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Lime Time Presentation

8/18/2006 8:06 PM Eastern

Touting the virtues of a green, pollutant-free environment where everyone eats organically grown food, practices yoga and is in tune with their own inner voice is difficult in a crowded, noisy 500-channel cable environment.

Lime CEO CJ Kettler knew that before launching the purveyor of health and environmentally friendly programming — formerly Wisdom TV — last November, so she decided to spread the company’s karma through virtually every available media pipeline.

From its inception eight months ago, the network was built to take advantage of new forms of media available to consumers on and beyond the TV.

Majority-owned by America Online Inc. founder Steve Case’s Revolution investment firm, Lime’s brand can be found on at least five different media platforms: a traditional, linear cable television network; cable system-delivered video on demand; broadband Internet content; satellite radio and Apple Computer Inc.’s iTunes portable media site.

The company is hoping to squeeze significant revenue out of all these platforms, by selling everything from 30-second spots on TV and radio to podcast sponsorships.

And Lime expects its focus on feeding chunks of content to all platforms will keep extending the reach of its eclectic mix of original and acquired healthy living-related content, according to chief financial officer Robert Harris.

“If you want to distribute media and you want to reach consumers, there’s a lot of different ways to do that today,” he said. “We want to be wherever our viewers are.”

FIRST, NOT LAST

Having been at the forefront of arguably the last successful cable launch of an independently owned network in Oxygen, Lime CEO Kettler knew the fledgling channel would have to evolve into more than just a cable network to survive in today’s competitive marketplace.

“Frankly, none of us had any interest in being the last of the linear digital channels,” said Kettler, who as a yoga enthusiast practices what the network preaches.

“Our goal was to launch a multiplatform business and to build a brand on all platforms,’’ she said last week. “Our view is that our content should be on any and all platforms.”

And that is coming to be. Lime can be found on just about every medium available.

On cable: Lime, the TV network, is in 7 million homes, mostly derived from its carriage deal with EchoStar Communications Corp.’s Dish Network and Comcast Cable.

On demand: Lime offers VOD content to 2 million cable subscribers, making the video available for playback whenever viewers request it.

On radio: Lime provides content 24-hours a day to Sirius Satellite Radio, eight hours of which consist of live call-in shows like The Good Life Show With Jesse Dylan.

On cell phones: Lime Mobile provides text-based content to Verizon Wireless and Sprint Nextel Inc. cell phone subscribers. The company hopes to roll out video content later this year.

On hand: Lime on iTunes offers several audio and video podcasts ranging from healthy eating to eco-friendly fashion designs from Lime Radio and Lime Television hosts specifically customized for podcast content.

On the Internet. For viewers with broadband connections, Lime’s Web site (www.limenow.com) provides high-quality streamed video and social-networking tools.

Kettler said the one-syllable brand just stands for itself, however. “We’re pretty careful not to say things like Lime TV, Lime Online and Lime Radio … it’s just Lime,” she said. She doesn’t want the company to be defined as a TV channel, a broadband service or a radio station.

Casting a multiplatform business is not new to Kettler. In 1999, she was on board for the launch of Oxygen Media, which promised then to combine its content both on TV and the Internet.

But Oxygen was ahead of its time, said Kettler — the broadband business had yet to develop. As a result, Oxygen abandoned its ambitious early online endeavors, and is only now beginning to make inroads on the Internet.

“When Oxygen tried to do this, broadband had maybe 5% to 10% penetration,” says Kettler. Now, 42% of all U.S. adults have broadband connections at home, according to the Pew Internet & American Life Project.

Broadband penetration has now increased exponentially,” Kettler said. “Meanwhile, most people have a cell phone and everyone is walking around with an MP3 player, so the penetration level of all of these portable devices has changed the landscape.”

And Kettler said Lime’s self-help and informational content such as Feng Shui: Living in Harmony, Homeopathy: Mystery of Healing and Stott Pilates With Moira is perfect for both the short-form appeal of broadband and mobile, and the longer, traditional 30-minute shows for the TV channel.

