Diginets Market in the U.S.
MeTV, Grit, Bounce TV, Laff, and Estrella TV are the top diginet services in the United States. The diginet industry in the US is growing on the back of an increasing number of PayTV users cutting the cord and niche and personalized content being offered by industry players. Diginets have also begun offering original content and have evolved into a hybrid advertising model comprising direct-response advertising and standard advertising. The industry has witnessed several acquisitions over the last two years.
TOP 5 PLAYERS
- MeTV (Memorable Entertainment Television) is a classic TV network that was launched in 2005 in the Chicago market (launched nationally in 2010). It is owned by Weigel Broadcasting. MeTV has a 96% national household coverage and 719,000 viewers nationwide.
- MeTV's programs comprise iconic television shows from the past from a wide range of genres. M*A*S*H, Perry Mason, Gunsmoke, Batman, and Star Trek are some TV shows that MeTV airs.
- MeTV's website can be found here.
- The company can also be reached on (312) 705-2600. MeTV's contact form can be found here.
- Grit is a diginet service targeted at a male audience that was launched in 2014. It is owned by Katz Broadcasting (Scripps). Grit has 87% household coverage and 373,000 viewers.
- Grit TV airs TV shows and movies of America's favorite "bold, brave and legendary action heroes." Death Valley Days, Laramie, Zane Grey Theater, Wichita, and North to Alaska are examples of the shows and movies that it telecasts.
- Grit's website can be found here.
- Grit TV can be reached on firstname.lastname@example.org or kbsocial email@example.com. Grit TV's contact form can be found here.
- Bounce TV is diginet service targeted at African Americans that was launched in 2011. It is owned by Scripps. Bounce TV has 88% household coverage and 275,000 viewers.
- Bounce airs "original series, theatrical motion pictures, specials, off-network series and more." Saints & Sinners, Black History, OJ25, Law & Order, Addicted, and Chain Reaction are some shows and movies it runs.
- Bounce TV's website can be found here.
- Bounce TV can be reached on firstname.lastname@example.org or (770) 672-6500. Bounce TV's contact form can be found here.
- Laff is a comedy diginet service that was launched in 2015. It is owned by Katz Broadcasting (Scripps). Laff has 85% household coverage and 223,000 viewers.
- Laff airs sitcoms such as The 70's Show and Home Improvement and comedy movies.
- Laff's website can be found here.
- Laff can be reached on email@example.com or kbsocial firstname.lastname@example.org. The contact form for Laff can be found here.
- Estrella TV is a Spanish-language television network targeted at Hispanics that was launched in 2009. It is owned by Estrella Media and has 235,000 viewers in the US.
- Estrella airs comedy shows, reality TV, music programs, dramas, news, sports, and movies.
- Estrella TV's website can be found here.
- Estrella TV can be reached on email@example.com or (818) 729-5300.
The top diginet services were determined based on Nielsen's 2019 ranking of the most-watched TV networks. The household coverage figures provided are based on data published by TVB in 2017.
Cord-Cutters and Cord-Nevers
- Diginet viewers are typically cord-cutters and cord-nevers as diginet services broadcast shows that non-PayTV households can otherwise only catch on satellite or cable TV.
- Cord-cutters and cord-nevers pair their OTT subscriptions with over-the-air (OTA) antennas. This enables them to create "a virtual cable package composed of over-the-air linear broadcasters, including ABC, CBS, Fox, NBC and The CW, as well as multicast networks, such as MeTV, This TV, Antenna TV, Cozi TV and many more."
- OTA antennas are cheap and are a great option for those "who can’t afford or choose not to subscribe to cable or satellite." They can save the viewer at least $1,000 over pay TV, irrespective of their location in the US.
- Cable and satellite companies have increased subscriber prices over the years to cover the rising cost of programming. In the period 2007-17, the price of pay TV increased 53%-- twice as fast as inflation--to $100.98 (and continued to rise thereafter). This has led to more subscribers opting out of pay TV.
- According to Jonathan Katz, President and CEO of Katz Networks, “it’s a pairing that has organically happened as consumers have combined these two platforms into their own bundle.”
- According to Nielsen, the number of households with a digital antenna and without satellite or cable TV subscriptions grew 50% over an eight-year period to 16 million homes in Jan 2019.
- According to Parks Associates, the percentage of homes "that acquire their TV signals via over-the-air antenna increased" from 16% to 20% between 2015 and 2017.
