BTNC Business Plan PDF
BTNC Business Plan PDF
BTNC Business Plan PDF
1
J.C. Watts, Jr. Mr. Watts is a graduate of the temporary three-year period. At the beginning of
University of Oklahomas College of Journalism, a the networks fourth year of operation, BTNC will
celebrated athlete, an ordained minister, a popular convert to a traditional for-profit commercial
television commentator and a successful channel. Once BTNC converts to a traditional
entrepreneur. Mr. Watts offers BTNC a lifetime of full commercial channel, the network plans to
experience and relationships in business, political collect a $.14 per subscriber per month license fee.
and black communities. Bob Brillante, co- Collection of license fees will increase revenues by
manager, and Frank Watson, vice president/general more than $69 million annually. Revenues
manager, are in charge of BTNCs operations. Mr. generated by BTNCs eMall merchandising service,
Brillante is a 35-year cable television veteran. In mobile streaming, commercial production services,
1998, Mr. Brillante founded Floridas News HDTV simulcast license fees, and video news and
Channel (FNC), building the nations first all- entertainment podcasts are not represented on the
digital news gathering and television production Ten Years Source and Use of Funds financial
facility. FNC pioneered the use of high-tech forecast. BTNCs healthy subscriber base and
robust subscriber growth are at the foundation of
the networks strong equity valuation. BTNCs
plan to launch as a public interest channel will
provide the network 22.5 million satellite TV
homes at launch. In addition, BTNCs ability to
reach the nations African American households
through its faith-based and historical black
colleges marketing alliances promises strong
subscriber lift for its satellite distribution
partners, Dish Network and DirecTV.
Cable televisions multi-
virtual reality news environments and switched system operators (MSOs) such as Comcast and
broadband video transmissions. Mr. Brillantes Time Warner Cable were enticed to provide
creative use of content partnerships and high-tech carriage for BTNCs programming for two obvious
television transmission and production reasons: (1) MSOs want to avoid the migration of
technologies propelled Floridas News Channel to their 17 million African American cable TV
the forefront of the nations regional news customers from terrestrial cable service to satellite
channels. Mr. Watson has 30 years of experience TV; and (2) MSOs are required to satisfy diversity
in broadcast operations, and he has managed and pro-competition legislative and regulatory
ground-up projects involving leading edge obligations. This regulatory oversight has been
technology in radio, television and the Internet. adapted to protect independent networks such as
BTNC promises attractive equity growth and BTNC. The recent NBC/Universal acquisition by
strong cash flow for its investors because of its (1) Comcast Cable has focused the attention of
launch to more than 35 million TV households; (2) regulators and policy makers on the current dearth
tested and proven programming models; (3) cost of cable programming options available to the
saving content partnerships; (4) operational nations most veracious consumers of cable tv
efficiencies and multiple revenue streams. BTNC programming.
will launch as a public interest channel for a
2
Strong Equity Growth underwriting and advertising sales are greatly
influenced by external factors. Therefore, BTNCs
During the past five years, the sale of
revenue forecast is based on the following four
established cable TV networks has ranged in value
considerations:
between $54 and $60 per subscriber. Using this
1. Most newly launched networks tend to over
price per subscriber benchmark, BTNCs valuation estimate the markets response to its relatively
at launch will be an impressive $1.8 to $2.0 billion. unproven product without a history of verifiable
With these numbers in mind, BTNC is seeking $15 audience ratings.
million for startup operating expenses; and an 2. The sale of BTNCs overnight time periods
amount significant to cover operating cash flow to prepaid gospel programmers,
challenges during the Public Interest launch period. inspirational television ministries and
commercial programming brokers
Ten Year Sources & provides a predictable revenue
stream. Adult African Americans
Uses of Funds Forecast are an extremely attractive target
Unlike the networks
audience for gospel and
operational expenses that can
inspirational programmers.
be controlled by an
BTNC has already received an
experienced management
multi-million dollar offer to
team, enhanced
Source: Nielsen Report, The State of the African-American Consumer, September 2011.
3
Refer to the Financial section of
4
purchase its overnight advertising availabilities. overall. However, none of the currently available
3. Several marquee brand companies are expressing television news channels place among the top 20
interest in sponsoring programs on BTNC, rated networks for African Americans.
including those companies that participated in the In addition to watching more television more
trial period. This interest is extremely often, African Americans have significantly
encouraging. different viewing habits from any other culture.
