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Byron Allen: In the Black

2/14/2011 12:01 AM Eastern

Comedian/actor/entrepreneur Byron Allen is making waves in the
broadcast syndication and cable network worlds.

The standup comedian-turned-television mogul currently distributes
nearly two dozen syndicated lifestyle and interview programs, including
his own syndicated talk show Entertainers With Byron Allen, through his privatelyowned
company, Entertainment Studios.

Two years ago, Allen launched six 24-hour HD cable networks — Pets.TV, Comedy.
TV, Recipe.TV, Cars.TV, travel-themed Destination.TV and entertainment-industry news
channel ES.tv — making the 49-year-old Allen the only African-American entrepreneur
to have 100% ownership in multiple cable services. The networks are currently
distributed by Verizon Communications’ FiOS TV.

Cover_Story_Image_2/14To obtain approval for the recently closed Comcast-NBC Universal merger, Comcast,
the nation’s largest MSO, agreed to add at least three independent cable networks
with “substantial [minority] ownership interest” over the next three years. That leaves
Allen’s networks as likely candidates for a big bump in distribution.

Allen recently talked to Multichannel News programming editor R. Thomas Umstead
about his multiplatform distribution plans for his HD channels, as well as the
financial challenges that would-be African-American entrepreneurs face in launching
and operating a 24-hour cable network.

MCN: There are very few independently
owned networks currently on cable and
satellite programming lineups, and even
fewer are 100% African-American owned
and operated. What was your motivation to
launch six cable services in a very crowded
and difficult cable environment?


Byron Allen: As you know, we have
launched six 24-hour HD networks and
we’re approaching our second anniversary
for having them up and running.
We just extended our deal with Verizon
FiOS, and we have Frontier Communications,
and we’re in advanced negotiations
with other platforms. The way we see it is,
we’re in the content business and we are
producers of content. And we look at all
platforms as viable distribution, whether
it’s cable, telcos, satellite, Internet, iPad,
mobile phones or broadcast television
worldwide. We simply look at all platforms
as viable distribution systems for
our content. Our networks are the first
networks in which we own all of the content
— everything is shot in HD — which
allows us to go on all screens worldwide
simultaneously.

MCN: When you first looked to launch the
networks in a cable environment that is
dominated by four or five major distribution
companies, were you concerned about
getting significant carriage?


BA: No, not concerned. Content will always
win. We’re more focused on making sure
that our content is entertaining the audience.
Distribution systems are not unique,
content is unique. There’s only one Comics
Unleashed
; there’s only one The Gossip
Queen
, or whatever it may be. Those shows
are unique. Those pipes that get it to the
audience are no longer unique, whether
it’s cable, satellite, Internet, mobile. That’s
why you’re seeing more and more Internet
sensations pop up — what was unique was
whatever that person did in that video for
those few minutes that captured the imagination
of the audience.

So, I have unwavering faith in content.
We’re focused on making sure that the content
is compelling and engaging and unique
and people are passionate about it. If you
look at our networks, the audience is passionate
about all of our subjects. Those six networks are very focused. And, in the title,
it’s very clear what we represent.
So I think that there’s room in the marketplace
and if you really look at it, in the case of
cars and pets, we’re the only ones in that category.
In the other categories, there’s maybe
one other or two others in that category.
So, in the market, we believe in any of those
categories … certainly more than one or two
or three.

MCN: If distribution systems aren’t unique
and are interchangeable,
do you think
that your services
ultimately have a
better chance of
reaching those passionate
audiences
through alternative
distribution outlets
like broadband,
as opposed to the
cable side, which is
well-penetrated but
again has limited
capacity?


BA: First of all, it’s a marathon, not a sprint.
So it is a marathon. And ours is a content
play. And wherever the audience wants it,
that’s where we will deliver it. Today, it is a
cable, telco and satellite play; that’s where
the audience is. But the reason we produced
the content and own it 100% is so we
can go worldwide wherever they are and
wherever they want it.

MCN: Having said that, if we’re talking
again this time next year, do you have a
sense as to how many households you’ll be
in front of from a cable perspective?


BA: From a cable perspective? No. And
we’re not concerned — that’s the great
thing about not being publicly traded or
having any investors. Because it’s a marathon
and not a sprint, we produce the content
and we just keep building the distribution.
The good news is that over time, as we
do more and more deals, it will grow exponentially
very quickly because the market
is consolidated.

MCN: You have a unique perspective in
being the only African-American ownedand-
operated company offering multiple
cable networks. Why do you feel that there
aren’t more African-American and minority
entrepreneurs out there in the marketplace
operating cable networks?


BA: I think that there is an alarming condition
where African-American entrepreneurs
don’t have access to enough capital
to do what’s needed to have a successful
launch, and to their business. I started a
television-syndication company 18 years
ago. It has grown to be a very large television-
syndication company that is doing
very nicely, and that has put me in the position
to fund the launch of these six networks.

I guess the first question is, who have you
come across that’s been able to raise capital
of any significance anywhere in this country,
for any industry,
that is
African-American?
And i f
you can answer
that, then
it’s a nonstarter
for any category,
whether it’s
media or supermarket
chains
or whatever.
You’ve got to go
to square one
— raise capital.

I happened to raise capital the old-fashioned
way, brick by brick, and funded it
myself. It is not by accident that I am 100%
owned: It is by design because, quite frankly,
the capital wasn’t offered to me.

To replicate where we are now would be
a substantial investment. We have 28 shows
on the air on broadcast television, reaching
about 25 million people per week and six
24-hour HD networks beaming. But it’s not
a cheap proposition.

MCN: The Comcast-NBC Universal deal
was recently completed. As part of the
approval process, Comcast committed
to launching several minority owned and
operated networks. Are you looking to that
as an opportunity to gain distribution on
Comcast systems?


BA: We are having very healthy and robust
conversations with Comcast and I’m highly
confident we will get something done with
them. It helps that it’s mutually beneficial
to both of our businesses.

But merger or no merger, we’re looking
to do business with everyone. There was no
merger when we launched on Verizon. We
launched because we have unbelievable
value. These systems need to offer their customers
more because they are publicly traded
and they want to maximize revenue. And
it’s going to be tough to do that unless you offer
the customer more, or you will lose your
customers to others who are offering more.

So I believe that eventually we will be doing
business with anyone and everyone who
is extremely competitive and understands
that the cord-cutting has only just begun.

MCN: You mentioned cord-cutting. Do you
believe that consumers will cut their cable
services if they can get the content they
want on alternative services like the Web?


BA: The consumer is going to seek out the
content wherever they can and that’s why
you see more people now spending more
time on the internet because the content
is there. It is in everyone’s best interest
to do business with independents, to foster
competition and to allow the passion
of the independent to resonate with your
viewers.

It’s a dangerous trend to only do business
with half a dozen media companies. You
want to foster competition to keep the pricing
down and you want to do business with
passionate independents who can bring a
fresh and unique perspective to the playing
field that maybe you’re not providing your
customers.

I believe that everything will work itself
because whoever is offering the most compelling
content that is really resonating with
the customer, they’re ultimately going to be
the winner. So our focus is 110% content.

MCN: Having said that, have you talked
to some of the over-the-top technology
companies like Netflix or Roku to gain
distribution?


BA: Those conversations are advanced.
I mean, they are all viable outlets. Listen,
in every market only one station has
Oprah. But in every market there’s a half a
dozen to a dozen broadcast-television stations,
but the only one winning in that
time period is the one that has Oprah at
that time. The signals are not unique — the
content is.

September