Cable goes local
Rainbow creates 3 NY metro channels
The launch of MSG Metro Channels is the latest sign of Cablevision's strategy of using original local cable programming to both capture new subscribers and prevent existing customers from defecting to competing sat-TV services.
Cablevision was the first company to launch a local cable news channel, New 12 Long Island, and has since created additional regional news channels in other areas it serves.
Rainbow president and CEO Josh Sapan characterized the $100 million investment as "a big-time expenditure for us," but if the MSG Metro Channels follows Rainbow's business plan -- which includes gaining carriage on the New York area cable systems not owned by Cablevision -- the package could be highly profitable in just a few years.
The $100 million represents the total investment earmarked to take Madison Square Garden Metro Channels to break-even, which Sapan said should take just over three years.
The three channels will rely on ad revenue and license fees. Rainbow will seek more than 75¢ per subscriber from area cable operators to carry the three channels.
As part of MSG Metro, Rainbow cut a deal with the New York public TV station WNET for the station to produce six hours a day of original arts programming.
Metro Channels is owned by a partnership of Fox and Liberty Media, which own 40%, and Rainbow Media Holdings, which owns the other 60%. Rainbow Media is itself a partnership of Cablevision Systems (75%) and NBC (25%).
