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RFD-TV Clears Hurdles To Deliver For Rural Audiences

12/13/2010 12:01 AM Eastern

Few programming ventures could survive
the challenges faced by RFD-TV.

No banks would lend to the fledgling network,
as they questioned whether viewers or operators
would support a rural-focused channel, according
to its founder.

Despite this, RFD-TV launched as a not-forprofit programmer. But an adverse ruling by the
Federal Communications Commission in 2007
forced RFD-TV to go commercial, with its operating
funds coming from programming providers,
the founding family and subscriptions to its
programming-guide magazine.

Despite that seemingly shaky foundation,
RFD-TV’s management then took its biggest
gamble of all — signing a multimillion-dollar contract
to bring the TV simulcast of then-disgraced
talk jock Don Imus’ radio show to the little-publicized
network.

Yet RFD-TV survives: It’s now wrapping up
its 10th year of operation, passing 40 million
cable and satellite homes.

“We’ve had every [challenge] in the world,”
Patrick Gottsch, founder and president of
RFD-TV and parent company Rural Media
Group, said. But once executives decided it
was “about time someone paid attention to
rural America,” according to Gottsch, they
vowed to stay in business for the long haul.

NON-PROFIT BEGINNING

The channel is named after Rural Free
Delivery, the postal service that brought
the rural United States into the mainstream
114 years ago.

“One of our goals was to connect city
and country. Once, everyone had a family farm,”
said Gottsch, who grew up on such a farm
near Omaha, Neb., where the channel is now
headquartered.

Gottsch left Nebraska, becoming a
Chicago commodities broker and a successful
C-band satellite dish dealer, before
launching the national uplink for
RFD-TV in 2000.

“I tried to borrow for years, but I got
kicked out of everywhere,” Gottsch said of
his visits to bankers on behalf of the privately
held channel. “They had questions: Is there an
audience? Will the operators support you?”

Gottsch started RFD-TV as a non-profit,
televising farm reports and other agriculturerelated
programming. Content providers paid
for their time.

RFD-TV added to its revenue stream in
2003
by launching RFD-TV the Magazine, with
program listings and rural-lifestyle features, for
which
consumers pay $30 for six issues a year.

The channel’s status as a public-affairs channel
allowed it to qualify for a lower-cost slot on satellite
lineups, but it still had to reach terms with distributors.
Gottsch cited Dish Network chairman
and CEO Charlie Ergen as giving RFD-TV its
first break.

“He stepped up after years of our trying to get
financing,” Gottsch said.

The Dish affiliation agreement allowed RFDTV
to launch in 4 million homes. DirecTV added
the channel in 2002.

RFD-TV expanded its attractiveness to distributors
in 2004, when it moved its production operations
to North Star Studios in Nashville, Tenn.
That allowed the channel to develop relationships
with talent abandoned when The Nashville Network
changed its name and format in 2000.

Today, RFD-TV is the home to former TNN
stalwarts such as Ralph Emery, Crook & Chase,
Marty Stuart and reruns of Hee Haw.

Despite investments in original programming,
Gottsch laughs when he concedes the latter remains
the most popular programming on the network.
“They never did [humor based on] current
events. The shows are just as corny as they ever
were!” he said.

Chief executive officer Ed Frazier, a longtime
sports TV executive, came onboard in 2005. Programming
additions helped convince satellite
distributors to add RFD-TV to more widely delivered
tiers, and affiliations with Headend in the
Sky (HITS) and operators such as Charter Communications helped the channel pass 30 million homes by 2006. RFD
HD launched in 2009 and is approaching 1 million subscribers, with “significant launches” expected early in 2011, the company says.

The venture’s biggest challenge came in 2007. A competitor, the publication
Farm Journal, filed a complaint with the FCC arguing that RFDTV
was in fact a commercial operation. The complaint cited the commercial
cattle auctions televised on Saturdays since 2006.

That December, the FCC agreed, citing the “special relationship” between
RFD-TV and Superior Livestock Auctions.

“We could have fought, but it was clear we couldn’t exist forever as a nonprofit,” said Gottsch. “We have a large and passionate audience” that wanted
more from the network and loosened from the non-profit restrictions,
RFD-TV could add more entertainment programming, as well as content for its target sectors: agriculture, equine events and rural lifestyle.

“It turned out to be a blessing,” Gottsch said of the FCC ruling. “In the
last three years, we’ve really upgraded our programming.”

GAMBLING ON IMUS

The channel’s highest-profile programming gambit was the equivalent
of a minnow swallowing a whale. Gottsch reeled in radio star Don Imus,
who in 2007 was fired from his longtime radio home, WFAN in New
York — as well as his national syndication deal with CBS Radio and TV simulcast deal with MSNBC — for making disparaging
remarks about the Rutgers University
women’s basketball team.

Imus did a deal with RFD-TV to simulcast
Imus in the Morning upon its return to radio later
that year on New York’s WABC-AM. Gottsch
has never confi rmed how much he paid for the
deal with Imus. The New York Times reported at
the time it was $5 million per year.

“You produce a show with a big icon like
Imus, it’s going to be a very expensive show,”
Gottsch said.

The network only carried Imus for 20 months
from December 2007 to August 2009. (Imus in
the Morning
is now on Fox Business Network.)

The Imus show “conflicted with the longterm
plan” of RFD-TV, said Gottsch. “We
needed the time back for the agriculture side
of programming.”

The big-ticket gamble paid off , Gottsch
asserted.

“Putting Imus on, with his big [major-market]
radio following got us meetings. It got our foot
in the door,” he said. Gottsch attributes launches
on such major-market systems as Cox Communications
in Omaha, Neb., and Comcast in
Denver to those post-Imus meetings.

The channel’s growth has not
been limited to the U.S. RFDTV
has launched RURAL
TV, a version of the channel
launched for international markets.
It is carried, for instance,
on British Sky Broadcasting
in
the United Kingdom, New
Zealand, and Brazil with 2011
launches scheduled for Korea,
Holland and Tanzania, Kenya
and South Africa. RURAL
TV programming is proving
to be very popular on a global
basis and is important to
the developing nations with
equestrian and music drawing
audiences in the more developed
countries. RFD-TV
continues to expand its original-
programming slate, with
plans for a national newscast
focused on rural concerns. It
intends to establish a Washington
news desk in the first quarter of next
year, as well as bureaus in Chicago to cover
the Board of Trade and commodities markets,
and even international bureaus in Säo Paulo,
Brazil, and other cities.

The goal: A nightly news show, airing weeknights
at 7:30 p.m. ET, to follow other network
news in most markets. The newcast would
repeat the next morning, before commodity
markets open.

“Today, if there’s an agriculture-related disaster,
like the spread of mad cow disease, networks cover
it. But the rest is not covered, like the issue of
attracting doctors to small towns,” Gottsch said.

That programming is funded through advertising
(though no erectile dysfunction drugs,
a ban instituted by Gottsch) and income from
the channel’s magazine, now at 180,000 subscriptions
and growing at an estimated 20% a
year. Revenue is poured back into programming,
the executive said, including an on-trend offering
in early 2011: a variety show/amateur hour
“hosted” by puppet Shotgun Red.

WHO’S WHO AT RFD-TV

Key executives at Rural Media Group’s RFD-TV:

Patrick Gottsch:

president and founder.

Ed Frazier:

chief executive officer.

Steve Campione:

chief financial officer.

Dave Randell:

senior vice president, advertising sales.

Raquel Gottsch:

executive vice president, corporate communications.

Gatsby Gottsch:

executive vice president, finance.

Kelly Kantz:

vice president, general manager.

September