Religious Nets Set Sights on Odyssey

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While some cable operators and ad-agency executives are
still pondering whether Odyssey Channel's relaunch as a broad-based family network in
April was a good idea, some religious and inspirational networks saw it as a chance to
turn up the volume on their own marketing pitches and to gain carriage with MSOs.

Most of those networks said their messages haven't
necessarily changed, but they did see a brief window of opportunity to pitch operators
that may now feel that their religious audience is underserved as a result of Odyssey's
switch.

In its new incarnation, Odyssey -- officially Odyssey, A
Hallmark & Henson Network, now that Hallmark Entertainment and The Jim Henson Co.
collectively own 45 percent -- now targets adults 18 through 55, and it has scaled back
its religious and spiritual programming to 40 hours per week.

As a result, some operators have switched out the network,
believing that they already have enough family programming.

At 610,000-subscriber Cox Communications Inc.'s Phoenix
system, spokesman Alex Horwitz said demand for Odyssey had been waning. Because Cox must
air Paxson Communications Corp.'s Pax TV as a must-carry anyway, it believed its
family-programming needs were being sufficiently served, so it removed Odyssey (which was
known as Faith & Values Channel until September 1996) late last year.

"The demand for Odyssey just wasn't there, and it
hadn't been for a while," Horwitz said. "We switched it out to make room for
Travel Channel, which our customers wanted. The ratings for Odyssey simply weren't strong
enough for us to keep it."

Buford Television in Tyler, Texas, made the same decision.
The 175,000-subscriber MSO had 40,000 Odyssey subscribers, and it switched out 30,000 of
them.

But Buford executive vice president and chief operating
officer Ron Martin said the MSO might be persuaded to relaunch the network after it
reviews its new programming lineup.

"As [Odyssey] moved toward secular programming, we
didn't feel like we were providing our customers with what they had asked for in terms of
religious programs," he said. "So we did a significant switch-out to [INSP-The]
Inspirational Network and some TBN [Trinity Broadcasting Network]. But since then, we've
been presented with Odyssey's programming for this fall, and it's a product we'll take a
look at relaunching."

So what have inspirational and religious -- mainly
Christian-oriented -- networks been doing to try to exploit the shift by Odyssey, which
had about 29 million subscribers and key backing from Tele-Communications Inc.'s (now
AT&T Broadband & Internet Services) Liberty Media Group?

INSP, Eternal Word Television Network, TBN and Z Music
Television said their pitches haven't necessarily wavered -- they're just finding more
open ears from MSOs.

LEVERAGING

DBS CARRIAGE

TBN vice president of sales and marketing Bob Higley said a
particularly persuasive message the company is using in its presentations is letting cable
operators know that every direct-broadcast satellite company now carries the network.

Once cable companies hear that their competition is
carrying TBN, he said, they take the presentation much more seriously.

"Initially, we went to DBS companies with the same
sales pitch we're now giving MSOs," he said, "but we weren't getting approval.
What happened later is that they began hearing that satellite dealers couldn't sell their
systems to customers who were interested in religion. When these customers went to buy
dishes and found out that TBN wasn't on it, they didn't sign up. They told the dealers
that when they added TBN, they would buy, and eventually, this filtered back to
headquarters."

TBN, which claims about 41 million subscribers, said it has
added at least 200,000 since Odyssey's changeover, and it has commitments for about 1
million additional digital homes.

In its first year on DBS, TBN was carried exclusively by
EchoStar Communications Corp.'s Dish Network. On the very day when TBN's exclusivity with
Dish ended, Higley said, PrimeStar Inc. and DirecTV Inc. picked it up.

"In our presentations to MSOs, we tell them about all
of the research that says what pastors and consumers want, but they hear this from every
programmer," he said. "When we get to the point in the presentation where we say
that all three DBS networks have picked up TBN, the MSOs become very interested. What we
say is, 'Your customers want a 24-hour faith channel, and DBS is aware of this.' That's
our message."

