Since its September launch, the upstart horse racing cable network's account-wagering system has penetrated just three markets -- Louisville, Ky., Portland, Ore. and Baltimore for a total of 4.5 million homes. Only 250,000 of those subscribers are on cable. The rest of the armchair railbirds tune in via satellite.
TVG offers 12 hours of daily programming, including news and results shows, and plans to expand into 12 to 15 markets by end of 2000. Once complicated legal matters pertaining to telephone and Internet wagering are sorted out, it plans to go national.
"Rather than requiring that the market come to the track, TVG takes the track to that market," says Rick Baedeker, a TVG VP who also serves as president of Los Angeles-area racetrack Hollywood Park.
TV GUIDE ANTES $130M
Hoping that both the sports entertainment and wagering elements of the business will eventually pay big dividends, TVG owner TV Guide Inc. has invested $130 million.
The National Thoroughbred Racing Association, a TVG marketing partner, is enthusiastic because TVG's revenue-sharing system gives back to racing associations and host tracks, and because new horse players could be a boon to the industry.
"TVG's attempting to reach a mass audience with programming that is both introductory and educational," says Chip Tuttle, NTRA's VP-communications. "They're attempting to introduce new players to the game while simultaneously tapping into some of the light and lapsed users of our product."
ESPN Chilton, a sports research databank, found in March 1998 that U.S. adults ranked thoroughbred racing 12th among 14 major sports. By September of this year, horse racing had risen to 10th in the poll. Still, TVG currently has just a few industry sponsors, and expects its share of wagers to make up any marketing shortfalls. However, it plans to seek mainstream, blue-chip advertisers.
"We're determined to partner with sponsors that enhance the product," says Mr. Baedeker, citing automobile and beer categories as targets.
Although some advertisers may not want to be associated with gambling, the NTRA has attracted such advertisers as AT&T Corp., IBM Corp. and John Deere Ltd.
OUTDOOR LEADS BRAND EFFORT
In way of promotion, Culver City, Calif.-based Pittard Sullivan, an entertainment marketing communications company, conceived a brand-building campaign that began with outdoor and print spots during last April's Kentucky Derby and continues with spots on ESPN.
In a spot titled "Man and Dog," a 20-something male channel surfer yawningly dismisses one sports option after another until he stumbles across TVG. At that point, he and the dog simultaneously register keen interest.
"We want to stress, this isn't just for the serious fan, but for the novice, too," says Steve Hayman, Pittard Sullivan's exec VP-advertising and promotion.
However, for the serious pony player, there is "The Jockey Spot," in which a man suits up in silks, goggles, the whole ensemble, but surprisingly turns out to be a TVG fan, not a jockey.
To assuage fears of gambling addiction, TVG participates in a program called AWARE (Always Wager Responsibly). Measures of the program include age verification, parental block, and lag times for reviving empty accounts, says Mr. Baedeker.