As technology makes it easier and easier for us to be transported to different worlds without leaving our home, are we using our mobile device? Do we purchase goggles to step into augmented reality? Or, is television still the most powerful medium?
If there was any doubt as to how powerful television was and is, look no further than the presidential election of Donald J. Trump. How he rose to the top and won the election is a complicated issue, but when asked about him, many people reply, “He was on television, so that must mean he is important.” Our consumer market is driven by television and movie stars. It is still the goal of actors in the entertainment business to be on a television show or the set of a movie. Every night, millions of people sit down in front of their television to watch programs from the National Geographic channel to E! Network. Choose your preferred station of transport.
In sitting down with the founder of the E! Network, Larry Namer, I wanted to know how one starts a network. Where do you get the capital? How do you find investors? Who takes you seriously regarding your creativity?
Entertainment in all forms — live streaming, fake news, even reality shows — are being hit from all sides. Where does an executive turn to answer the call? Larry has so much to offer in terms of what really drives these markets, who has control now, and what you need to succeed. And, did I mention he is starting another network in China? These are the people who decide what worlds we get to explore.
What does it really take to start a network?
Investors? Vision? Platform and money?
In regard to what it takes to start a network, the answer is quite complex and quite different than it used to be. In the days before the internet and digital technology, starting a network meant a TV broadcast or cable network. These were designed to attract hundreds of thousands or millions of simultaneous viewers. There was no “on demand” which meant you had to program the network 24 hours a day, 7 days per week. That’s a lot of programing and a lot of technical infrastructure. To do that required tens of millions to start and eventually hundreds of millions before they could break even on a cash flow basis. Because of the incredible complexity and enormous costs, networks were generally started only by huge corporations. There have been a few exceptions to that where networks were started outside the big media world and those stories have become the stuff of Hollywood legend. E! is one and BET is another. Today there are hundreds and even thousands of entities that call themselves networks. What they are really are websites with video. They are Facebook live feeds. They get dozens of viewers which is a far cry from what we normally call a network, but people’s egos push them to claim they own and operate networks. Most of the time they disappear in a very short time since they have no desirable viewership that can be translated into revenue to help them sustain operations. Today, a network that is sustainable needs to have a clear content focus and it must transcend a single platform. You need a TV component, an internet component, a mobile component, a social media following, and e-commerce capability. You must serve passionate audiences in a modern way. That is, you need to give them the content they want when they want it (meaning on demand) and on the device they want it on. The days when networks were linear and had scheduled programs throughout the day is antiquated. No one cares when NBC wants me to watch a show. I watch it when I want. The viewer is now in control.
To start a real network these days, you have to consider the above and have a plan to fulfill the needs of the viewer. In most cases, this will take a fair amount of capital but by no means what it used to cost. A few million dollars will take most ideas to fruition, however they are not going to build the big franchise networks like in the old days. You won’t see any of those anymore. The trend will be downward in terms of the numbers of viewers as the inches of focus get smaller. That’s not to say they won’t be valuable and profitable, just total audience sizes will shrink.
The other thing that has changed and must be considered is that there is a globalization of content that digital technology has enabled. So if you are thinking of starting a network for horse lovers, you can aggregate horse lovers all over the world by their common interest. Same can be said for opera lovers. While these may not be popular to a U.S.-centric TV network, they certainly can provide passionate followers all over the world with much desired content. Advertisers looking to reach horse lovers may not have a clear way to reach them in the broadcast world; however the digital channel that is global would be an ideal way for them to target their potential customers.
So what I look for these days:
Is there an audience that is underserved by the existing media world?
Is this a passionate audience that has shown they will spend money on their passion?
Can I create or acquire the content in an economically feasible way?
Can I make this a goal audience vehicle?
Are sponsors going to see this as a very efficient way to reach potential customers?
Can I use social media to find this audience and attract them to the content?