December 10, 2012
Entertainment Studios Launches 24-Hour Court and Legal News Network
By Kaylee Hultgren
Entertainment Studios is launching a new 24-hour HD court and legal news network today called Justice Central. Launching on AT&T U-verse systems, the network features courtroom shows, live proceedings and legal talk shows around the clock. CableFAX spoke with Founder/Chairman/CEO Byron Allen about the network’s content, its distribution goals and the advantages of creating a network with no sub fees.
Why do you think this is the right time to launch a court and legal news network?
It’s the right time for a number of reasons. The audience loves court. It’s older than television. It goes back to [when] everybody sat around the radio and listened to the Lindbergh trail, and then went to the movie theaters and watched the news reels. It’s the second highest rated drama on daytime television, and there isn’t at this point a 24-7 HD-dedicated court and legal news channel. So that’s key—the audience really appreciates this drama and has an insatiable appetite for it.
It’s also the perfect timing because of the way we’re launching it. It’s a 10-year deal, no sub fees. And that’s unusual. I’m listening very closely to Glenn Britt of Time Warner [Cable] and Michael White of DirecTV and I agree with them—we must bring down content costs. We can’t keep saying it, we have to just do it. You don’t print money, you shift it. What’s happening now [is that] money needs to be shifted over to retrans deals because the broadcast television stations must be included, and sports—they’re going to get the priority, they’re going to get the dollars. So we’re saying, ok while that’s happening we need to also inject networks into the ecosystem that don’t cost money. The subscriber will only tolerate so much and we have to keep the cost in line so that we can keep them on the platforms.
You’re launching on AT&T U-verse. Where else are you seeking distribution?
AT&T is launching us on their family tier, which is more than 4 million subs, and obviously they’re growing very rapidly. We felt they were the perfect launch platform given their new allocation of approximately $14 billion to pass another 33 million homes. They’re extremely serious about the business. We are already down the line with other platforms and having very healthy, advanced conversations and negotiations with other platforms that really appreciate the genre of a 24-hour HD court and legal news channel—and really appreciate that it’s a 10-year deal with no sub fees. I’m highly confident we’ll have this network up to 80+ million homes in less than 24 months.
MVPDs like Time Warner Cable have been hinting that expensive, under performing networks may be dropped.
We’re addressing the market needs. I do believe that networks that have a fee will get dropped. Mathematically, that’s what’s going to happen. If a cable network is only getting X number of viewers, they’re going to start to drop them. The numbers are extraordinary. Let’s say someone has 20 million subs. And let’s say they pick up our network and it allows them to get an audience and engage the audience, since it’s something that’s not there in a significant way at this point, and we save them a 10 cents a sub. That’s $2 million a month… When these companies are trading at anywhere from 10-20 multiples, you’re adding a quarter to a half a billion dollars to their market cap, because it’s money that you’re saving. When they spend a dime a sub, it really impacts the value of your company.
How are you able to not charge sub fees?
It’s a real simple equation. It’s advertising supported. A lot of these cable networks can do what they’re doing, with the exception of sports, which has very expensive sports rights. They can do this for the ad dollars. You’ve got cable networks out there that are generating a couple hundred thousand viewers a day and taking in $300 million in revenue and $100 million in sub fees and $200 million in ad dollars. You can produce the content you need to produce to generate a couple hundred thousand viewers a day with the $200 million in ad dollars.
We’re at a very unique place at this time in our industry. I think a lot of MVPDs were caught a bit by surprise by the retrans fees, and having to work with that and the escalating sports, there has to be some give. We think this is a great way to start the process of balancing it out, keep the offering robust and at the same time keep the cost in line.
Your content is produced in-house. That’s an advantage when it comes to distribution across multiple platforms.
We’re able to offer 100% authentication, so when we’re engaging with platforms we’re able to give them content that they can offer as TV Everywhere.
Are there other platforms you plan to use and will you create content specifically for them?
No, we’re really working closely with the MVPDs to help enhance their television everywhere.
In addition to the court TV shows announced today, will there be additional programming?
We’ve got our court shows, which are “America’s Court with Judge Ross,” Emmy-nominated and in its second year, “We the People with Gloria Allred,” Emmy-nominated for her first year on the air, “Justice for All with Judge Cristina Perez,” she has won the Emmy three consecutive years and we just signed “Supreme Justice with Judge Karen.” They are unbelievable talent and they bring expertise to our network immediately with their analysis. We will be covering live legal proceedings—those trials that unfortunately come around, a couple every year. So that’s your legal news coverage. We also have documentaries—stories about trials and murder mysteries. Also, talk shows that focus on what’s going on in the world legally and what’s going on in the world legally in Hollywood. And the celebrities here give us no shortage to work with or talk about.