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Will Also Launch New Channels for U.S. Hispanic Youth

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NEW YORK ( -- Viacom's MTV Networks said it plans to build on the success of its Comedy Central network, which has captured a loyal, youthful following
MTV Networks' chairman-CEO, Judy McGrath, cites an 'extraordinary year' and lays out expansion plans.
on the strength of its original programming, both here at home and overseas next year.

Thanks in part to the presidential elections, the network has become a cultural touchstone, capped off by The Daily Show, whose host, Jon Stewart, has become a media darling and has a No. 1 best-selling nonfiction book, America, on The New York Times best-seller list.

'Gold standard'
"Comedy Central has had the most extraordinary year," MTV Networks' chairman-CEO, Judy McGrath, said Dec. 6 at the Credit Suisse First Boston Media and Telecom Week conference. "They are the gold standard for talk."

Ms. McGrath said MTV Networks is looking to brand the channel overseas and potentially launch a spin-off standup comedy service in addition to other products. "There's a lot of interest in Comedy Central for it to travel internationally. We have a lot of Paramount networks [overseas] that could be rebranded," she said. Paramount, with its film and TV properties, is also a division of Viacom.

Tapping the Hispanic market
Comedy Central isn't the only property set to expand its reach. MTV International, one of Viacom's biggest revenue generators, may also see some exposure

stateside. Van Toffler, MTV Networks group president, said the company has plans to bring MTV International's output here to address "several populations that exist in pockets" in the U.S. Ms. McGrath said MTV is exploring new channels to service the rapidly expanding Hispanic youth demographic. (MTV Espanol and MTV Latin America are existing brands.) "We are over indexing with these audiences and we just want to understand who the demographic is," she said.

Viacom is still preparing the launch of Logo, a new gay-and-lesbian-themed network, for the early part of 2005. When asked if Viacom had seen any resistance to Logo from cable operators or advertisers, Ms. McGrath said, "Not really. Most of the advertising we are targeting currently lives in print and they're excited about it."

Ms. McGrath and Mr. Toffler said they have been staffing up, hiring from Microsoft Corp. and Yahoo! in anticipation of building broadband and wireless products such as ring tones. MTV Networks has been approached by AT&T and Verizon to team up to explore opportunities in telecom. "It's about touching consumers where they go and making sure we don't miss a cultural beat, because the money tends to follow," Ms. McGrath said.

Changes to ad sales unit
Separately, MTV Networks looks set to tweak the structure of its advertising unit, following the appointment of former Comedy Central President Larry Divney as chief operating officer of advertising sales. The arrival of Mr. Divney bodes well for his former colleague, Hank Close, executive vice president of advertising sales, according to industry executives. Mr. Close's promotion is widely predicted both inside and outside the company.

Mr. Divney is said to be looking to hire staff who can help sell MTV Networks' properties on new distribution platforms such as wireless and broadband. MTV Networks' is also potentially looking to replace Mark Rosenthal, who was co-president of MTV Networks and headed sales and operations. Mr. Rosenthal resigned after being passed over for the CEO job that went to Ms. McGrath.

Prepping for the upfront
MTV Networks is set to meet in Puerto Rico in mid-January to discuss advertising strategies and prepare for next year's TV ad buying-and-selling season, known as the upfront. Ms. McGrath said that while MTV Networks was enjoying another strong year, there is still a gap between the prices broadcast networks' command for advertising vs. cable.

While MTV Networks has cornered the youth market with its services and programming, some say the company risks cannibalizing itself and that it needs to reach beyond its core focus in order to grow ad revenues. Ms. McGrath hinted there were plans in the works to reach what she termed "upscale boomers." "We're always looking at opportunities to create something new."

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