John Roos, vice president of marketing at 12.5
million-subscriber INSP, also stresses the importance of having a faith channel to MSOs,
even though the religious marketplace isn't necessarily a lucrative one in terms of
advertising. "That's what the people at Odyssey found," Roos said.

In INSP's presentations, he said, the company
"accentuates the degree to which we serve the religious marketplace. We've stressed
this in the past, and we're just trying to say it stronger now. It's a market that still
exists -- the needs are still there. Just because others are changing doesn't mean that
it's not a market that needs to be served."

Yet in the case of 6 million-subscriber Z Music, Odyssey's
switch has actually strengthened the network's position in the market, according to
manager of marketing Jim Schwan.

He agreed that consumers had a need for a 24-hour faith
channel, but they also seek out positive programming, such as Touched by an Angel,
which is more inspirational than religious.

'NO PREACHING

ON OUR NET'

"There's a groundswell of people searching out
positive programming," Schwan added, noting that Z Music falls into this category.
"We consider ourselves a music or entertainment service more than religious. There's
no preaching on our network, but there's certainly an inspirational feel."

Because the Christian-music industry has "grown
up," he said, the overall quality of the music has improved since the early days of
Christian pop songs.

"For a long time, it was about the message -- now it's
about the music," he added. "Odyssey's change strengthens what Z Music
Television is doing. Plus we offer an alternative to extremely sexual or violent videos.
No one ever asks to have Z Music Television blocked."

Schwan said part of Z Music's pitch is letting MSOs know
just how large the Christian-music audience is. While it may not be very visible in the
mainstream, he noted that fans purchased 44 million Christian-music-concert tickets last
year. And that, he added, can create a lot of cross-promotional opportunities in local
markets.

"These acts tour all of the time," he said.
"This means that when they come into town, we can do a concert promotion and an
in-store at the local Christian bookstore, and that can create an advertising opportunity
for local cable operators. Christian bookstores exist in every market, and selling
advertising to them is a revenue stream that cable operators may have overlooked."

Roos agreed: "We work with operators at local events,
doing local insertions," he said. "We have many ways of helping them at the
local level. We're all cable people -- it's our lifeblood, and we understand what goes on
in MSOs' minds."

He added that one way INSP positions itself is to make
comparisons that operators can relate to.

"If you try to serve those who want sports, you have a
sports channel," he said. "Lifetime [Television] used to do many things, but now
it's a women's channel. The natural evolution of channels is to clarify your position.
We're the Inspirational Network. There is a marketplace for people who want this."

He continued, "Since we launched in 1990, we have had
the consistent belief that an inspirational network is needed by the cable industry, and
that's what we've sought to provide."

NO EFFECT

ON DIGITAL PUSH

At EWTN, Odyssey's change has had little, if any, effect on
the network's marketing pitch, as it sees its future in the digital arena and
international markets.

The programmer -- which bills itself as the "Global
Catholic Network," claiming 55 million subscribers worldwide -- recently made
available in the United States its Latin American television network, which runs 24-hour
religious programming from all over that region.

"In the broader picture, Odyssey's change isn't
important as far as EWTN is concerned," vice president of marketing Chris Wegemer
said. "Any short-term benefits from Odyssey's switch pales in comparison with our
future growth in digital and international. Odyssey's switch is a temporary window of
opportunity, not a fundamental change in how we market ourselves."

Wegemer continued, "Our focal point is how to take
advantage of digital and international opportunities. Since the expansion of channel
capacity will be digital, we're working to be part of digital offerings wherever possible.
But in terms of marketing, there will be no change in how we'll position ourselves in the
industry long-term."

Higley agreed: "We've been trucking along with the
same message for a long time," he said. "We're multidenominational, but the
evangelical group represents one-half of the denominations in America -- they eat, sleep
and drink Christianity. We're tapped into this core religious audience."

EWTN, of course, is tapped into the Catholic audience,
which tallies about 60 million, according to Wegemer. Interestingly, he said, the network
is being picked up by more MSOs, but not at Odyssey's expense.

