G4's message to marketers is "if you have an idea, we'll play," says Dale Hopkins, senior VP-distribution and sales at G4 Media. That means offering advertisers wide latitude to place their products on G4's programs and even allowing their commercials to appear as if they're part of a G4 program.
All of this would be heresy in the recent past, but it's the new reality for a niche cable network trying to launch in one of the most difficult media economies in years. Advertising will be even more crucial to G4 since the channel will charge no subscription fees.
G4 debuted in April in 3 million households with digital cable, and it plans to expand to 7 million by yearend. The brainchild of Charles Hirschhorn, a former Walt Disney Co. TV executive, G4 means "for gamers" and focuses on four kinds of gaming: console, PC, online and wireless. The network features 13 original weekly half-hour series.
$150 million bankroll
The new cable network has a bankroll of $150 million and three to five years to break even. Its backers are cable operators Comcast Corp., which owns a majority stake in G4, and Insight Communications.
G4 still faces significant hurdles. It hopes to capture an elusive audience: 12-to-34-year-olds, a group that can be notoriously fickle in their interests. G4 is using the traditionally analog medium of TV to reach people who spend much of their time in the digital world. The only thing interactive about G4 is a program called "G4TV.com," in which hosts chat on-air with G4 Web site visitors. And G4 must convince cagey marketers that it can offer the coolness of MTV at a reasonable price.
"Can they get inside the head of gamers and find out how to make their programming compelling? It's not easy," says Larry Gerbrandt, chief content officer and co-chief operating officer at media analyst Kagan Worldwide. "TechTV has had a tough time," Mr. Gerbrandt adds, referring to the tech-focused cable network that recently laid off 50 staffers. "This is something people would rather do than watch."
Not so, counters CEO Hirschhorn, citing research that G4 Media sponsored showing 87% to 95% of those surveyed would put down a game to watch a channel about games.
Certainly, there are positive signs in the game business itself. The videogame industry racked up $9.4 billion in U.S. sales last year, up 42.4% from 2000, according to NPD Group. The Interactive Digital Software Association says videogames are the fastest-growing entertainment segment, growing three times faster than the movie industry.
The industry is in the midst of a price war. Sony Computer Entertainment, Microsoft Corp. and Nintendo Corp. all cut prices on their consoles in recent weeks, and are planning a spurt of advertising this summer. But with no new hardware due from the Big 3 for at least two years, there won't be the kind of big spending that accompanies product launches.
G4's total devotion to videogaming is unusual in the cable universe. TechTV, which turned 4 years old last month, currently has only one program, "Extended Play," aimed at videogame players. The show is one of TechTV's highest-rated programs, says Greg Drebin, senior VP-programming and production, but he has no plans to add more shows targeting game players. "We think that gaming is an essential element of what we do, but it's not the exclusive," he says.
TechTV is in the process of shifting its programming toward what it calls a "digital lifestyle," covering not just computers and the Internet, but topics like animation and military technology. TechTV says it laid off 50 staffers in April due to the programming overhaul.
beyond videogAme ads
In the meantime, G4's challenge is to sell advertisers on its concept. And it's not just relying on videogame marketers. It's also negotiating broad sponsorship packages with automotive, apparel, credit card, movie and retail companies, Ms. Hopkins says.
But early signs are that it's not a slam dunk, even for marketers endemic to the category.
"We want to be integrated into our consumers' lives throughout the day, not just solely at the one passion that's tied to our product," says Lisa Donohue, senior VP-strategy director on the Nintendo account at Bcom3 Group's Starcom North America, Chicago. "They live and breathe videogames, but nobody only lives and breathes one thing."
Starcom has met with G4, she says, but hasn't yet committed to advertising on the network. "In the current economy, where so many networks, niche and broader, are aggressively pricing opportunities, advertisers can actually get a lot done with larger networks that may not be quite as niche, for a good price," Ms. Donohue says.
"The good thing here is they are open to doing integrated advertising," says Lisa Herdman, VP-associate director of network programming at Rubin Postaer & Associates, Santa Monica, Calif., which has met with G4 on behalf of American Honda Motor Co. One idea they discussed was incorporating a car into a G4 program such as "Game On," in which two men travel cross-country and compete head-to-head in game-related stunts.
Activision purchased spots at G4's launch to promote its "Spider-Man" game but so far hasn't signed a larger sponsorship deal. The entry-level pricing for the spots was "very affordable," says John Heinecke, director of global brand management. Activision hasn't tapped into G4's unconventional ad alternatives.
The U.S. Navy is another advertiser on G4.
Ms. Hopkins declines to comment on G4's sponsorship pricing or the names of any marketers G4 is talking to. Its offerings to advertisers include a 2-minute unit, produced by G4, that plays during the commercial break but seems like part of a G4 program; a package allowing studios to run an entire movie trailer as advertising; and the opportunity to have a new game showcased on a show titled "Pulse."
"Everyone's doing what we're doing," Mr. Hirschhorn says of new tactics for splicing advertising and content. "But we have the advantage of doing it from scratch" as a start-up network.
Cable network G4
Headquarters: Los Angeles
Launched: April 24
Subscribers: 3 million at launch, 7 million by yearend
Target audience: 12-to-34-year-olds
Backers: Comcast Corp., Insight Communications