Monday, September 12, 2011

An Interim Report On Glenn Beck's New Online-Only Venture

Back in July, I wrote this post discussing Glenn Beck's move from Fox News to his own online-only media base, as well as Oprah Winfrey's recent move to her own cable network. I closed the post with these passages,

"Beck made sure his new venture is easily found, cheap to join, and ubiquitous. By emphasizing smart phones and tablets, plus political action projects, he's opened up his venture to younger audiences, as well as older ones.

Whether Winfrey or Beck proves to be more financially successful might be less important for the old media world, in the long run, than that both former conventional media stars bolted their former homes to control their future media destinies with so much apparent ease. How they fare may vary, of course, as Winfrey's management headaches attest. But their example may begin to sink in with more conventional entertainment creators who, until now, have sold their television series to broadcast and cable networks.

How long will it be before Glee, MadMen and Psyche simply go to websites and enjoy 100% of subscriber fees, selling by the episode, season or more, via credit cards and PayPal?"
This morning's edition of the Wall Street Journal provides some interim information on Beck's move. First, it refers to "clashes with network management" as part of Beck's motivation for the move. I'm sure Fox was getting pressure from various sources, given Beck's unvarnished, in-your-face style of confrontational video journalism.
But, as Beck explained in his web-based infomercial for his new online network, which aired immediately after he closed his last Fox News program, he had been urged by others to make such a move earlier than just this year.
According to the Journal piece,
"Because Mr. Beck owns the show and the network, he could make substantially more than the $2.5 million salary he got each year at Fox. GBTV is on track to take in more than $20 million in revenue in its debut year, according to a person close to the company.

The television industry will be watching closely to see whether the TV host can preserve his popularity while migrating to the Web, where efforts to get consumers to pay to watch online-only channels are just beginning.

When Mr. Beck announced GBTV in June, the network had 80,000 subscribers. In the months since, GBTV subscribers have swelled to more than 230,000, according to people close to the network, even though Mr. Beck's show hasn't yet begun.

The audience is far less than the more than 2.2 million daily viewers his program on Fox drew, on average, over its 27-month run, which ended in June after clashes with the network's management.

But it is more than the average 156,000 people who were watching the Oprah Winfrey Network in June.

Like GBTV, OWN was started by a major TV personality, but it's available through a traditional cable subscription. By contrast, Mr. Beck's network is available a la carte to subscribers who pay $9.95 a month to stream the network on and over interconnected devices such as tablets and mobile phones. The network's programming includes a reality show about the making of GBTV and a program anchored by Mr. Beck's co-hosts from his nationally syndicated radio show, which draws 10 million weekly listeners. A block of children's programming is slated to start later this month.

Mr. Beck said one of the reasons he ditched a network for the Web was a desire to reach out to young people. "I think networks are a thing of the past," he said. "I don't know anybody under 30 who is watching television the way I watched television. Technology has allowed people to change the way they consume the news, and we want to be where people are going." "

I'm impressed. Beck is already drawing almost 50% more in directly paying audience than Winfrey is via included cable distribution. Not to mention that Beck's program, which aired on Fox at 5PM, can now reach subscribers via wireless iPads and smartphones while the adults commute home from work. And Beck isn't wrong in his views, presented in the last paragraph of the quoted text. He's playing a long game for younger hearts and minds which don't see a few bucks per month as too much to pay for video programming.

In fact, Beck is teaching people to more aggressively disintermediate their cable television bills by beginning to pay directly for individual channels. The Journal article contends that Beck's subscription is $9.99/month, buy my July post, written soon after I watched the channel's infomercial, clearly states that the price closer to $5/month. I believe it was a charter-member price. But isn't it likely that, over time, Beck's channel will offer attractive renewal prices, or significantly lower rates for annual members? Not to mention begin to offer private social-networking marketing deals a la Groupon and LivingSocial? And discounts for referring friends to become subscribers?

Of course he will.

I don't have much doubt that Beck's experiment will succeed, even if not immediately. I believe he's shown insight in identifying how to secure editorial independence, the entire cashflow stream of a network, and adapt to video buying and viewing habits made possible and becoming predominant, thanks to evolving technology.

And, in time, I suspect, because of the nature of Beck's topics and audience, he'll have shown himself to be shrewder than Winfrey by assuming full ownership and risk, but retaining total control and financial rewards.

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