What is the value of ZDTV?
To Microsoft Corp. co-founder Paul Allen, whose Vulcan Ventures spent $258.8 million last year to acquire 97% of the technology cable TV network from Ziff-Davis Inc., ZDTV is worth roughly as much as his $240 million Experience Music Project, the just-completed shrine to Jimi Hendrix in Seattle.
The ultimate arbiter of San Francisco-based ZDTV's value, however, will be advertisers. Can ZDTV's mixture of video game programming and e-business shows such as "Working the Web'' create an attractive environment for advertisers, particularly b-to-b advertisers?
"It's just starting to cross the threshold,'' said Jim Nail, an analyst at Forrester Research Inc.
A sticking point for Nail and others has been ZDTV's carriage, which has been a struggle. Carriage currently stands at 18.2 million homes for ZDTV, up from about 10 million in February 1999. The network expects to reach 23.4 million homes by the end of the year, said George Ehinger, ZDTV's VP-advertising sales.
Those numbers, however, are significantly less than the carriage of a typical b-to-b vehicle, such as the PGA Tour, which, when broadcast on one of the Big 3 networks, has carriage in 100.8 million homes in the U.S. What ZDTV does offer is technology programming and a concentrated tech audience that meshes well with the marketing programs of Nortel Networks, Oracle Corp. and other tech marketers, Ehinger said. "This is where their ad message is most relevant,'' he said.
Four b-to-b shows
The four shows reaching a b-to-b audience, according to Ehinger, are "Working the Web,'' which offers advice on building e-commerce Web sites; "Silicon Spin,'' a high-tech issues program; "Big Thinkers,'' which features interviews with key figures in the high-tech industry, such as Novell CEO Eric Schmidt; and "ZDTV News,'' a news show with a high-tech slant.
ZDTV doesn't participate in Nielsen Media Research ratings. The network estimates its viewing audience by analyzing visits to its Web site. "We have a high degree of interactivity between the Web site and the network,'' Ehinger said. "We can identify highly detailed information about users, or `viewsers,' as we call them.''
Analysis indicates 18% of users are senior managers, and 41% are corporate influencers/decision-makers, according to @plan, spring 2000. These kinds of numbers have swayed some media strategists to see ZDTV as a solid option. "I'm gung-ho on ZDTV in the mix of things,'' said Sarah Fay, managing director at media buying shop Carat Freeman, who likes the network's concentration of tech targets and its interactivity.
Becoming a believer
United Parcel Service of America is another ZDTV believer. The company sponsors the "Merchant of the Week'' feature on "Working the Web.'' The feature highlights an e-commerce Web site. Through its sponsorship, UPS has garnered 1,500 leads as companies nominate their sites for consideration as "Merchant of the Week,'' according to Angela McMahon, public relations supervisor for UPS.
It's this kind of interactivity that will ultimately make ZDTV attractive to more advertisers, Ehinger said, adding, "We provide more quantitative results than you can get sponsoring some golf tournament or sponsoring the NBA finals.''
Fay said the kind of niche marketing ZDTV offers will increasingly be the way marketing messages are delivered in the future, thanks to the influence of the Internet.
"We could see an annihilation of mass-media marketing,'' she said.