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Stabroek News

Funding hinders cable TV
published: Sunday | April 2, 2006

Internet cable being laid for Flow Communications. The communications company will offer over 250 channels via digital cable service.

Ingrid Riley, Contributor

CHRISTOPHER CHAPLIN is a successful deal maker, who represents on behalf of Caribbean FILM/TV content creators to online and offline media content distributors in the United States, Africa and Europe.

He is Jamaican by birth and has lived in Philadelphia for years. He was also the man who launched Lycos Caribbean a few years back. We spoke to him about the state of Caribbean Cable TV.

IR: What is the current state of Jamaica's Cable TV Industry as you've come to understand it?

CC: There has been significant and indeed impressive growth in the number of local channels serving Jamaica.

While the increase in quantity has been impressive, visual and technical quality has not been as impressive.

This is attributable to several reasons but the main reasons (and the reasons are interrelated), are:

  • Lack of access to capital

  • The inability of these channels to advertise.

    I must say that I am very optimistic about the future for Jamaican, and indeed Caribbean, television programming.

    There are at least three Caribbean oriented cable and satellite television channels, that I know of, slated for launch in the United States within the next six months and each channel brings a different viewpoint to the table.

    Additionally, I believe you will be able to see Caribbean television programming on other general interest channels around the world on an ongoing basis in the future.

    I am not as optimistic about the long-term future of specific local cable television channels.

    I believe those that survive will be those that have taken the steps to expand globally, either through direct investment in distribution and ownership or through striking distribution deals with global television operators.

    IR: What needs to be in place for the industry to thrive based in Jamaica, serving Jamaica, but reaching the world?

    CC: The basic requirements are already in place, that is, talented and creative people, and a globally attractive culture. The additional things needed to be in place, in my opinion, are:

  • Lower distribution costs.

  • Access to capital/the ability to advertise.

    By lower distribution costs, I refer to the costs of distributing these channels worldwide from Jamaica.

    As it stands now, the ideal situation would be to distribute these channels to cable and satellite platforms worldwide from Jamaica.

    This would, however. be cost prohibitive because of the current costs associated with doing this. I must add, however, that these costs are likely to come down as the Government of Jamaica issued two licences to fibre providers earlier this year.

    With respect to access to capital, this should improve once the Government of Jamaica passes the long promised legislation allowing advertising on local television channels.

    IR: What has been the top reasons that has retarded industry growth?

    CC: The most significant reason is

  • Access to capital: Operating a cable television channel or a business producing television programming is a long term project and has to be funded as such. In order to get long-term funding for equipment,facilities and other funding needs, one must demonstrate an ability to generate cash flow over the proposed term of the loan.

    Cable channels generate cash in two possible ways - through subscribers or cable companies paying a monthly fee or through advertising. In the event of local cable companies, advertising income was not being maximised because the government had not until just recently made local advertising on cable legal. Because of this, cash flow and, therefore, access to capital has been limited.

  • Inability to work together: There appears to be a belief among some cable television channels within Jamaica that their competition is other local cable broadcast television channels.

    This results in an ability to cooperate and work with other local television channels that might benefit both. Although some cooperation does exist, in most instances, it is not structural and certainly not deep. In many respects, it is difficult for any single local cable channel to operate, by itself, a worldwide-distributed channel. Cable and satellite channels need a constant diet of programming in order to sustain viewership.

    Other reasons include the lack of a clear U.S. distribution channel or platform for Caribbean programming and an unwillingness of local cable channels to take the upfront financial risks of creating their own distribution systems.

    CC: Several years ago, I was a corporate banker with a large United States bank, putting together loans for U.S. cable television operators. Each year, we would host the senior executives and owners of these companies at a local country club in Philadelphia.

    I remember that at one of the events, I saw the head of one of the largest cable companies in the U.S. dancing the butterfly. I am sure any Jamaican living anywhere worldwide will have similar stories.

    The point is that our music has captured the hearts and minds of the world for several decades. I believe our music, our culture was appealing, in the early days, because our early artists preached peace and love, sang about rights, justice and poverty.

    I believe that it is this will to succeed despite the obstacles and the embodiment of this will in our culture and music that made, and makes our culture appealing to the world.

    IR: Is there money in it and how do you go about making it?

    CC: I believe there is and I also believe that ultimately, it may generate income to rival tourism for Jamaica. The United State's greatest export is intellectual property including movies and television. The question is whether that revenue will be coming to Jamaica and Jamaicans or to other countries. There are two ways to make money, the difference between the two being commitment and capital.

    First, a company can opt to be a syndicator, selling programming to the various cable channels or television stations around the world. Secondly, a company can operate its own channel and try to negotiate distribution deals on the various cable or satellite platforms around the world.

    The financial commitment of a syndicator involves the costs related to producing the programming and the infrastructure necessary to support it.

    Operating a cable or satellite channel looking to get global distribution is a very different level of commitment. Estimates of what it takes to operate a niche channel in the United States and getting it to a break-even cash flow run upwards of US$10 million+.

    However, operating a channel that has successfully negotiated distribution means your success is in your hands versus a syndicator, which consistently has to rely on selling the programming idea to a relatively small group of television executives.

    Ingrid Riley is partner and business development director of Lee Quee and Riley, an integrated marketing communications company. Email:

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