As an example, Kettler pointed to its newest show, Pure and Simple With Michel Nischan, a healthy food and healthy eating-based program featuring the award-winning chef that debuted this past July. On broadband, Lime may offer a dish prepared by Nischan along with the recipe. An even shorter version is cut for a podcast or mobile distribution.

Finally, a long-form version — which features the dish, as well as commentary on why it’s better to eat fresh — would appear on the cable network.

REVENUE OPPORTUNITIES

Kettler hopes the Lime strategy will eventually fill the company’s coffers through a mix of advertising, sponsorship, subscription and licensing fees.

Using the Pure and Simple model, the company hopes to sell spot advertising for the 30-minute show through traditional media such as cable and satellite radio; online banner ads and other advertising for vignettes and other related text content through the Web; short-form sponsorships through portable media like cell phones; and finally DVD sales of existing episodes, according to Kettler.

While the model sounds promising in theory, it’s a bit harder to implement in reality.

Harris would not say who’s advertising on the TV channel, but with its limited subscriber base, Lime faces an uphill battle trying to attract marquee advertisers.

Lime is generating cable-network license fees from “some distributors,” said Harris, but he would not reveal specific details. But typically, small, niche startup networks rarely generate more than pennies per month per subscriber from operators.

On the mobile front, the company receives an unspecified fee from Verizon Wireless and Sprint for each visit to Lime’s text-based mobile area, according to Harris. Eventually, Lime hopes to create adverting opportunities not only through the major mobile carriers but also through its own Wireless Application Protocol (WAP) site, which most mobile phone users can access. None of Lime’s wireless offerings feature video content.

“The mobile platform is still somewhat nascent in its way to exploit the recognized value in the content,” he said.

On the satellite-radio side, the network keeps a percentage of ads per hour to sell for its content, with the number of avails varying based on live and repeated content, although Harris would not reveal specifics.

“Sirius continues to grow and we see some great revenue potential for the company,” he said.

The area that holds the most promise for the network is the Internet.

Advertisers such as Pet Promise, Netflix and Wild Oats food stores currently advertise on the site, and Harris said the company is talking to several others about sponsorship opportunities through its content.

The site, which features video shorts from shows like Abs According to Rodney Yee, Healing Baby Massage and Deepak Chopra on Sex and Spirituality has experienced a 300% increase in unique visitors since April.

“We know that online is an incredibly important platform for us, namely because the online platform is where you get a taste of all the other platforms,” said Kettler, who added she expects the network to break even within four to five years.

“You can stream Lime radio on lime.com. You can get a sense of some of the shows we’re podcasting at lime.com. You can access our mobile WAP site. It’s the most important platform because it’s the most ubiquitous.”

So who’s actually accessing Lime content? Everyone who’s concerned about the environment and living healthy, according to Kettler.

Americans spent $230 billion on healthy lifestyles last year — $20 billion of that on natural and organic foods alone.

SWEET SPOT

The network’s sweet spot, however, is adults 25 to 54.

The Lime cable network isn’t rated, but executives said its Web site generated 170,000 unique visitors in July, more than double the 85,000 users in June.

And they’re utilizing all forms of media to get their information. With such a fragmentation in the audience, Kettler says that Lime’s multiplatform approach gives advertisers the ability to reach viewers wherever they are.

“Growing our online, podcasting and mobile presence shows us the value of the multiplatform promise, but it’s also what the advertisers are asking for,” she said.

Despite the limited reach, Kettler believes the network is in better shape to take advantage of the burgeoning new-media landscape than some of the larger, more established networks.

“Many other companies have to re-engineer their efforts because they are established businesses,” she said. “We’re more fortunate because as a company, we always started with a multiplatform business in mind.”

And, just maybe Lime will be able to shout its pro-green message through the new-media pipelines a little louder than McDonald’s or Subaru can.

September