4. The availability and growth of culturally-specific African Americans are less dependent on
advertising dollars targeting African Americans appointment viewing habits, according to a 2012
between the ages of 25 and 54 years of age, as well Nielsen Research Study. In other words, African
as the absence of original television programs Americans are a perfect fit for a 24-hour news
serving this audience today, creates an attractive programming service because they tune in
environment for BTNCs market entry. throughout the day and evening rather than simply
during certain regularly scheduled program
Subscription Televisions Most hours.
It seems that the African American community
Valuable Customers is not only a highly valued audience for televisions
Currently, African Americans spend nearly $5
advertisers, but also a highly interested audience.
billion per year on subscription television services.
According to a study conducted among 4,000
5
growing at a faster rate than any other group, a than 70% of the increase in national purchasing
trend that has been sustained every year for the past power during this period will come from African
15 years. African American homeownership reached Americans, potentially making the African
an all-time high. For the first time in the nations American economy the sixth largest in the world
history, more than 50% of the African American by 2020.
population owns a home. According to the 2011 The explosive growth of black entrepreneurship
Nielsen Report on African American earnings, the is creating new advertising and merchandising
number of African American households earning opportunities every day. Black-owned businesses
$75,000 or more grew by 63.9%, a rate 11.7% greater are the fastest growing segments of the American
than the change in the overall population, between economy, according to the U.S. Commerce
2000 and 2009. Additionally, the percentage of Departments Minority Business Development
households earning $50,000 or less has decreased, Agency. The number of black-owned businesses
representing a full shift upward in the income of the has grown by an impressive 45% since 1997, more
overall community. than four times the national rate for all businesses.
Even during these troubling economic times,
the impressive growth of the African American Dissatisfaction of the Target
market is expected to continue into the foreseeable
future. The African American population is
Market with Current Product
projected to grow at three times the rate of the non- Offerings
minority population for the next 12 years, resulting It seems that while the nation is becoming more
in an African American population of more than diverse, broadcast televisionin particular
47.5 million people by year 2020. Likewise, more television newsis not. A majority of African
Americans believe that television news focuses
6
negatively on their communities and perpetuates
stereotypes. African Americans feel they are only
represented in stories involving crime, drugs, and
black-on-white homicide. Although examples of
this disservice abound, a few of the more telling
statistics show that:
While homicides within the African American
community decreased by 33%
over the past decade,
television
news coverage of
those homicides
increased 473%;
While less than 1% of all arrests
are black-on-white homicides, these
arrests represent more than 30% of
television crime news coverage; and
African American spokespersons tend to be
ghetto-ized to sports and entertainment
news coverage.
A one week audit of television news sound
bites on the economy, foreign affairs, politics,
those
and sports and entertainment shows the
polled say it is
following:
very important
to have a news
News Topic White Black
channel programmed for
Sound Bites Sound Bites
African Americans.
Foreign Affairs 99 1
Economics 86 1
Electoral Politics 79 0 Considerable Demand
Sports & Entertainment 35 11 for the Product
Source: Entman-Rojecki Index of Race and the As mentioned previously, more than 80%
Media of African Americans polled say it is very
important to have a news channel programmed
Dissatisfaction with traditional television news for African Americans. African Americans, who
among African Americans is very realand comprise roughly 13% of the general population,
growing. Almost unanimously, African Americans will switch to culturally-specific programming and
are aware of the importance of how they are away from non-African American oriented
represented in tele-vision newscasts, with more programming with a 250% greater frequency than
than 70% of those polled saying it is very any other consumer segment. Unfortunately, the
important to have a fair portrayal of African programming African Americans have been
Americans in television news. More than 80% of provided, to date, is merely a TV ghetto of
7 sitcoms.
8
African Americans watch more television than
any other group. Not only does the average
African American household have four or more
televisions, but also spends an average of seven
hours 12 minutes each dayor 213 hours per
monthwatching them. This amounts to
about 40% more viewing time than
the rest of the population.
Source: Nielsen Report, The State of the African-
American Consumer, September 2011.
