Rainbow Media Holdings Inc. is exploring ways to use its stable of regional analog networks-the five News 12 channels and three MetroChannels-to create unique local content for the digital platform Cablevision Systems Corp. will debut next year.
For example, "hyperlocal" extensions of the News 12 local-news networks are expected to be part of Cablevision's digital offering. Rainbow is looking to make community news, boiled down to the ZIP code level available on-demand to subscribers.
"Microchannels"-which would feature on-demand content on such topics as Big Apple-area music events and entertainment-will also be in Cablevision's digital mix. These microchannels, or "video magazines," would be VOD offerings on subscribers' areas of passion-such as music, style, fashion and restaurants-all topics also covered by the MetroChannels.
Cablevision-which, along with NBC, owns Rainbow-will conduct a digital trial in Long Island in December and January, employing "several thousand" Sony Corp. digital set-top boxes. Full-scale deployment of the boxes to the MSO's 2.8 million New York metro subscribers is expected to begin in the second quarter of next year.
Cablevision claims its digital product will be much different, and more advanced, than what's offered by other MSOs.
"Suffice it to say, the [digital] products starting off will be robust," Cablevision president and CEO James Dolan told stock analysts earlier this month.
Cablevision's digital will include real-time video-on-demand capabilities, electronic mail and interactive-advertising functions, and would allow customers to see select content from Cablevision's New York-centric programming properties, such as News 12 and Metro.
"What we're deploying is not what is being deployed by other cable operators at this time," Dolan said. "This is a significant technological leap over what we have been seeing so far."
Greg Moyer, Rainbow's president of regional programming, is creating local content for the digital platform. His mandate: to adapt the analog programming services under his purview for digital.
In effect, he will spin off content from the local-news channels, News 12, and the MetroChannels that are suitable for the interactivity digital set-tops will make possible.
The areas Moyer is exploring cover a wide range of on-demand entertainment and informational genres.
"One of the things you will be able to do is recall content much like when you're on a Web site," he said. "You can make a lot of choices about sorting the content so you get what you want, and not what you're given, because it's part of the flow, because it's coming at you via a full-time channel."
The News 12 and Metro channels will give Cablevision's digital platform an edge, according to Moyer.
"We're trying to extend the franchise of our proprietary content into the interactive zone," he said. "All these regional channels with cable-exclusive products were first and foremost envisioned as a way of providing something of value to the cable customer that they couldn't get from other providers of multichannel television.
"But what's exciting about the opportunity within Cablevision is that the channels have become a place where we can introduce and sort of evangelize about interactivity. We take that responsibility quite seriously. I want to make sure we use our MetroChannels as a way of ushering in the digital age."
In addition to developing local content for Cablevision's digital platform, Moyer is also in charge of the effort to use the MSO's metropolitan New York cluster as a media lab to experiment with interactive advertising.
Moyer has a lot to work with. Rainbow invented the 24-hour local-news channel concept, and now has five that serve Long Island, New Jersey, Connecticut, Westchester and the Bronx. The three Metro channels are the core Metro service, which offers entertainment and lifestyle information, Metro Traffic & Weather, and Metro Learning.
News12.com's current major initiative is creating "hyperlocal" news, or boiling information down to the ZIP code level for subscribers, Moyer said. Content could include local school sports, library board meetings, town events and festivals.
Rainbow will first test the hyperlocal concept with its Long Island subscribers, via the Web. Once costs are determined, it will expand the initiative to the other News 12 channels.
"We're piloting this out in Long Island," where it will launch Dec. 4, he said. "We're building a staff in Long Island to really take on journalism at the community level."
Rainbow is also creating an on-air ticker, in a display bar, that will direct subscribers to the Web site for the more detailed local information. It will bow in the first quarter of next year, Moyer said.
"We will operate at this level for six to eight months, before we decide how we can roll it out across the region," he said.
The Web initiative is a test bed for what will occur after Cablevision's digital set-tops are deployed. At that point, hyperlocal news could be made available to digital subscribers on-demand, with full-motion video and audio.
Rainbow now is using the Web as a surrogate for the interactivity that the digital boxes will make possible, according to Moyer.
"We're using the Web as an incubator," he said. "Clearly, this is a precursor to doing all this through digital set-tops on TV."
Collecting community news for dozens of municipalities, for use on the Web and eventually for on-demand television, is no small undertaking.
