
This exciting cable expansion
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Claude Robinson Sunday, June 18, 2006
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With bragging rights to "the greatest show on earth" now on stage in Germany and the gritty performances of the West Indies against the touring Indian cricket team, the RJR Communications Group last week launched TVJ Sports Network (TVJ-SN), adding another dimension to the highly competitive media landscape.
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| Claude Robinson |
The launch of the newest local cable sports channel was obviously timed to benefit from the opportunities offered by the large number of major international sporting events now going on, especially World Cup Football.
Having a cable option allows TVJ to give viewers the choice of two 'live' events, Test cricket and football, or to repeat games throughout the day so that fans can get more than their belly-full, even if that means missing work or terminating spousal conversations for the time being.
But the move is also part of a regional and global trend towards niche marketing of television programming as traditional media entities adapt to the new realities created by the revolution in information and communication technologies.
These technologies have resulted in audiences having more and more choice, including the option of creating their own media right in the palm of their hands.
No longer at the mercy of the big traditional broadcasters, audiences can now pick from niche offerings in news, sport, culture, music, the arts, health, education, cooking, gardening, movies or whatever else catches their fancy.
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In Jamaica, there are at least 19 such 'specialist channels' available on cable, including Sportsmax, the first local 24-hour sports channel, against which TVJ-SN will be going head-to-head. While these cable stations proliferate, they only have a small share of the market and so the long-term survival of some of them must be in question.
A recent survey by Marketing Strategy Limited commissioned by TVJ showed that foreign cable combined had an average of 37 per cent of the market, rising to 40 per cent at weekend.
TVJ was next with 34 per cent followed fairly closely by CVM. But the local cable channels, together, had a combined market share of only 3-4 per cent, with the music and entertainment channels, Hype-TV and RETV as the market leaders followed by Sportsmax.
Many insiders believe that the long-standing ban on advertising on cable is partly responsible for the modest market share of cable channels, the argument being that owners are reluctant to invest in people and programme development unless they could reasonably expect to recover their investment from advertising revenue.
The ban has been in place for several years, partly to protect TV stations from unfair competition from cable operators whose revenue is secured by subscriptions. Despite intense lobbying by the Media Association of Jamaica (MAJ) to retain the ban, government announced last year that it would be lifted as part of a policy to encourage the development of indigenous, culturally relevant content.
However, the enabling legislation did not go through all its stages before Parliament was prorogued in March, as the Opposition said they needed more time to understand the concerns of the MAJ. It is not immediately clear when the new minister of information and development, Colin Campbell, will return to it, although the expectation is that the system will be formalised.
By establishing TVJ-SN, it appears that RJR, an active member of the MAJ, is following the adage, 'if you can't beat them, join them'. Assuming settlement of the advertising issue, a question remains about the ability of a relatively small market to support two 24-hour sports channels, especially in light of the high cost of rights for big ticket international sports, as well as for originating local content.
Oliver McIntosh, CEO of Sportsmax, which has extended its service to 15 Caribbean countries, didn't seem particularly worried about the competition when he spoke on Thursday just before turning our attention to the game between Trinidad and Tobago and England.
He says Sportsmax will continue to go after major international sports as surveys show that that's where the large audiences will gather. They will be adding more local content, but this part of the business has to be advertising-driven.
Gary Allen, who was last week appointed deputy managing director of the RJR Group in what is seen as a step towards succeeding Lester Spaulding as CEO within the next year or so, says TVJ-SN's strategy will be on local production around some of its existing brands such as Premier League football, horse racing, motor racing and other sports.
Carib Vision takes to the air, finally
Ironically, TVJ-SN came on stream at the same that the Barbados-based Caribbean Media Corporation (CMC) had its Jamaican launch of Carib Vision in Kingston on Wednesday.
Carib Vision, a satellite channel beamed at North America and the Caribbean, was launched in Barbados earlier this year. By July 30, Carib Vision will be in several more Caribbean territories including Trinidad and Tobago, Bahamas and St Lucia and by September 30 it will be available in the entire Caribbean region, CMC managers said at the Kingston launch Wednesday.
The channel is a joint venture between the CMC and two US firms, Sound View Marketing which will be responsible for operations and marketing the channel in the USA and Echo Star dish network which will distribute the channel to its satellite subscribers in the United States. Revenue will be from a combination of subscription and advertising.
In the Caribbean, the channel will be available on cable systems but it was not immediately clear what arrangements have been made with local cable providers in Jamaica. Colin Innis, chairman of JACCO, said Thursday that there had been no discussions yet between his organisation and the CMC, although he believed there had been talks with individual operators.
Content for the new channel will be provided by the CMC itself, which will produce original news and other content and by partner stations and independent producers in the region. The initial partner stations are CBC Barbados; TVJ, CVM and CPTC in Jamaica and CCN-TV6 in Trinidad and Tobago as well as independent producers.
For the most part, the partner stations will provide content already aired in their home markets but which would be new in other markets. For Gary Allen, the model makes sense: "Getting into the US market and earning some money" from programmes already created for the home market is a win-win and overshadows the risk from having a regional station competing for local advertising.
Carib Vision is clearly an opportunity for a Caribbean conversation among the people of the region and those in the Diaspora. Hence the model, if it works, should facilitate regional integration while encompassing a potentially large market with a sound advertising base.
For more than a decade, regional media houses that comprise the shareholding of the CMC have been talking about establishing a region-wide radio and TV station and a regional newspaper that would be distributed as a weekly insert in the editions of participating national newspapers.
Progress has largely been frustrated by conflicts of interest between the regional body and domestic broadcasters. A regional station could only survive if it were free to compete with its domestic 'owners' for advertising in their home markets.
As the issues remained unresolved new private sector entrants like Tempo Music, Entertainment Channel and Sportsmax have entered the market and have been making inroads into what used to be exclusive territory.
For example, Sportsmax has recently out-muscled CMC for the regional rights to major sporting events like international cricket and this sort of competition will only intensify in the years ahead. As we watch to see how Carib Vision unfolds we are reminded of the pioneering work of Jamaican businessman Delroy Cowan who created Caribbean Satellite Network (CSN) in the early 1990s operating out of Miami using Caribbean music as the main vehicle driving the programming.
Part of CSN's difficulty that led to its eventual closure was in getting space on cable systems. Getting the programming on satellite was only a small part of the story - the really hard part was to get it into the homes. We hope Carib Vision will not have the same experience.
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