African American TV viewers are extremely American men. Even as early as 2001, a
loyal to programming that accurately represents quantitative and qualitative viewing study
them. Each of the top 10 rated shows among conducted by Florida State University found that
African Americans features black casts and black the representation of African American women in
lead characters. the audience for Floridas News Channel indexed
Considerable research has been conducted over far above their representation in the overall viewing
the past decade concerning the lack of African population. African American women comprised
American cable programming and the predictable 22% of all women in the markets surveyed.
cry for parity from within the African American However, as a percentage of the weekly audience
community. Much of this research appears in for Floridas News Channel, African American
academic journals and media trade publications. A women ranged between 24.4% and 45.8%. The
sampling of this research has been compiled by qualitative side of the study reveals that many of
BTNC and is available upon request. Several studies these female African American viewers watched
conducted in the aftermath of Hurricane Katrina Floridas News Channel exclusively for their news.
look into the impact of negative imagery and Before the launch of Floridas News Channel,
stereotyping of African Americans by mainstream these African American females had been lighter,
media news, particularly as it relates to political, or non-existent, news viewers. The respondents cite
economic and social policy. The findings are Floridas News Channels de-emphasis of violent
alarming! crime coverage; the presence of an African
Research conducted by Nielsen and Simmons American lead anchor, Gordon Graham; and live
demonstrates an attractive opportunity to create coverage of events with particular interest to
new and incremental news audiences among African African Americans as the reasons for their viewing
American women and among middle-aged African behavior.
9
African American adult women continue to be African American households, the risks involved in
a prime demographic target for Black Television not meeting the demand of African Americans for
News Channel. African American adult women are a more representative news network are enormous.
also a prime target for culturally-specific On the broadcast network side of the industry,
advertising on BTNC. a limitless news appetite manifests itself in the
consistently high ratings of news magazine
Industry and Market Trends shows like 60 Minutes, Dateline and 20/20and, to
some extent, the popularity of non-scripted
Support the Introduction reality shows like Survivor and The Apprentice.
of the Product However, none of these broadcast shows accurately
At the center of the business case for launching represents African Americans nor targets African
Black Television News Channel is the strong Americans as a viewing audience. The same can
overall demand for news programming and the said of cable news networks.
subsequent high profitability of news channels. Black Entertainment Television (BET), the
Also at the center of the business case for long-time single outpost of African American
launching BTNC is the fact that African programming, essentially abandoned news
Americans are both subscription televisions most coverage and the African American audience over
profitable consumers and subscription televisions 25-years-old when the network revamped its
most severely under-served customers. For the programming line-up following its acquisition by
cable television industry that serves 17 million media giant Viacom.
10
An environmental scan of todays television BTNCs distribution strategy was to ensure that
programming reveals a sizeable gap waiting to be the network is launched on Dish Network and
filled by news-oriented programming that targets DirecTV as a public interest channel to 22.5 million
African American adults abandoned by BET and households. With this subscriber count, BTNC
culturally misrepresented by mainstream television can aggressively compete for national underwriting
news. Furthermore, studies show that African and corporate sponsorships. BTNCs distribution
American targeted advertising, today, exceeds $4 agreement with cable TV giant, Comcast, will
billion, despite the relative absence of television enable the network to reach 52 percent of the
venues serving black adults. Magna Globals nations African American households.
Director of Industry Analysis, Brian Wieser, states
that cultural self-identity and ethnicity has Widespread Social
become an increasingly important fourth
dimension [of marketing] for the media along with
and Political Support
BTNC has garnered widespread political and
gender, age and personal interests. regulatory support at each level of government.
Three major rulings at the Federal
Innovative Launch Strategy Communications Commission (FCC)
Public Interest Channel adopted this past summer will
LaunchThe success significantly advance the financial
of a cable network gains of BTNC.
can be measured This summer began with the
by its ability to FCCs announcement of new and
acquire distribu- very detailed programming
tion, attract viewers carriage rules that specifically
and sell its prohibit cable TV operators
advertising from demanding the
payment of launch
availabilities.
support and/or equity
Success begins
ownership of an
with distribution.
unaffiliated
The first step of
11
network in return for carriage. This ruling could BTNCs concerns of channel positioning.
