels with a median viewing age under 30 years old: Fuse, MTV: Music Television, Black Entertainment Television, Nickelodeon and Comedy Central.
"A 57-year-old woman has 200 channels that she can choose from that one way or another suit her interest," he said. "But a 20-year-old doesn't, and they are the most important consumers in America."
To operators, XY.TV's main calling card is free carriage, according to Garabedian. Rather than depend on affiliate licensing fees, the network is confident that it can support itself financially via ad-sales revenue.
"The idea of paying programming fees to an ad-supported network is absurd," Garabedian said. "It's something that's a relic of the '70s and '80s."
Once the network turns a profit, it will share a portion of the ad dollars with distributors, according to network consultant Dennis Patton.
"Once we generate positive operating margins, we'll look to split up to 50% of [ad revenues] to charter affiliates," he said. "Over time, not only do they not pay, but they will be able to generate revenue from carriage of the network."
The network was slated to launch on RCN Corp.'s Boston system Dec. 15, and Patton said that carriage negotiations are taking place with major MSOs. Patton said the network hopes to be in front of 3 million subscribers by the end of 2004.
While the network figures to skew more female, it will feature original, reality-oriented programming on topics, Garabedian said, that are relevant to all young adults, including dating, education, style, drugs, trends and marriage. Shows include Common Ave., which seeks out responses to common issues from ordinary people; Dinner, a roundtable discussion of issues over a meal; and The Roomies, a The Real World-type series that places five young strangers in a house.
Garabedian, a longtime radio DJ, will get some on-air exposure with a music-driven Saturday night series, Open House Party. Beyond a few shows, though, Garabedian said the network will not feature a heavy dose of music-video programming.
"When you show videos, all you're offering is programming without a beginning, middle or end," he said. "There's no reason [for the viewer] to stay with the network."