OLN/Speedvision rides its hot niche

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Later this year, it might be a stretch to call the Outdoor Life Network "the House that Lance Built," but one could say Lance refurbished it.

This summer, the Super Bowl of cycling-the Tour de France-moves to OLN after a run at Walt Disney Co.'s ESPN and ABC. Five years ago, such a fact wouldn't have elicited much interest from people who weren't cycling aficionados. But thanks to U.S. cyclist Lance Armstrong, the network carrying the Tour de France matters. Mr. Armstrong won the Tour in 1999 and again in 2000, which might not have been such a big deal-fellow American Greg LeMond also won two straight-except that the victories came after Mr. Armstrong beat testicular cancer.

As a result, Mr. Armstrong has become an American hero. He's also a beloved pitchman for Fortune 500 companies, and the ads he's done for Bristol-Myers Squibb Co., Coca-Cola Co. and others have only raised his profile.

"He's a big American story, an incredible story in sports in general," says Roger Werner, president-CEO of OLN and sibling station Speedvision.

ESPN VETERAN

Mr. Werner, a cable TV veteran who helped launch ESPN and later served as its president-CEO, and his OLN staff could not have forecast the expected "Armstrong spike" when they signed a four-year deal to carry the Tour in May 1999, two months before the cyclist made his first triumphant ride down the Champs-Elysees in Paris. But intentional or not, OLN is counting on interest in the Texan to turn the Tour into an ad sales boon for the cable network and become a signature event, adding cachet to its brand.

Available in 36 million homes, OLN will carry 190 hours of Tour programming (see story below), including the first-ever live coverage in the U.S. of the event. Included will be a 2-hour live block every morning, repeated each afternoon with coverage bolstered through analysis and related features each evening.

OLN also has a deal with CBS in which it will pay the Viacom-owned network to broadcast the event on weekends, including the final stage. OLN-which along with Speedvision is owned jointly by a group that includes cable operators AT&T Corp., Comcast Corp., Cox Communications and News Corp.-will sell the ad time. That gives OLN a prime opportunity to cross-promote itself to the CBS audience and gain new viewers.

OLN already has inked several ad deals for its coverage. Ford Motor Co.'s Mercury brand is the exclusive automotive advertiser; CamelBack hydration products and Mongoose Sales Corp. bicycles are on board, and a deal with Nike, an Armstrong sponsor, is expected to be signed soon.

UPSCALE VIEWERS

Since OLN's launch in July 1995, cycling has been a pillar of its programming, particularly with international races held annually in Italy and Spain, plus key mountain biking competitions. Through developing the niche, OLN has learned cycling coverage draws upscale, well-educated men sought-after by advertisers because they tend not to watch much traditional TV or televised sports.

Besides cycling, the network targets passionate outdoors sports enthusiasts with a stable of activities that include skiing, such as coverage of the World Cup; fishing; surfing; and the Calgary Stampede. National Geographic-style documentaries also are in the mix. Within its male target, OLN says it can attract everyone from a 19-year-old snowboarder to a 50-year-old CEO hooked on fly-fishing.

Conveniently, OLN's life span has dovetailed with the increased overall interest among baby boomers in adventure travel and activities such as rock-climbing.

"I would say we were probably right on the curve," says Mr. Werner.

OLN is seeking another lift this year when the network becomes Nielsen-rated, which is expected to help prove its value to advertisers and allow network executives to fine-tune programming choices.

Nielsen Media Research began rating OLN sibling network Speedvision in the fourth quarter. In the first quarter of 2001 its ratings were up 36% to a 0.2, compared with fourth quarter 2000. (Speedvision garners about 80,000 viewers in prime time, Mr. Werner says. The network is available in 41 million homes.) The networks are sold by a joint 14-person sales force and offer bulk-rate purchases.

"There are a lot of accounts that just won't buy you if you don't have Nielsen numbers," Mr. Werner says. "Regardless of what the numbers are, if you're not publishing them, they won't buy you at all, so having Nielsen data is a huge boost for us and will help us generate a higher rate of sales growth over the next several years."

AUTO INTEREST

The pair of networks have established a beachhead among the major automobile advertisers, including General Motors Corp., Ford, DaimlerChrysler, Toyota Motor Sales USA and BMW of North America. And they have expanded recently into additional car marques. GM advertising, for example, has expanded from Chevrolet to Cadillac.

Partly fueled by more auto business, both OLN and Speedvision climbed just into the profitable range last year. Even in the current ad-market downturn, Mr. Werner contends the 40% yearly revenue growth will continue. In 2002, he expects combined ad revenue for the pair to top $50 million and, in the double-revenue-stream world of cable, subscriber fees to bring more than $70 million.

Besides the Tour de France on OLN, Speedvision could see viewer growth this year from its coverage of the Formula One racing series, which is a hit internationally but pales beside Nascar and even Indy racing here in the U.S.

Formula One racing "really has had more of a cult following," Mr. Werner says. "It's poised now to broaden its base of fan support here in the U.S." He says the typical Speedvision viewer is a male whose hobbies include cars, motorcycles and boating.

WELL-POSITIONED

With anchor programming, fresh Nielsen numbers and profitability, these are heady times at OLN and Speedvision. Mr. Werner believes the networks are well-positioned to take viewers from other TV networks.

"The big established broadcast networks and the big established cable networks are all losing audience share," Mr. Werner says. "Where's it going? It's going to things like Speedvision, Outdoor Life, HGTV, Food Network, Sci-Fi Channel-all with more specialized editorial. That trend will continue."

Mr. Werner ought to know a thing or two about getting successful networks off the ground, after in the early 1980s helping launch ESPN, which is widely credited with being perhaps the most successful entry in the cable universe.

Though founded in 1979, ESPN didn't really hit its full stride until 1987 when it added National Football League games and the America's Cup to its lineup of programming. Mr. Werner says OLN and Speedvision are now in a similar spot. "We're in that same milestone stage of development now that ESPN was in 1987," he says.

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