save BTNC millions of dollars. Newscorp paid a Channel positioning can be vitally important to the
reported $450 million in what the industry success of a newly launched cable network. The
described as launch support dollars to secure FCCs ruling requires a cable TV distributor to
access to 45 million cable TV and satellite homes. provide newly launched news channels, such as
TV One, an African American targeted BTNC, a favorable position on the channel lineup.
entertainment channel, gave Comcast 49 percent of Coining the term neighborhooding, the FCC has
the networks equity in order to secure its cable TV cited the importance of placing a newly launched
carriage. cable news network adjacent to (or in the
A major development in the launch of neighborhood of) other news channels, such as
independent networks was announced on August Fox News, CNN, CNBC, MSMBC, and
1, 2011 when the FCC promulgated its intention to Bloomberg News.
make it easier for independent television At the state and municipal level, BTNC has
programmers (such as BTNC) to get their channels been offered state sales tax abatement, local
carried on cable system lineups and to prevent franchise fee abatement, property tax discounts,
cable companies from discriminating against and payroll tax assistance. In addition, BTNC will
independent channels that may compete with their benefit from various job training and employment
own networks. Both Time Warner and Comcast assistance programs offered by the District of
provide nationwide distribution and pay handsome Columbias Economic Development Counsel.
license fees (between $.32 and $.75 per subscriber, Multichannel News, subscription televisions
per month) to their affiliated news channels CNN, most widely reviewed trade magazine, printed a
CNN Headline News, MSNBC, and CNBC, special report on ethnic programming recognizing
respectively. BTNC should be afforded the dearth of African American programming
comparable distribution and license fee payments. currently available. The trade magazines special
The FCCs most recent decision was report stated: One market that both cable and
announced on August 31, 2011 and addressed
satellite seem to be overlooking is African
12
Americans. While there [are] more than 70
Hispanic channels, only a half-dozen specifically
target African American viewers. And major cable
and satellite providers offer no African American The black church has started
programming packages. Thats despite the fact that transforming itself. The increasing prosperity
African American customers spend more on cable of African Americans in the 1990s and consequent
than any other group. migration to the suburbs has contributed to the
rise of black mega churches. These churches are
A Creative Plan for Growth characterized by congregation memberships
BTNCs Faith-Based Marketing Alliance ranging from 10,000 to 25,000 members, arena-
Pollster George Gallup notes that black sized sanctuaries, wholly owned business
Americans are the most religious people in subsidiaries, and high-tech television ministries.
America. Gallup surveys find that 82% of black Black ministries are being asked to use their
Americans are church members (vs. 67% of white vast resources to promote Black Television News
Americans); 82% of black Americans state that Channel to their congregations. African American
religion is very important in their life (versus clergymen view BTNC as a ministry capable of
55% of white Americans); and 86% of black reversing decades-old negative media images of
Americans feel that religion can answer all of African Americans. Likewise, African American
todays problems (versus 60% of white clergymen believe BTNC provides a highly credible
Americans). The eight major black religious platform for values-based, pro-social messages.
denominations, alone, encompass more than
65,000 churches and more than 30 million Original ProgrammingTested
members.
and Proven Audience Appeal
Black ministries wield unchallenged influence
Black Television News Channel creates strong
over their congregations. Black ministers hold a
viewer loyalty by instilling a sense of ownership
lofty status among their people because they play
among its viewers. The brand identification tag line
the role of dual interpreter. Simply put, black
for Black Television News Channel is Our Voice.
ministers are socially bilingual, with an ability to
By positioning the network as Our Voice in the
communicate across racial lines. Likewise, the
mind of viewers, BTNC encourages the perception
cultural expectation that ministers can
of ownership and involvement. Simply put, if
communicate across racial lines gives them
consumers feel they have a stake in the products
considerable social and political clout.
13
success and are involved in the products design, The typical programming day for Black
then they remain loyal to the product. Television News Channel consists of 12 hours per
In a 100-channel plus environment, it is critical day of news, six hours per day of feature prime
that the newswheel and prime time feature time programming, and six hours per day of paid,
programming contain instantly recognizable and overnight gospel programming.
understandable content; and the content The networks prime time block will feature
complements, rather than competes with, the three one-hour news-talk programs. Each of the
networks brand identity. The content for each of feature news-talk programs addresses the social,
the networks newswheel modules is based on well- healthcare, political and topical interests of the day
researched African American viewer preferences; with entertaining hosts, analysts and special guests.
and each newswheel module is refreshed every half The prime time block repeats from 9 p.m. until
hour. Each modules title, and the title of each of midnight. Early mornings and other non-prime
the recurring programming segments, incorporates time feature programs showcase hometown heroes,
the brands ownership attribute with the use of the profile black leaders and address the educational,
word our. historical and inspirational needs of black youth.