Niche and Targeted Content
- Cable and satellite typically do not provide sub-channels (except music sub-channels). Even when they do, they provide a limited number of sub-channels that are usually hard-to-find.
- Diginets offer nostalgia shows and programs targeted specifically at distinct audiences. According to Mark Deetjen, General Manager at Buzzr, "we’re all running shows that tap into some sort of nostalgia or some sort of niche audience."
- For example, Grit is a diginet service for a male audience, Quest Networks broadcasts TV shows such as "Ice Road Truckers" and "MythBusters" that are targeted at men, Bounce TV targets an African American audience, Estrella TV and TeleXitos target Hispanics, and Buzzr is a nostalgic game show channel with vintage shows such as “Family Feud,” “Supermarket Sweep,” and “Password”.
- According to Brian Weiss, "VP of Strategy and Distribution" at Cooper Media, when they "built Justice, and then Quest three years later," they looked at "what the options were for viewers across cable and streaming platforms."
- "The true, screaming needs, as far as we were concerned, for over the air was crime. There’s a huge, loyal audience for crime, and there was nothing on broadcast that was 24/7 true crime", said Mr. Weiss.
- There are two segments of cord-cutters: a cost-conscious older audience (median age of 55) that only watch TV via OTA and does not subscribe to OTT services (6.6 million homes) and a younger group (median age of 36) that subscribes to at least one OTT service and seeks personalized entertainment (9.4 million homes). Niche content is especially relevant to the younger group as it seeks personalization.
- While pioneers in the industry largely run classic TV shows, the relatively newer entrants target "niche and young viewers." New diginet service providers continue to tap into underserved markets and new audience groups.
- Though the first real diginet network, Retro, was launched in 2005, the launch of newer diginet channels only picked up pace in the last five-six years. The increase in the number of newer and niche channels has contributed to the growth in the industry.
- Buzzer, getTV, Justice Network, Rev’n, Heroes & Icons, Comet, and Decades are some notable networks that were launched in or after 2014. Among the top 25 digital broadcast networks in 2017, 11 were launched in 2014 or later.
- While the diginet industry largely relies on nostalgia television and niche programming and there are not many players producing original content, there is an emerging trend where new and existing diginet service providers have started producing original content. It is estimated that the proportion of non-pay TV households will increase further to 29% by the end of 2020. The increasing viewer base and improved economics allow for the production of original content.
- According to Michael Kokernak, founder of Across Platforms, as the diginet market matures, "people looking to the next generation of digital television are starting to figure out ways to put original content or newer content on the platform that is going to appeal to a [broader] demo."
- Until Jan 2019, Bounce TV was the only network to produce an original series; however, several multicast networks have started producing original content since then. Bounce TV is also the first digital network to sell its TV series to an OTT provider.
- In March 2019, MeTV, the number one classic television network in America launched Collector's Call, its first original TV series. Circle, a lifestyle and country music network that launched in Jan 2020, has 16 original shows. Court TV launched its first original TV series, OJ25, a 37-part docuseries on OJ Simpsons' trial, in 2020.
- Leading stations have acquired diginet services or partnered with them over the last two years. As "station groups can easily leverage their extra bandwidth across their portfolio of affiliates", the economics favor them says Peter Leitzinger, an analyst at "S&P Global Market Intelligence".
- "Improved encoder technology and the new ATSC 3.0 broadcast standards" also improve prospects for new channels.
- In late 2017, Scripps acquired the remaining 95%--it had a 5% stake earlier--stake in Katz Broadcasting for $292 million and became its sole owner. Tegna acquired Quest and the Justice Network from Cooper Media in May 2019.
- CBS partnered with "Weigel Broadcasting in the Decades diginet in 2015 and Start TV in 2018" and launched its own diginet service, DABL, in September 2019. Opry Entertainment Group and Gray Television launched Circle in Jan 2020.
Hybrid Advertising Model
- With an increasing number of general advertisers purchasing spots on top national networks such as MeTV, the diginet business is evolving from a direct-response advertising model (1-800) to a hybrid model.
- Standard advertising has become more prevalent in the diginet industry as an increasing number of diginet services have become nationally rated.
- The growing popularity of diginet services has seen eight diginets find a place in Nielsen's 2018 "top 100 most-viewed TV networks" in America, a significant change considering that there were no diginets in the top 100 in 2016.