Viacom Plans a Gay-Themed Mini-Pay

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Viacom Inc., encouraged by Showtime's success with the original series Queer as Folk,
will tread where others have failed by trying to launch a gay-themed cable network.

Skeptics predict an uphill battle, citing a lack of existing gay programming and the difficulties in launching any new network, especially a new "mini-pay" network.

Officials from Showtime and MTV Networks last week confirmed a TV Guide
report that said the two Viacom units are exploring the creation of a new hybrid digital network dedicated to programming for the gay and lesbian communities, which they called an untapped audience.

"The two companies are currently examining the potential and exploring distribution models and prospects as well as programming elements," the programmers said in a joint statement. "The combination of MTV Networks and Showtime brings unique access to distribution, expertise in creating original programming and a long track record of launching successful, new niche-television brands."

No launch date has been set, and the company is still nailing down its business plan, said Showtime Networks executive vice president of corporate strategy Mark Greenberg. The idea is for the gay network to be a hybrid, a mini-pay service that would also take advertising in the form of sponsorships.

Viacom will talk to cable operators about pricing for the service, Greenberg said, adding that research indicates gays would be willing to pay for it — possibly as much as $5 to $6 per month.

But a number of cable-industry insiders, including several former MSO officials, said Viacom's hurdles include finding a viable financial model for the network, securing enough compelling gay-oriented programming and convincing distributors to carry it.

"They [Showtime] have one gay show, Queer as Folk,"
said one veteran cable programmer, who is gay. "I get how that works for an hour. I don't see how it works as a network.

"There is a dearth of quality programming relating to gays. But Showtime will get press up the wazoo because people will say, 'This is an idea whose time has come.' "
Time Warner Cable spokesman Mike Luftman said, "We have not been approached yet about it, but we're always interested in considering new creative ideas for program networks."

The gay network's schedule would be a mix of "proprietary," original and licensed programming, according to Greenberg. "It's possible" repurposed Queer as Folk
episodes could run on it, he said.

Mini-pay services have had a spotty record, noted one former cable operator.

For example, services that started out as mini-pays offered à la carte — such as The Golf Channel and Sundance Channel — had trouble building distribution under that model and migrated away from it.

"It's a pretty dicey proposition, just from an economic view," the ex-cable operator said.

Noted a second ex-operator, "Mini-pays either melted down to ad-supported tiers or were grafted onto paid premium packages."

That's apparently why Viacom is also looking toward advertising support for its gay network. Stephanie Blackwood and Arthur Korant, partners in Double Platinum — a New York-based gay and lesbian marketing specialist that operates under the Chicago-based Bcom3 Group umbrella — said their clients would need to know many more details about programming.

It's no different than with a new print publication, where advertisers "would say, 'Show me your first issue,' " Blackwood said.

Past attempts to roll out gay cable channels, such as Lou Maletta's Gay Cable Network, Gay Entertainment Television and C1TV, have proved nettlesome.

C1TV had been buying local access time on major-market cable systems and airing a gay program block. It reached 7 million homes.

But Miami-based C1TV dropped that effort last year, and now is trying to build a library of gay-oriented programming and find a strategic partner to create a 24-hour gay network.

C1TV CEO Dave Sine said his network, founded by gay executives, has talked to Showtime, AOL Time Warner Inc., Rainbow Media Holdings Inc. and USA Networks Inc. Rainbow declined to comment, but sources said it has considered a gay network as one possibility for its Mag Rack video-on-demand service.

Consultant Joe Schramm, a cable-industry veteran who is also one of C1TV's advisers, said its strategy, like Viacom's, is to launch as a mini-pay service that would sell sponsorships. C1TV also wants to do some pay-per-view events.

Another gay-targeted mini-pay, The Triangle Television Network, is set to debut next month.

Unlike in prior years, Greenberg claims the time is right for a gay network. Today there is more channel capacity to accommodate new launches, and Viacom has the financial wherewithal and programming savvy to pull it off.

"If we're going to do it, we're going to do it right," he said. Jim Forkan contributed to this story

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