The format for BTNCs prime time BTNCs Cost Saving Content Partnership
programming consists of flexible report out NetworkBlack Television News Channel is
styles, including stand-ups, voice-overs, live creating strong and diverse content partnerships
interviews, archival footage, viewer call-in, and across a wide spectrum of news sources. BTNC
investigative reporting. At the same time, the will function more as an aggregator of African
rundown is rigid with regularly scheduled segments American news from diverse sources and less as a
within each show. producer of news in the traditional sense. A
14
number of technological and marketplace factors events that appeal to the broadest audience
afford BTNC the opportunity to tap into a deep possible, often ignoring stories or news that is of
and wide pool of content from multiple sources, as interest to African Americans. Unlike other news
well as produce a high definition news product at a networks, BTNC provides coverage of events and
fraction of the cost of traditional approaches. The activities of specific interest and cultural
Political Network incorporates live and pre- significance to African Americans.
produced material from the nations most respected
African American public policy organizations and Private-Public Partnership with
the members of the Congressional Black Caucus. Historical Black Colleges and
The Education Network utilizes the considerable
resources of the nations 103 Historically Black
Universities (HBCUs)
BTNCs core mission is to produce original
Colleges and Universities (HBCUs). The
television and broadband content designed to
Radio/Television Broadcast Affiliate Network inform, educate, inspire, and empower our African
covers every corner of the nation with more than American communities. Whereas this mission,
250 local broadcast television stations, cable TV itself, is a noble one, there are also many benefits
networks and radio news affiliates. The that will be afforded to BTNCs public
Newspaper/Magazine Network draws on the partnersthe 103 Historical Black Colleges and
nations oldest federation of more than 200 African Universities, including Florida A&Ms renown
American community newspapers and six leading College of Journalism. Some of these benefits are
African American periodicals. listed below.
Analysis and ViewpointsAll journalists are Facilities upgrade. BTNC will contribute
prejudiced by their own lifes experiences. These more than $4 million to the improvement and
biases can be very subtle or blatantly obvious. enhancement of the HBCUs broadcasting
Nonetheless, these biases influence the way events facilities. The enhancements will include an HDTV
studio upgrade, virtual reality production facilities,
and news stories are presented to readers and
and a fully functional newsroom system. Students
viewers. BTNC is the only television news network
will experience real world skills training in a state-
with news programming gathered, written,
of-the-art broadcast news environment.
produced, and presented by people of color for Long-term financial contribution. BTNC will
people of color. BTNC will provide a unique contribute up to 2.5 percent of its
and comprehensive platform from which annual earnings to support HUBCUs
African Americans can engage in the Colleges of Communications.
political, social and
economic debate of the
country. BTNC will be
the true voice of the
African American
community.
Topics and FocusExisting
broadcast and cable news
networks select news stories and
15
National and international recognition. BTNC about every area of interest to BTNCs audience
will provide national and international recognition (e.g. health, Constitutional law, economics, African
for the 103 HBCUs. Faculty, alumni, and students American culture, theology, science, education,
will be able to access a mainstream media outlet to history, psychology, etc.). The Association of
demonstrate their talents, talk about their HBCU Schools of Journalism has offered to
achievements, promote their causes, and more. organize faculty and alumni from 103 historical
BTNC will provide HBCUs the opportunity to black colleges across the country to support the
highlight staff, authors, musicians, artists, athletes, production of BTNCs daily programming. Access
inventors, and others. to this rich and diverse pool of on-air contributing
Job placement. Employment with BTNC and analysts will save BTNC more than $1 million of
its affiliated companies will offer HBCU students operating cost annually.
an attractive career in the fields of Charitable giving strategy. Historical black
communications, journalism, television production, colleges are well established and respected
marketing, and advertising sales. institutions serving the African American
Student fellowship/internship/mentor community. BTNCs public/private partnership
programs. BTNC will provide career path training with the historical black colleges will generate a
through a variety of financial and in-kind great deal of goodwill among African American
contributions. opinion elites including local, state, and federal
Brick and mortar. The renown Florida lawmakers and regulators.
