With its November acquisition of AT&T Broadband, networks such as The Golf Channel, QVC, E! Entertainment Television, Style and the Outdoor Life Network are now popping up in parts of the country where viewers have never encountered Anna Nicole Smith's dog Sugar Pie or bought a piece of jewelry off TV. Coincidentally, Comcast owns majority shares in all of the aforementioned networks, including The Golf Channel.
Celebrating its eighth year on the air and fourth anniversary of turning a profit, The Golf Channel is one of several cable networks poised to make a quantum leap into the homes of new cable subscribers across the country.
"There are so many things we can do to grow our brand, and this is one of them," said David Manougian, president, The Golf Channel. It is also part of Comcast's new goal of not just delivering content, but owning it. Last week, Comcast announced a deal with Radio One to launch a cable network targeting black viewers. The new network would compete with Viacom's Black Entertainment Television.
"It's the right strategy for them," said Evan Rothschild, an analyst with Delaware Investments. That strategy started with the merger. Prior to the $57 billion deal, which included Comcast taking on about $20 billion in debt, AT&T Broadband was in approximately 14 million homes and AT&T Comcast, as it was previously known, reached about seven million. When AT&T Comcast acquired AT&T Broadband, the resulting venture became Comcast Corp., now the country's largest cable operator with 21.4 million subscribers in 17 of the nation's top 20 markets.
"It has in fact confirmed our vision and our strategy that if you invest early in niche networks with great demos, you will end up with a nice business. In that respect, golf has been the model for our strategy," said Amy Banse, exec VP, Comcast's programming investments division."We call it vertical integration. We don't see ourselves as programmers. We see ourselves as business strategists," she said.
The Golf Channel, started in 1995, did not turn a profit until 1999. But the niche strategy means the network has found success selling to marketers most interested in reaching 45-year-olds that make more than $75,000 per year.
All totaled, The Golf Channel is now in 50 million U.S. homes on the myriad of cable service providers, including Cablevision Systems Corp., Media One and Time Warner Cable. The Comcast-AT&T deal opens even further possibilities.
Said Mr. Manougian: "Before the merger, Comcast had about six million subscribers and AT&T Broadband had 14 million. Do I expect to get the eight million difference? No, but five to six million is reasonable. Some of these markets have already started to come to fruition."
One such market is Portland,Ore. The Golf Channel was in 175,000 homes in Portland; now it is now in 500,000. As Comcast continues its repositioning, The Golf Channel will reap subscriber growth in Atlanta, San Francisco, Chicago, Boston, Miami and Los Angeles.
The same is expected for QVC, E! and the rest of Comcast's properties. In fact, Comcast has begun to make investments in the networks. The Golf Channel added a new set design on Jan. 13, and has signed a deal with the Champions Tour (formerly the Senior PGA Tour) to televise more than 50% of its schedule. It will also have a larger presence at several PGA Tour events and will originate programming on-location. A new prime-time program schedule, including pre- and post-game shows, a weekly series focusing on men's and women's collegiate golf are also in the pipeline.