Company Town : New Networks Struggle to Find Niche

Not long ago, the Big Three broadcast networks liked to boast that they were “programming supermarkets” with something for everyone: mainstream prime-time comedies and dramas, news, sports, cartoons for kids, soap operas for housewives and late-night talk shows for insomniacs.

But the concept of providing all things to all viewers is going the way of Mayberry: It represents a quaint and nostalgic view of TV’s uncomplicated past. In its place has come niche programming--the progeny of an industry that may soon have more airspace than ideas.

With channel expansion on the way, cable TV operators and entrepreneurs are scrambling to find creative ways to fill the void and overcome obstacles to success. In this brave new world of programming, no concept seems too trivial. Indeed, cable TV programming may look like the newsstand magazine rack of the future as “niche networks” spill onto the channel pipeline.

By definition, a niche network is a cable channel whose programming is so narrow in appeal that it may attract only a few hundred thousand viewers, or at the most a couple of million--similar to the readership that highly targeted specialty magazines reach. In a sense, CNN and MTV are niche networks because of their focus on a narrow slice of the TV audience.

In recent years, the focus of cable networks has become more and more niche-oriented, as they seek to appeal to viewers with singular interests. E! Entertainment Network is targeted to viewers obsessed with the entertainment world--the company recently signed a deal to videotape the radio broadcasts of shock jock Howard Stern, for example--while the History Channel is designed to attract a core audience of history buffs.

Indeed, no concept appears too parochial for a cable TV network in development.

At last month’s cable TV convention in New Orleans, more than 100 new cable networks jostled frantically to get off the ground. The convention floor was jammed with hopefuls such as the Arts & Antique Network, the Auto Channel (which would compete with Automotive Television Network), Booknet, Cable Health Club, Cupid Network TV (home shopping for “adult novelty love and romance products”), Fitness Interactive, the Talk Channel, Television Food Network--not to mention the Arts & Crafts Needle Network.

The advent of niche networks made possible by the expected expansion of channel space on local cable TV systems in the coming years was an important reason that Times Mirror Co. and Cox Cable Communications Inc. formed a $300-million joint venture Monday to develop programming and other services for the information superhighway.

The joint venture, which was part of Times Mirror’s $2.3-billion sale of its cable TV division to Cox Cable parent Cox Enterprises Inc., will first try to launch the Outdoor Life Channel, a new cable network inspired by such Times Mirror-owned magazines as Outdoor Life and Field & Stream.

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Despite the well-heeled venture and the overall level of interest in niche networks, it is far from the best time to launch such projects. Besides the high cost of starting a new network, there are also regulatory and technical obstacles. Some suggest that only the most well-established players will survive.

“This has been the worst year ever,” sighs Jay Levin, president of Planet Central, a Santa Monica-based aspiring cable TV channel that will focus on the environment. Levin, the founder of L.A. Weekly, has been working on his cable TV network for more than two years and thinks that no more than two dozen of the 100 or so new networks will ever get off the ground.

For starters, launching a new cable network can run from $15 million to $75 million in losses before turning a profit, making inability to raise capital a major obstacle. In addition, cable TV regulations discourage operators from adding new networks to subscribers’ basic service, making it tougher to gain wide distribution necessary to attract advertising.

That leaves cable system operators with little choice but to introduce new networks “a la carte,” meaning the subscriber pays an additional fee--usually between $1.50 and $3 a month--to subscribe to the network. The problem is that many cable systems are not yet technically capable of passing along the charges.

If only two dozen or so niche networks survive the shakeout, what will appear on the other 475 or so channels? Most of the extra channel space carved out by digital compression will be given over to pay-per-view movie channels, video games and home shopping.

Actually, the notion of 500-channel cable TV systems is something of a misnomer. The idea of a “channel,” in fact, is expected to vanish. Instead, cable TV viewers will be able to select what they want to watch with the help of an on-screen navigation system that will point the way to clicking on the show or network they want to watch “on demand.”

That’s important because many of the so-called niche networks won’t be networks as viewers typically understand them today, where the programming is continuously fed through cable lines and over the airwaves. Instead it will be digitally stored and might change at given intervals--similar to the way a new magazine arrives every week or month.

But proliferation of the new channels and networks doesn’t necessarily mean gripping television. And that in itself may prevent many of the niche networks from going forward.

“A lot of them don’t deserve to get anointed,” Levin said. “They are really boring.”