[Looks like another telecom "teardown", like when Comcast bought TechTV and
shut it down. Case will use Wisdom's current carriage contracts to
distribute something very different.]
July 25, 2005
Case finds Lime twist in Wisdom
By Andrew Wallenstein
The Hollywood Reporter
http://www.hollywoodreporter.com/thr/television/article_display.jsp?vnu_content_id=1000990629
The man who packaged the Internet to the masses is trying his hand at
television, but for a more discriminating audience.
In April, America Online co-founder Steve Case rose from the ashes of his
company's ill-fated merger with Time Warner by declaring his intent to
build a new empire based in the health care industry.
His private holding company, Revolution, has been on a buying binge funded
in part by $500 million of his own fortune. Among the companies acquired
was Wisdom Media Group, a small, family-run cable venture based in
Bluefield, W.Va., not too far from AOL's Dulles, Va., headquarters.
At this past weekend's Cable & Telecommunications Association for Marketing
convention in Philadelphia, Revolution announced plans to rebrand and
relaunch the Wisdom cable channel as the keystone of a multiplatform media
play including radio, Internet, wireless and DVD.
In line with Case's ambitions in the health care business, his media
strategy is aimed at a loosely defined market segment interested in
healthy, eco-friendly goods and services ranging from Whole Foods groceries
to Toyota Prius hybrid vehicles. Known to market researchers by the acronym
LOHAS, or lifestyles of health and sustainability, the group has a spending
power pegged at more than $230 billion.
But Case will have his work cut out for him, notwithstanding the
difficulties independent cable ventures have had amassing significant
distribution. The tens of millions of Americans that comprise the LOHAS
market have proved to be notoriously resistant to television itself, which
falls somewhere between the Twinkie and the Humvee on their list of
favorite inventions.
"If you are used to doing mass-market TV, you are going to run into
trouble," said Paul H. Ray, a leading market researcher studying LOHAS who
wrote the defining text on them in 2001, "The Cultural Creatives." "Their
allergy to hype is huge, and that is the big problem with conventional TV.
It is built around hype."
But Revolution believes they are preparing a more sophisticated approach
appropriate for an audience that has grown too large to dismiss. "This
category has moved out of the subculture and into the mainstream," said the
channel's CEO, C.J. Kettler, who was president of sales and marketing at
the Oxygen network.
Case could not be reached for comment.
By the fourth quarter of the year, Wisdom will be rechristened Lime --
"healthy living with a twist" is the tagline. Complete with wedge-shaped
logo, the brand alludes to the color of the titular citrus, green being
synonymous with ecological concerns. But Lime connotes a "lite" green, as
Kettler puts it, befitting a hipper sensibility the brand aspires to in
hopes of deflating stereotypes associated with such new-age totems as
granola or healing crystals.
"What would be best for us is to take a more unexpected approach to the
category, something with a sense of humor," Kettler said. "The category has
been so serious. We're a media brand, we want to appeal on emotional level."
True to form as an ecologically conscious venture, Revolution is recycling
a used channel to create its own, crafting Lime out of pieces of Wisdom
(mainly its distribution deals), a pact with Sirius Satellite Radio and
1,000 hours of such library programming as "Yoga Zone" and "Lectures With
Deepak Chopra." Kettler plans to add original programming as well as
acquired comedy and drama series or films that have eco-friendly themes.
Another environmentally aware cable magnate, Al Gore, adopted a similar
strategy, acquiring NewsWorld International from Vivendi Universal to be
remade into Current, a youth-targeted network that launches Aug. 1.
With cable operators no longer interested in adding linear channels to
crowded digital lineups, "rebranding an existing channel is a smarter way
of getting distribution than starting from scratch," said Debra Sharon
Davis, a media strategist who also attempted to acquire Wisdom for a
consortium of clients.
Launched in 1998, Wisdom has largely been in a vegetative state since the
death of its founder, cable pioneer Bill Turner, in 2002. Revolution will
harvest carriage agreements with distributors including Comcast and
EchoStar, which will put Lime in 6.5 million homes.
Sources indicate it is Wisdom's deal with Comcast, inherited from the
operator's acquisition of AT&T Broadband, that will enable Case to turn
this cable-industry lemon into Lime. The channel has a place on select
Comcast systems until at least 2009. Comcast and EchoStar declined comment.
Lime is aiming for a breakthrough this category has yet to sustain; bit
players come and go, and such existing channels as Oxygen and Lifetime have
dabbled here. Los Angeles-based Oasis TV is primarily broadband, but the
outfit recently secured video-on-demand deals with Time Warner and Akimbo.
The problem might lie with the nature of the medium. Both programrs and
advertisers tend to rely on the glitz and glibness that the Birkenstock
crowd detest, Ray argues. He believes they favor more plain-spoken
information available via print or Web that rarely translates to TV.
"They've turned to the Internet because they are tired of shlocky
programming," Ray said.
But the timing of Lime could be to its benefit. Corporate America is waking
up to a slice of the population willing to pay a premium for such products
as hybrid vehicles (Toyota, Ford) and energy-efficient appliances (General
Electric) with targeted marketing efforts. Giant food companies like
General Mills quietly are backing boutique gourmet labels.
"Lots of sectors are transforming, and the media has an huge opportunity to
transform as well," Kettler said.
What remains to be seen is as how Lime fits together with the rest of
Case's holdings, which include controlling shares in real estate properties
like Miraval, an Arizona-based wellness resort. A chain of private health
clinics is rumored to be his next project.
"It's still early in the game, but if there's synergies to be had, they
will happen," Kettler said. "Steve is very involved from a strategic
perspective."
================================
George Antunes, Political Science Dept
University of Houston; Houston, TX 77204
Voice: 713-743-3923 Fax: 713-743-3927
antunes at uh dot edu
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