"It's not a modest endeavor, believe me," Moyer said. "Editors will be assigned to monitor communities, almost like weekly newspapers, who are looking at things down to the library board meetings.
"What we have to really experiment with, and this is a challenge for a journalistic organization, [is] how to develop user-generated content that we can incorporate into the Web site. We do not want amateur journalists to be confused with the professional news product of News 12, but recognize these sites need to have content areas that are supported by the public or interested people. Otherwise, we'll go broke if we publish all these weekly papers, if you will."
The plan is to organize stringers and community contacts to help gather all the local information that News 12 needs, according to Moyer. Rainbow would like to generate local content, for example, by creating a community forum so citizens can debate the issues.
Eventually Rainbow would like the public "to author content" for the hyperlocal web and digital platform, Moyer said.
"It won't be that long before someone can take video of a high-school basketball game and go home get on an Apple Imac, edit five minutes of tape and get it posted on a Cablevision server under Chappaqua high-school sports," Moyer said. "Then others will be able to recover that video and watch it. We're looking into the technology that will allow the public access to our servers-under ground rules we'll have to determine-to be able to post content."
In adapting the MetroChannels to digital, Rainbow is experimenting with what Moyer calls "microchannels." They would make local content on a variety of entertainment and lifestyle topics available on-demand.
These microchannels would be on a file server, their content available 24 hours a day but not necessarily updated daily, according to Moyer.
"They are each a repository of content around a specific content area that you can call up on demand," he said. "It's a VOD, on-demand video experience. They're not channels, but they can almost be like publishing mastheads.
"It's really a magazine model. You have monthly magazines and you have some daily newspapers. We would start with dozens, and grow to many, many dozens."
Rainbow is considering devoting microchannels to topics such as music, fashion, food, restaurants and style.
"Essentially, I'm becoming CondéNast," Moyer said. "I'm picking those same kind of categories that represent entertainment/lifestyle/leisure-time pursuits. And I'm going to start building little video magazines that will be available in a VOD experience and it all will relate back to the broad Metro brand."
The microchannels should provide in-depth content on subscribers' "areas of passion, of affinity," according to Moyer.
"Metro is all about looking for how people choose to spend their leisure time and how people choose to satisfy their curiosity for entertainment enrichment," he said.
In the New York City region, music is a natural for micro channels, Moyer added.
"There are people who are passionate about opera in this town, and grunge," he said. "It's the capital of jazz. New York is such a rich palette from which to work.
"We will then create micro channels where there is some video content, some text content, updated as the channels require. Some will be updated daily, some weekly, some monthly."
For example, one micro channel could provide a weekly look at the New York jazz scene, complete with listings of upcoming concerts and profiles of artists.
"We could say, 'Here are the people that we're celebrating this month,'" Moyer said. " 'Here is the 100th anniversary of Duke Ellington's birth; here is a classic series of Duke Ellington concerts. Two are free. Four you pay for, 'whatever the deal is. So we're going to put these offers out to people and begin to try to get people to connect back through these channels to what their passion is."
The core analog MetroChannel, which offers original regional lifestyle and entertainment programming as well as off-network series, plans to launch a new signature daily show in March.
'New York central'
The new daily show, with the working title
is a joint venture with
magazine that will also include a Web site. It will also act as a barker for the micro channels.
"It's one of the biggest programming pieces that needs to fall into place to begin to solidify the Metro brand," Moyer said. "This is the show that will define who we are and what we are on a day-to-day basis.
"It will be sort of our
SportsCenter, a show that you come back to each day to find out what's happened in the last 24 hours in the most interesting and bizarre city in the world. It's entertainment and lifestyle news and information. It's definitely not a rehash of our News 12 or New York 1."
The new daily show-with different editions probably airing three times a day-is valuable because Rainbow will be able use it to promote selected features from its micro channels on-air, such as Ellington's birthday, Moyer said.
"We can say that's available on our micro channel, here is a snip of what's over there."
Rainbow also plans to create traffic and weather micro channels.
"We think they will get very heavy use," Moyer said. "They will be very dynamic, with information changing every 10 minutes."
The price structure of these microchannels, and the extent to which they will be included as part of Cablevision's digital service or priced as pay-per-view offerings, remains to be determined, according to Moyer. Many options are being considered.
"For a lot of this interactivity, there will be a level one interactive experience that should probably be free, to just get people to try it," he said. "Now, if they want to dive into level two, three or four, we may end up putting up a toll gate in front of that, or there might be a monthly subscription. It probably will depend on the rights situation of whatever we're offering.