"Because there are 60 million Catholics, system
managers are willing to set aside a channel for us, another for Trinity and another for
Inspirational," he said. "For those cable systems that only had Odyssey, they're
willing to add us to address the needs of their community, because they see us as
different. Plus, 60 million warrants carriage."

NOT A

ZERO-SUM GAME

Higley preached network coexistence, as well. "We're
not advocating that you drop Odyssey," he said. "It's just that this might be a
time when your religious viewers might be frustrated, and they could switch to your
competition -- DBS. We tell MSOs, 'Don't allow your religious subscribers to do that. Add
TBN to avert them switching to satellite.'"

He pointed to the network's new programming as another
incentive for carriage. "Not only do we bring MSOs leading church services -- a
Sunday's lineup of who's who -- but we're also offering inspirational movies and exclusive
programming." TBN is currently filming a $7 million production starring Michael York.

According to Odyssey, the change in programming has
resulted in a loss of some subscribers, but a gain of others, keeping it at 29 million
subscribers.

CEO Margaret Loesch said the company is making an
aggressive effort to inform MSOs that it has not abandoned its commitment to faith
programming -- it has simply expanded its scope in a way viewers want.

Loesch pointed to research from USA Today, which
noted that 80 percent of men and women rated family as their No. 1 priority. After that,
77 percent of women and 64 percent of men rated growing spirituality as their
second-highest priority.

"When people ask me if we are a faith channel or a
family channel, I say we're both, and that's a new idea that's hard to define," she
said. "But we're trying to be relevant to today's family, which can be a mom and
kids, or a dad and kids, or a same-gender couple with kids, or a couple with no kids. What
we're trying to do with our new programming is to really relate to these people."

Loesch added: "They want quality programming where
they don't have to ask their kids to leave the room. But they're also interested in
spirituality -- in how to make themselves more complete. They're interested in hope and
love and justice, and the issues raised by each. We really believe we're ahead of the
curve by combining a lot of different elements in our programming. It's what the research
says people want."

She said the new incarnation of Odyssey happened when the
National Interfaith Cable Coalition went looking for a partner and approached Hallmark and
Henson. Loesch said that at first, she "recoiled" at the idea of such a
partnership, as her impression of religious channels were "those guys who tell you to
convert."

However, she added, she learned that Odyssey was founded
"in reaction to the Jim Bakkers and Jimmy Swaggerts," in hopes of redefining
religion in a viewer-friendly way.

"We still represent the largest interfaith group in
the world -- more than 80 religions," she said. "We still run 30 hours per week
of faith-specific programs, but now, we're adding entertainment programs that explore the
human condition. We'll develop shows that are spiritual in nature and not
faith-specific."

GETTING THE

MESSAGE OUT

The challenge now, of course, is for Odyssey to get its
message out to MSOs. Loesch realized that cable operators perceive Odyssey's change as an
abandonment of religion, yet when they hear the company's presentation, they often
relaunch the network, as is currently being planned by Buford.

"By the end of our meeting, they get it and are
supportive," Loesch said. "We're getting a great response from MSOs and from the
public. We're the only network that's truly interfaith."

So what are MSOs doing to meet the religious needs of their
viewers in the wake of Odyssey's change?

Horwitz said Cox Phoenix airs EWTN seven days per week, for
10 hours per day Monday through Friday and nine hours per day on weekends. It also carries
EPAZ -- which features programming such as PTL -- Praise the Lord -- 24 hours per
day, seven days per week. And it has a leased-access channel with Jimmy Swaggert.

"We're constantly re-evaluating our programming lineup
and ways to improve it," Horwitz said. "Right now, we feel that our religious
customers' needs are being met."

At Buford, Odyssey may find its way back into the fold.
"When we switched them out, we had capacity issues," Martin said, "and I
scrambled to make sure religious-programming needs were met. Between Inspirational Network
and Trinity, we believe we have the religious market covered. But the family category that
Odyssey is attempting to cover has some potential. You can't have enough good family
programming, so we'll look at them again."

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