BY DAVID SPEAKMAN
Like the breakthrough technologies and gurus it features, national cable-television channel TechTV is revamping its programming while resisting the temptation to pattern itself after standard cable fare.
Its unconventional approach has attracted 38 million cable and satellite subscribers in the five years since the San Francisco channel went on the air, but hasn’t made a profit. While staying true to its mainstay audience of male viewers who quickly latch onto edgy electronics, TechTV wants to lure younger viewers who find technology fun.
“Technology has been looked at as a tool box,” says Greg Brannan, an E Networks alumnus who’s at the helm of TechTV’s programming. “The time has come to look at it as a toy box as well.”
TechTV believes revamping programming and creating buzz-worthy shows will attract more viewers and more revenue. Brannan is searching for TechTV’s first cult hit to do what “South Park” did for Comedy Central or what “The Osbournes” did for MTV ratings. The channel’s new half-hour series “Wired for Sex” and “Spy School” are expected to tempt younger and younger-thinking viewers.
“We’re targeting, in particular, a younger viewer,” Brannan says. “And, I don’t necessarily mean demographically, but attitudinally; people who really love this space. They use technology for business efficiency like the generation that preceded them, but they also use it for recreation and entertainment. The network to date hasn’t fully taken advantage of that.”
“We’re here to make a profit,” TechTV COO Joe Gillespie says. “I don’t know of any cable startup that turned a profit within its first five years.”
Gillespie joined the privately held company when Ziff-Davis Inc. launched it in May 1998 as ZDTV. In 2000 Microsoft Corp. cofounder Paul Allen bought ZDTV through his Seattle-based Vulcan Inc. investment firm and later renamed the station TechTV. It is carried as Channel 294 on most local cable systems.
“Paul has a real keen sense of what it takes to build an infrastructure,” he says. “It’s all about defining and attracting an audience and he knows it’s got to be about that first and foremost.”
The majority of cable network revenues flow from two streams: advertising and carriage fees paid by local cable companies. The more households tuned in, the greater the revenues.
Although TechTV’s 38 million households seem like large numbers, by cable industry standards a network isn’t fully accessible until 70 million households are watching. So far, TechTV primarily attracts the highly sought after advertiser demographic of educated, affluent male viewers, ages 18 to 35. These are “first adopters,” who buy expensive items, like high-tech toys and cars, as soon as they hit the market.
“TechTV needs to expand to get a broader viewer base,” says Mark Kersey, senior analyst with ARS Inc. of La Jolla. “It’s definitely going to take quite a bit more than 38 million homes. With mainly satellite and digital cable, the channel has limited reach.”
Kersey says there are two ways to grow: by gaining a larger share of the current demographic or to expand into other audiences, women or senior citizens, for example.
TechTV is challenged by going it alone in a cable universe dominated by giant companies, such as AOL Time Warner Inc., Liberty Media Corp. and Viacom Inc., that own multiple channels.
“The key is to get over yourself and realize your perceived weaknesses are your strengths,” Gillespie says. “I like the fact I’m independent because I can be original. I don’t have to be the 15th version of the Discovery Channel. There’s nothing else like TechTV on the planet.”
Could that strength be a weakness?
“When you look around and you don’t see any competitors, either you’re really smart or you’re nuts,” says TV critic Rick Ellis from AllYourTV.com of Birmingham, Ala. But TechTV has “a good chance of survival with an interesting niche and good advertisers.”
True to the Silicon Valley ethos, TechTV is out to prove to the TV establishment that people who defy convention can be profitable.