VH1 Classic Gears for Launch

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MTV Networks next week will launch VH1 Classic, a digital network aimed at older baby boomers that will both air music and videos from the 1960s through the 1980s and pitch that affluent audience on the wonders of broadband and the Internet.

VH1 Classic, which will debut May 8, has been designed as a vehicle to whet viewer appetites for products such as high-speed modems and digital services. It will devote all of its ad inventory to get that message across, according to MTVN officials.

The campaign, dubbed, "VH1 Music Fast," will promote the sale of high-speed Internet access.

"VH1 Classic will be a showcase for broadband Internet content," VH1 president John Sykes said. "It's an ideal digital play."

VH1 Classic, with its "Jammin' Oldies-type" format, will replace VH1 Classic Rock on The Suite, MTVN's package of nine digital networks that premiered in the summer of 1998. The programmer is banking that VH1 Classic-because of its appeal to distributors as a marketing tool for broadband-will be a driver to help boost distribution for The Suite.

But some cable operators complained last week that VH1 Classic still doesn't solve their problems with The Suite, which they said are the digital package's costliness and the fact that it is being bundled with MTVN's core analog networks.

Sykes said he considers the debut of VH1 Classic "a launch, not a relaunch" or repositioning of VH1 Classic Rock, which has 1 million subscribers.

There are two major differences between the digital networks, according to officials.

First of all, VH1 Classic Rock-one of three VH1 spinoffs in The Suite-has strictly been airing rock videos. In contrast, VH1 Classic will air rock and rhythm-and-blues music videos; rock movies; concert footage of baby boomer favorites; and some library product from VH1.

The playlist will be a broad cross-section that will include hit artists such as The Beatles; Rolling Stones; The Temptations; Crosby, Stills, Nash and Young; The Who; Janis Joplin; Marvin Gaye; Michael Jackson; and Tina Turner.

"VH1 Classic will run music videos beginning with The Beatles and Beach Boys and ending with Bruce Springsteen and 'Born in the USA' and The Eagles and Hotel California,'" Sykes said. "There is a void now not only for classic rock, but for the old top-40 radio that played everything-rock, R & B and pop."

These are artists and videos that no longer play on VH1, as they have been replaced with current pop-music videos.

VH1 Classic is aimed at the older end of the baby boomer generation-those 45 to 55-who make up the fastest-growing group of Internet users. Baby boomers in general number 65 million to 70 million. "It's the upper end of the VH1 audience, 45 and above," Sykes said. "There is a real audience for this channel. It is not just to secure shelf space."

MTVN will be talking with distributors-both cable operators and direct-broadcast satellite companies-at the National Show in New Orleans next week.

All of the interstitial time on VH1 Classic will be dedicated to spots and promos describing Internet and broadband opportunities, according to MTVN senior vice president of affiliate sales and marketing Peter Low.

"These people are affluent," Low said, "and they're the first to move on digital and broadband. It's a powerfully easy message to communicate. And we think we can do it extremely creatively."

For example, some of the interstitials will promote VH1 Classic's own Web site, which will be a showcase for broadband content and download opportunities, perhaps sparking a viewer's desire to get a high-speed modem to best take advantage of that.

Other VH1 Classic interstitial spots will "promote the excitement of music on the Web," according to Low.

"There are 10,000 music Web sites out there," he said. "There is huge enthusiasm about music being available on them."

MTVN will also be willing to work with cable operators to make these interstitials more localized to a system or an MSO. "We're coming out the gate with our own creative, as a turnkey [service] for distributors," Low said. "But if they want to make it local and co-brand it, we will talk to them about that."

The Suite has three spinoffs or related services each from VH1, Nickelodeon and MTV: Music Television. The three VH1 spinoffs are VH1 Soul, VH1 Country and VH1 Classic Rock, until the latter is switched out for VH1 Classic.

Out of its nine networks, The Suite has counted educational kids' channel Noggin and MTV2 as two of its main anchors. Now VH1 Classic will be the third one.

Part of The Suite is carried on AT & T Corp.'s digital platform, Headend in the Sky, but the digital package has faced a long uphill battle to get carriage. Officials said The Suite reaches 4.5 million homes, but that number includes Noggin, which has analog subscribers that the rest of the digital Suite services don't have.

MTVN charges a monthly license fee of 38 cents per subscriber for The Suite, according to Low. But several operators said that rate is predicated on carriage of all nine networks, and that the rate card to carry just one or two of those channels is expensive. For example, it's pricey if a cable system just wanted to carry the kids'- oriented digital networks.

"The problem with The Suite is the pricing," Classic Cable Inc. executive vice president of operations Ron Martin said.

Both Martin and Frank Hughes, senior vice president of programming for the National Cable Television Cooperative, also pointed out that the license fees for The Suite escalate if an operator isn't carrying MTV, VH1 and Nickelodeon widely on analog. And that condition is a problem for smaller and rural cable systems, since many don't carry MTV, Martin and Hughes said.

That's why the NCTC is still talking about a carriage deal for The Suite, but it has yet to reach one, according to Hughes. The Suite's rate card is also extremely complicated, he added.

Both Martin and Hughes said they and their companies have been in ongoing talks with MTVN about The Suite.

At Insight Communications Co.'s system in Columbus, Ohio, general manager Gregg Graff carries The Suite on digital, and he said his system is just about to launch high-speed-modem service, so he welcomed VH1 Classic's plan to promote such offerings.

But he questioned whether subscribers would really notice the change in programming from VH1 Classic Rock to VH1 Classic.

According to Low, those baby boomers will connect with VH1 Classic.

"We have brands that really resonate among those in this audience," he said. "[Distributors] can use the resonance of these brands to drive both their digital business and their high-speed-modem business."

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