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Diginets Come of Age

20/11/2018

WHY THIS MATTERS: Diginet purveyors have created multimillion-dollar businesses by converting extra spectrum and at least initially library programming into free over-the-air networks.

Updated: Monday, Nov. 19, 9:15 am PT

As the audience for diginets grows, so do their programming offerings.

And diginets' audiences are growing, make no mistake. While the nets also known as multicast networks got their start due to the availability of spectrum and extra channels when high-definition television came online, they have grown their businesses due to the unexpected rise of so-called cord-cutters and cord-nevers.

Instead of subscribing to expensive cable packages, cord-cutters, or people who abandon their cable subscription, and cord-nevers, or those who've never subscribed to cable in the first place, figure out other ways to watch television. One way that is growing in popularity is pairing inexpensive over-the-air antennas with over-the-top streaming subscriptions.

For example, a user could put an antenna on his house and then subscribe to advertising-supported Hulu for $7.99 per month, thereby creating a virtual cable package composed of over-the-air linear broadcasters, including ABC, CBS, Fox, NBC and The CW, as well as multicast networks, such as MeTV, This TV, Antenna TV, Cozi TV and many more.

The share of U.S. households that acquire their TV signals via over-the-air antenna increased to 20% or about 24 million homes from 16% from early 2015 through the end of 2017, according to Parks Associates data from March.

If you put yourself in the shoes of someone who can't afford or chooses not to subscribe to cable or satellite, an entertainment option with a free price point becomes popular, Katz Networks president and CEO Jonathan Katz said. It's a pairing that has organically happened as consumers have combined these two platforms into their own bundle.

In August 2017, The E.W. Scripps Co. acquired the 95% of Katz it didn't already own, including four multicast networks, Bounce, Escape, Grit and Laff, and subscription streaming service Brown Sugar, for $302 million. With the additional cash infusion, Katz has been able to accelerate its programming acquisitions.

"Scandal"

For example, in November, Bounce acquired all seven seasons of Shonda Rhimes' Scandal from Walt Disney Direct-to-Consumer & International, which it began airing in primetime on Monday, Nov. 12.

Katz also has acquired Disney's According to Jim, to premiere on comedy-focused network Laff in 2019, joining Home Improvement, 3rd Rock From the Sun, That '70s Show, The Drew Carey Show, Night Court, Spin City and more.

On Jan. 1, 2019, female-focused Escape is adding the first 12 seasons of Law & Order and every episode of Boston Legal to a programming lineup that also includes Without a Trace.

And Western network Grit will add Warner Bros.' movie library of Westerns to its schedule.

Bounce also is the first diginet to expand into original scripted series and movies, Katz said.

Over Thanksgiving weekend, it will premiere holiday movie Stone Cold Christmas, a modern and female-driven take on Charles Dickens' A Christmas Carol. On Monday, Jan. 7, it will premiere half-hour series Last Call, starring Empire's Charles Malik Whitfield as an ex-NFL player who opens a comedy club. Last Call joins a slate of original series that includes Saints & Sinners, Family Time and In the Cut.

Netting Nostalgia Viewers

While the Katz networks are growing quickly, the highest-rated and best-distributed diginet continues to be Weigel Broadcasting's MeTV, which airs nostalgia programming such as Charlie's Angels, Big Valley, Bonanza and The Beverly Hillbillies. In the coming months, MeTV will launch its first original program, which it is producing in-house.

Besides MeTV, Weigel offers diginets Heroes & Icons, Movies and Decades. MeTV was one of the first diginets to launch and continues to offer nostalgia fare, along with competitors such as This TV, Antenna TV and Cozi TV.

In September, Weigel launched Start TV in partnership with the CBS-owned stations. The network airs scripted crime dramas that target women, such as The Closer, The Division, Early Edition, Family Law, Joan of Arcadia, Medium, Profiler, Touched by an Angel and Dr. Quinn, Medicine Woman.

Start TV already has done well enough that it will be nationally rated by Nielsen come December. In January, it will add five shows to the schedule, including The Good Wife and Crossing Jordan.

We continue to schedule dramas with women in leading and significant roles, Weigel vice chairman Neal Sabin said. That's one of the reasons we think the network has resonated so well with women. The network was correctly positioned at the right time.

Another network that got its start largely as a nostalgia net, NBCUniversal's Cozi TV, is starting to program more recent series. On Jan. 1, it will launch sitcom The Office.

It's a bold, innovative show that has proven to be rewatchable and has such a fan following, Cozi TV senior VP Meredith McGinn said.

"Little House on the Prairie"

Cozi airs classic sitcoms in primetime blocks, having found that viewers stick around for them. During the day, it airs dramas such as Murder, She Wrote and Little House on the Prairie. The diginet is available in more than 90 million homes and in 82% of the U.S.

The flip side of the Cozi coin is Spanish-language diginet TeleXitos, which launched in December 2014 and offers classic English-language series and movies dubbed in Spanish. So, U.S. Hispanics who enjoyed shows such as Miami Vice and Law & Order when they were growing up in their home countries can enjoy those shows again in their native language and with their families. TeleXitos just debuted Buffy the Vampire Slayer, also dubbed in Spanish.

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