The Explosion of Broadcast Diginet Channels

The Explosion of Broadcast Diginet Channels
It all started with the Digital Transition and Public Safety Act of 2005. Four years after the U.S. Congress enacted this legislation, analog television broadcasts ended and digital television became the official standard.

Now, almost 10 years after President George W. Bush signed the bill, a new channel format has been effervescing.

Diginets, also known as digital subchannels, “dot-twos” and multicasts, are a business model that many broadcasters are pursuing.

How does it work? Essentially, as a result of the federal mandate, a higher amount of data can be transmitted in a TV signal.

"What happened when we went from analog to digital," said Nik Miles, creative services manager for KRCW, "is TV stations could pack a lot more into their signal. We get a piece of bandwidth and we're able to divide our signal to give our viewers more than a single TV station."

Stations will lease out the signal to subchannels, which only seems to be beneficial.

“The stations aren't paying anything for the programming, and all they're doing is sharing the sales revenue," Mark Fratrik, SVP, and chief economist at the research firm BIA/Kelsey told Adweek.

“The appeal of subchannel leases is that it is a simple real estate transaction,” adds Michael Kokernak, CEO of Across Platforms. “As long as the tenant keeps paying the bills, it is a turnkey operation for the station owner.”

Generally, the programming on diginets tends to be nostalgic: re-runs of vintage shows like “I Dream of Jeannie,” “The Munsters” and “The Beverly Hillbillies” air on channels with names like Antenna TV, Cozi TV and Decades.

"You may laugh at 'Charlie's Angels,' 'Gilligan's Island,' 'The Odd Couple' or 'Little House on the Prairie,' but guess what? There is a huge audience that is willing to watch them," Ken Werner, president of Warner Bros. Domestic Television Distribution, tells the LA Times. "Way back when television was designed for the entire family with one TV, everybody in the business was focused on developing shows that had broad appeal to everyone, and that continues to have efficacies.”

“Diginets have created a viable business model for over-the-air channels that are delivering programming which, in some cases, was either not previously available on TV and/or not being sufficiently monetized,” Werner continued.

And therein lies the allure for advertisers – the diginet audience is made up of a key older demographic.

“From the advertiser’s perspective, [diginets] can be useful in targeting a very specific segment of viewers," said Brad Adgate, SVP and director of research for the media buying agency Horizon Media.

Currently, only two diginets are tracked by Nielsen, MeTV and Bounce TV, so for the time being, Adgate describes subchannel advertising as “concept sells.”

Who else likes diginets? Hollywood studios, which can license out their content for a fee – content which previously was believed to have little value.

However, one issue that diginets seem to be encountering is placement on satellite services.

DirecTV and Dish Network have declined carriage due to “limited spot beam capacity,” however with DirecTV’s recent merger with AT&T U-Verse, it certainly seems possible this could change.

Author: Brian Cameron

Image via Shutterstock

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