Viacom's BET has been the only real juggernaut in African-American TV programming in more than 30 years, but the network is about to get its first real taste of competition.
Among its challenges are cable networks from Magic Johnson and Sean "Diddy" Combs backed by Comcast, a doubling of the content slate at TV One and the launch of several local networks targeting minorities. BET is responding by beefing up its investment in scripted programming and making its first foray into original movies.
But the crucial question is whether advertisers, with more opportunities to target the demo, will increase their budgets in the African-American market or simply take money out of BET.
"Just because more supply is added doesn't mean advertisers will increase their budget, but if these new networks substantially grow ratings [advertisers] might put in more money," said Rob Bochicchio, exec VP-chief media investment officer at ID Media.
BET is in a better position to retain advertiser support than it was a few years ago, when ratings were at a standstill and the network was perceived as a riskier place for ads. In 2007, it faced backlash for the comedy series "Hot Ghetto Mess." The show evoked scorn from the black community, and several big advertisers pulled out.
Since then, BET CEO Debra Lee has revamped the brand. The network plans to introduce a new tagline and consumer-branding campaign next month.
The channel is also focusing on programming that fits the motto of "reflect, respect, elevate," said Matthew Barnhill, exec VP-corporate market research at BET. That means more scripted content and exploring different genres.
BET, which Viacom purchased from founder Robert Johnson in 2001, will make more-detailed programming announcements at its April 18 upfront.
The network has been making strides, most notably with "The Game." The show garnered more than 5 million viewers during the season-five premiere to become the No. 1 cable-sitcom premiere this season for adults 18 to 49. BET acquired "The Game" in 2009 after it was canceled by the CW. BET has also seen strength with sitcoms such as "Reed Between the Lines" and "Let's Stay Together."
But the network's greatest assets in the eyes of advertisers are its tentpoles such as the "Celebration of Gospel" and "BET Honors." These events attract a younger African-American audience that most current and coming networks don't reach, and, said Doug Ray, president of Carat USA, advertisers can build campaigns around them.
"BET has become more family-oriented and aspirational and inspirational," said Kris Magel, exec VP-managing director of national broadcast at Initiative . "They are broadening their programming, focusing on more than just music and comedy. Advertisers are feeling more comfortable with BET than they did a few years ago."
That will be critical as new competition enters the market.
As part of the deal with regulators to buy NBC Universal, Comcast agreed to invest in 10 new independently owned minority cable networks. The first two are Aspire from NBA legend Magic Johnson, which will focus on positive images of African-Americans, and the music-themed Revolt from "rapperpreneur" Mr. Combs.
Comcast is expected to launch two more networks that will be majority African-American owned. Aspire is receiving the most attention, said media buyers. Mr. Bochicchio said several clients have expressed interest. And Revolt has an opportunity to pick up viewers who are still looking for music programming, as both MTV and BET have scaled back.
There are other localized efforts to target African-Americans, with Soul of the South Network and KIN TV preparing to go live this spring. Tyler Perry has also said he is working on launching his own channel, Tylervision. And Bounce TV became the first multicast broadcast network focused on the African-American community when it premiered in September 2011.
For several years the Hispanic market has been the focus of advertisers looking to target a multicultural audience. But African-Americans watch more TV than any other ethnicity—an average of nearly 213 hours a month, according to a Nielsen study. It is also estimated that they will have $1.1 trillion of buying power by 2015.
"The group hasn't been a focus for advertisers because there are only a handful of networks," Mr. Bochicchio said.
But as more players enter the space, ad dollars could shift around and possibly even out of other general-cable networks.
"Since there haven't been enough opportunities to target African-Americans, advertisers may be willing to cut into their general budget to broaden their scope," Mr. Magel said.
Advertisers are also moving more toward total-market planning, meaning they are looking at how their general-market buys deliver across niche audiences and all ethnicities.
But, Mr. Ray said, niche networks still have a place when they deliver more than gross ratings points -- namely, quality engagement.