"If we have a fancy concert, it may be pay-per-use. If it's something that doesn't carry those kinds of rights, and we have advertisers supporting it, they're probably anxious to give it away for free to get as many people to watch as possible. A lot will depend on the type of content we have."
Moyer acknowledged that he and Rainbow don't have all the answers yet.
"The whole thing is a laboratory," he said. "We don't know what the public's going to say or what combination of offer and financial instruments we can use to recover some of our investments. That's all going to be trial and error."
Moyer expects some micro channels or hyper-local News 12 offerings to be in place when Cablevision's digital rollout starts next year.
"Some aspects of all of these technologies will be available," he said. "I don't think anyone believes that come the first rollout, in mid-year 2001, we're going to have it all figured out. We're still going to be very much in a design mode for years to come as this thing begins to grow. You can't launch it perfectly."
Moyer's other mandate is to work with sponsors on interactive-advertising opportunities on Cablevision's digital platform.
There are two aspects to interactive advertising: real-time interactivity, in which an icon pops up on the TV screen prompting a viewer to ask for a coupon or information, and server-based applications, in which video is stored until a viewer queries for it and requests it.
"What we really need to do is figure out new models and give advertisers new opportunities to see how they can play in this interactive space that's getting created," Moyer said. "We're moving from a period where mass media was dominated by ambush advertising, where essentially an advertiser was given eyeballs delivered by programming. So essentially, the eyeballs were ambushed in the middle of a story and said, 'You've got to watch this ad to see the rest of the story.' It's been a very effective model for 50-plus years."
Interactivity offers the option of "affinity marketing," or sponsoring content that attracts a self-selected audience, Moyer said.
"We'll be exploring the creation of microchannels that can carry title sponsorships from advertisers, to features within a micro channel that can be sponsored and carry that advertiser's identity along with it," he said. "It's certainly conceivable that some advertisers will help us generate content that will almost stand alone as microchannels.
"It's not unconceivable to me that one of the next generations of movie promotions will be movie companies going beyond the trailer and actually taking something from behind the scenes, made into a how-we-did-it documentary, and coming out with a microchannel experience that they may want us to put on our servers to alert people to a new Matt Damon film, whatever it is."
There is also the potential for transactional sales and home shopping, according to Moyer. If a viewer hits an on-screen icon to get more information on a product, that makes him or her a qualified lead, he said. And advertising that generates real leads can command higher CPMs [cost per thousand].
Advertisers may also be interested in buying access, and a prominent place, on Cablevision's digital platform, for use and exposure in portals and gateways.
"Look how AOL [America Online Inc.] turned some pretty amazing deals," Moyer said. "They generate traffic to their home page and so, to become the preferred travel button on that home page, people are willing to spend money to be in that position."
Cablevision and Rainbow could give its business partners preferred access to their digital platform, according to Moyer.
"We don't know how we'll do it, but AOL is the best real-world example," he said. "It's certainly a lot more than just about banner advertising. It's more about becoming part of a collection of service providers who have unique access or preferred access to our platform."
Retail tie-ins Interactivity offers a wide variety of possibilities in terms of electronic commerce, not only with advertisers but with other Cablevision holdings, such as the consumer-electronics retail chain The Wiz.
"We have the advantage, within the Cablevision family, having a number of complimentary businesses, so we have the potential to do some of the back-end transactions," Moyer said. "And we have some knowledge of how to move products off of real store shelves. Now it becomes a matter of how to move product off virtual store shelves."
Next year, Metro and The Wiz will cooperate on a music initiative, Moyer said.
"We have the infrastructure to sell the CDs," Moyer said. "We have the relationships with the record companies. So it makes it a whole lot more interesting, given the various family businesses that are all under the Cablevision umbrella."
Moyer said Rainbow's regional networks have three goals: to add something of real value to Cablevision's digital platform; evangelize about the capabilities of interactive TV; and help offset the MSO's interactive investment through advertising partnerships.
"Part of our job is to find genuinely interesting programming ways to incent people to test and try interactivity," Moyer said. "And if I can soften up some of the technophobes who say, 'Gee, that wasn't so tough. Maybe I can go that way when they offer me another opportunity to use interactivity. 'Then I'll have also accomplished a valuable goal for Cablevision.
"If we can earn a few dollars in the process [of] doing it, I'm sure it will be much appreciated."
Mike Farrell contributed to this story.