Purchasing a quality playout system will help your station earn more income.
According to TVstartup.com, starting a cable TV channel is probably one of the hardest things to do—but absolutely possible and very lucrative. Cable companies can only carry so many cable channels to their subscribers due to limited bandwidth and the cost of licensing fees, so they only carry the most popular channels. For example, Bob Johnson founded BET (Black Entertainment Television). With a friend’s initial investment of $15,000, as reported by Zeromillion.com, Johnson was able to start BET in 1980, and in 2000 he sold BET to Viacom for $3 billion. This proves that with time and a lot of hard work, you can start your own successful cable TV channel. These following steps will show you what’s required to get your cable channel started.
Develop a Plan
1. Research your market. According to the HowToLaunch.tv website, this information represents the voice of the channel’s audience and takes about six to eight weeks to complete. You can gather this marketing information from industry sources and websites or by seeking advice from someone with experience in starting TV channels.
2. Select a brand and channel name. Your channel name should not only be memorable, but also must capture the idea behind its theme. Your channel’s branding is the image your channel wants to establish.
3. Create a business plan. Many investors will request a copy of your business plan to help them decide if they would like to invest in your channel. Take your time to complete a business plan that is as detailed as possible. Also, use business plan resources, such as the Business Plan Pro software or Bplan.com, to help you create a well-developed business plan for your channel.
4. Create an investor’s presentation. Develop and package a multimedia presentation, such as a Power Point presentation or informational video, of the key information from your business plan. This is a convenient way to shop your channel’s brand to potential investors and carriers.
5. Seek out investors. Investors can come in the form of related businesses that can benefit from your channel’s potential audience, or from your own family and friends. However, HowToLaunch.tv points out that new channels should not expect to break even until around their third year. Be sure that you find investors who are patient and not looking for a quick turnaround on their investment.
6. Find your channel’s main revenue stream. In the beginning, your channel will have to purchase broadcast space, as well as programming; you will need to make enough income to cover these costs. According to NewCoTV.com, some channels utilize a pay-per-view system, while others depend on advertising/sponsorship revenue. Make a list of both creative and traditional means for your channel to create its revenue stream.
7. Keep accurate finance records. As with all other businesses, TV stations are required to pay taxes. Open a business bank account and keep a detailed financial ledger; these will help you and a financial adviser determine which (and how many) taxes your station must pay.
8. Decide on your channel‘s business model. HowtoLaunch.tv lists three traditional models: free to air (such as network TV), subscription (for example, NBA League Pass) and pay-per-view (such as paying to see the big fight on Showtime Sports). Regardless of the model you select for you channel, it is helpful to start out as a free-to-air channel. This will allow your channel to gain an audience.
9. Apply for a broadcasting license from the FCC (Federal Communications Commission). According to FCC.gov, it is illegal to operate a TV station without a license. The FCC requires that all license applicants retain legal counsel and broadcast engineering consultants to perform frequency searches and help prepare the legal and technical portions of the construction permit applications. Be mindful that all application fees must be paid with the submission of any application.
10. Create a content and programming plan for your channel. If you will be producing your own programs for your channel, begin production at least six months before your channel airs. Also, keep in mind that your station can purchase ready-made programs and syndicated television shows and movies.
11. Build your station. The station is the actual location where your TV operations take place, everything from business operations to taping shows. This will require purchasing the right equipment, such as a playout system (which compiles all your programs and transmits them on a single channel) and audio/visual technology (such as cameras and cords). A start-up station can save money on this step by signing a rental/usage agreement with a local TV station, such as with the studio of a local public access channel.
12. Manage the station’s scheduling. Many channels can use an automated system; however, if you have a channel whose programs have unpredictable airing times (such as sports events) you will need to manually operate your playout system. Be mindful that manually operating your playout system is more expensive, due to the manpower it requires. However, effective use of the operating system can be used to increase your income. Keep in mind that the playout system allows TV stations to place logos and mini-ads on screen during TV shows, in addition to allowing you to broadcast in HD (high-definition) and/or use subtitles. These are all services on which your channel can make money via sponsorship.
Acquire Cable Carriage Agreements
13. To get your TV station on cable, you will need to acquire cable carriage agreements with as many cable providers as possible. It’s helpful to begin this process by making a list of cable providers, such as Comcast and Time Warner.
14. Contact the cable providers and request information about establish a carriage agreement with their company. Keep in mind that these companies are only interested in channels that are/or will be popular among viewers. It is important to understand the idea of supply and demand when dealing with cable providers. Beginning stations must be prepared to pay for their airtime; however, when demand for your station rises, you may be able to charge the cable provider to carry your channel.
15. Get legal advice before signing your carriage agreement. Find a lawyer who has experience in entertainment law. Be sure that you understand and agree with all the terms of your agreement contract before you sign.