Date: Feature Week of January 26, 2003
Topic: Black Press Business/Economic
Author: William Reed
Article ID: article_ema012603a
BROADCASTER PARTNERS TO PROVIDE NEW BLACK CABLE NETWORK
Will You Have Radio One and Comcast's Venture In Your House?
An African-American mother and son team has parlayed their interest
and involvement in Black culture toward becoming the most dominant force
in delivery of information to this group. Cathy Hughes, and her son
Alfred Liggins III, who already own the nation's 7th largest broadcasting
network, is creating a new cable channel aimed at African Americans.
The network, which will carry 24 hours of entertainment, news, opinion
and sports programming, is a venture between their Lanham, MD-based
Radio One, Inc. and the nation's largest cable provider - Philadelphia-based
Comcast Corp.
The companies say they expect to launch the network, yet to be named,
by the middle of this year. It's designed to mainly appeal to Black
viewers 25 to 54 years old. The companies say they have the resources
to bring the station to the air by Summer 2003. Typically, cable networks
launch in summer when television networks are showing reruns. Liggins
says Radio One plans to pay up to $70 million over the next four years
to start the channel. Comcast, along with three other investors, plans
to invest up to $60 million. While the companies don't say when they
expect to break even, channels usually become successful when they reach
between 20 million and 25 million subscribers. New channels usually
require about $125 million in capital and a reach of about 50 million
homes before turning a profit.
The new channel could be an aggressive competitor to Black Entertainment
Television, which so far has only faced competition from low-budget
regional channels targeting black viewers. A national Black cable network
launched by New Urban Entertainment (NUE-TV) has shut down operations.
Millionaire attorney Willie Gary's Major Broadcasting Corp. is still
on the air, however it is only on a few cable systems. Due to the Comcast
connection, Radio One's venture has the opportunity to be on every major
metropolitan system where African Americans are concentrated. Comcast
serves 21 of the top 25 U.S. markets, where 50 percent of Blacks reside.
According to Nielsen media research, BET reaches more than 74.5 million
households. African Americans are the largest minority segment among
U.S. television households and generally watch more television than
other segments of the population. Blacks comprise 13 percent of the
U.S. population and have an annual buying power exceeding $572 billion.
"African-Americans have experienced explosive population and per-capita
income growth and are one of this country's most attractive consumer
demographic groups," says Liggins, the 38-year-old who will head
the network. He earns over $1 million a year as chief executive of Radio
One, a $3 billion operation that includes 66 radio stations, a television
station and 2,000 employees. The deal came after a year of intense negotiations
that involved several key African American business owners interested
in launching a network targeting Blacks. Others that tried to put a
network together included hip-hop mogul Russell Simmons and television
actor and producer Tim Reid. Reid said: 'Key to getting Radio One's
project launched was its ability to lure a partner like Comcast, the
nation's biggest cable television operator, which has the money, connections
and infrastructure to launch a national network. It's a very expensive
and difficult thing to do".
A spokesman for the Congressional Black Caucus said the 38-member group
of elected officials was encouraged by the way the deal was designed,
explaining that, "The caucus would, in fact, like to see more opportunities
for these types of joint ventures and see people of color have the opportunity
to produce both more diverse programming and ownership opportunities
in front of the camera and behind the camera".