A&Ms College of Communications has offered Promotion of BTNC programming. The
BTNC unrestricted access to its newly constructed historical black colleges are one of the African
broadcast facility housed on the FAMU campus. American communitys most revered institutions.
This facility includes eight digital edit suites, two Second only to our nations black ministries,
Sony production studios, a sound room, and more. historical black colleges influence the lives of more
FAMU will also provide BTNC office space for up black people in this country than any other venue.
to 20 of BTNCs production and engineering staff. This network of college campuses, broadcast
Other historical black colleges will house BTNC facilities, and alumni publications will enable
field reporters. The FAMU facility, alone, will save BTNC to widely promote its educational
BTNC in excess of $7 million. programming, special events, and broadband
Student talent. Historical black college services.
student talent will conduct research to support
BTNCs feature programs; populate the Web with
blogs; fulfill many of BTNCs studio production
BTNC.TV Broadband and Mobile
needs; produce graphic teasers/bumps; support Data Services
BTNCs part-time field photographers; and Once at the epicenter of the digital divide,
support the development and maintenance of African Americans are today 30% more likely to
BTNCs broadband offerings. FAMUs faculty and download video via the Internet than other ethnic
student population can save BTNC more than communities. According to the 2011 Nielsen
$500,000 each year. Report, 54% of African Americans owned a smart
Network of on-air contributing analysts. phone, and African Americans tended to be
Historical black college faculty and alumni will heavier users of mobile data features. The Nielsen
offer BTNC access to a rich and diverse pool of Company reports that on average
academic experts, analysts and specialists in just African Americans utilize
16
their smart phones more than other demographics Black Television News Channel is an attractive
for features such as texting, Internet access, and opportunity for wise investors because even
mobile video downloads. conservative revenue forecasts show strong
BTNC will leverage its promotional properties financial returns and healthy equity growth.
to position its online and mobile data service as the Likewise, BTNCs target audience is, economically,
sole destination for African Americans to access all
the largest and fastest growing market in the
forms of digital ontent. BTNC.TV will provide a
country today. So there are both viable industry
dynamic platform for African Americans to access
and market trends that strongly support the
news in an interactive setting. BTNC.TVs virtual
mall will specifically target African Americans with introduction of BTNC to the marketplace and
a wide variety of consumer products, as well as considerable demand for the product by the
offer shoppers the opportunity to evaluate African American community that has grown
products and services. African Americans will also weary and dissatisfied with programming options
use BTNC.TVs social network to express that do not reflect the needs, values or reality of
themselves on blogs or through user generated black men and women.
(UGEN) video. BTNC.TV, like BTNCs enhanced BTNC plans to launch 35.2 million households
TV services, will convert the passive television at the starting gate. This strategy, along with active
viewer into an active, dynamic user by creating a participation in legislative and regulatory efforts to
culturally specific portal capable of providing promote diversity, has gained widespread support
access to information, products, and services among elected government officials, consumer
desired by African Americans. advocacy groups and Americas opinion elite.
Building on its unique launch strategy, BTNC
Conclusion charters new avenues for growth by partnering with
BTNC commits to provide intelligent
Americas black faith-based community and
programming that informs and educates, while
Historical Black Colleges and Universities to forge
serving to entertain, inspire and empower its
an innovative marketing alliance that grows new
African American viewing audience. The
viewers at a substantial rate.
framework for BTNC was tested and proven
Finally, Black Television News Channel
during an 18-month trial period that rendered solid
clenches its success in the marketplace by following
operational models, innovative program concepts,
through on its original mission. The network sets
and a highly experienced management team. A
a high standard of programming integrity by
creative and new approach to developing
remaining a television news network with news
newsgathering content partnerships and utilizing
programming gathered, written, produced and
production technologies allows BTNC to generate
presented by people of color for people of color;
original programming that caters to the needs,
and nothing less.
interests, and viewing habits of African Americans,
subscription televisions most valuable customer.
17
18