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MTV and Showtime Plan Cable Channel for Gay Viewers

Looking to take advantage of what they say is a large and lucrative niche audience untapped by television programmers, two cable divisions of Viacom (news/quote), MTV Networks and Showtime, are developing a plan to create the first cable channel aimed directly at gay viewers.

The still unnamed channel would be offered to cable system operators as a pay channel like HBO or Showtime – only much less costly at $5 or $6 a month – but it would also include advertising. MTV Networks and Showtime have conducted extensive audience testing and concluded that there is, as one Showtime executive put it, “near unanimous enthusiasm from gay viewers” for the concept.

Betsy Frank, executive vice president for research for MTV Networks, said the gay channel had the potential to make the same “groundbreaking impact” that the Fox network, the WB network and the Black Entertainment Network had. “We see this as the next step in what a television network is supposed to be.”

The idea, however, has yet to be presented to operators of cable and satellite distribution systems. “Will the cable operators go for it?” said Matt Farber, a former MTV executive who has worked as a consultant on this project. “I guess we’ll find out.”

No timetable has been set for the channel’s possible start, but Gene Falk, the senior vice president for the MTV digital media group, said, “If things go right, we could be on within a year.”

TV Guide magazine reported earlier this week that a gay channel was under consideration at MTV Networks and Showtime.

The presence of gay characters on television, both on cable channels and the broadcast networks, has increased in recent years in shows like NBC’s “Will and Grace” and Showtime’s “Queer As Folk.” But the proposed gay channel would take that trend to a new level.

The programming, as described by several of the executives involved in the planning, would include acquired films, original series, imported series, news and information programs, talk shows, comedy shows and travel shows. Ms. Frank said that surveys of potential viewers had shown that gay viewers would be willing to pay a fee for “programming they’re not getting but would like to have.”

Joan Garry, the executive director for the Gay and Lesbian Alliance Against Defamation, welcomed the plans for a gay channel, saying, “The flag I’m carrying is for visibility, and the more the better.”

But she said the gay audience was diverse in makeup and taste and would not watch gay programming just to see gay programming. “It will be all about the content. At the end of the day, if the content is smart, the channel will have a real shot.”

The channel is aimed at exploiting the increasing channel capacity now possible because of the expansion of digital television service on both cable systems and direct satellite systems. According to the executives of MTV Networks and Showtime, about 20 million cable homes can receive digital programs, and another 20 million homes reached by satellite service have digital capability.

Executives from the two Viacom divisions said they had research that said gay viewers occupied about 6.5 percent of television households. Those numbers are a rather rough estimate, however, because all measurements of the gay population involve some guesswork about numbers of people who have not openly declared themselves to be gay. Ms. Frank said, “The numbers are a bit all over the place.”

The estimates are similarly uncertain for the amount of disposable income controlled by gay Americans. Mark Greenberg, the executive vice president for business development at Showtime, cited research showing that gay Americans have as much as $350 billion a year in spending power. But that figure, which has been cited in other research surveys, is generally regarded as an extremely broad calculation.

What is not in dispute is that gay adults are an increasingly attractive audience for many advertisers, both because of their relatively high spending and because they are often in the vanguard of certain cultural trends. “Over the past 10 years,” Mr. Farber said, “gays have been a driving force in pop culture.”

Mr. Greenberg compared the potential gay channel to others that Viacom has started, like Nickelodeon and MTV itself, where “they reached out to underserved audiences.”

He said: “Like MTV created a new audience that advertisers went out of their way to reach, we think we can do the same thing here. Advertisers began making commercials specifically for MTV. That might happen here, too.”

He called the gay audience “highly loyal” and pointed to Showtime’s “Queer As Folk,” a realistic and often highly graphic depiction of contemporary gay life among young men in Pittsburgh. “The show has twice as high a rating as anything else in prime time on Showtime,” he said. He declined to give a specific number of viewers for the program on Showtime, whose ratings are not reported by Nielsen Media Research (news/quote) because the channel runs without commercials.

Mr. Falk of MTV Networks said the idea of doing a gay channel had “kicked around the company for years, going as far back as the early 1990’s.” More recently, both MTV Networks and Showtime started developing the idea along separate tracks. They were brought together when it was decided that the best way to market the channel was as a combination of a pay channel, the Showtime model, and a channel with a niche audience supported by advertising, the specialty of MTV Networks.

Executives from both organizations said that while certain specific commercials might run on the channel, a more likely model would be to have program sponsorships, with the company and its products mentioned only at the beginning and end of programs.

Mainly, however, the show will be sold both to cable and satellite operators and consumers as a lower-cost pay channel. That will guarantee a certain amount of revenue, the executives said, covering programming costs.

It also may make the channel more attractive to cable and satellite operators, who will receive a percentage of each subscription fee. But Mr. Falk said another reason to make the gay channel a pay channel was that it would eliminate any potential protest from those who might oppose the content. “No one who doesn’t want this will ever see this channel,” Mr. Falk said.

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