Does a Lower-Dial Slot Still Matter?

In the 1980s, when operators offered a lineup of 30 to 50 channels, cable networks clamored to be placed among the first 10 to 15 slots on the dial to maximize viewer exposure and ratings.

But with more than 200 services to choose from — as well as the advent of interactive program guides (IPGs) to help viewers better locate their favorite networks — some programming executives say the cache once attached to channel placement is no longer as important.

Conversely, others believe that a channel's neighbors on the dial are more important to attracting eyeballs in today's multichannel environment than the actual number allocated to a service.

Top 30 matters

During cable's early days — when capacity was scarce — new and expanding networks commonly provided rate-card discounts to operators for lower channel positions. Back then, many viewers would channel surf beginning at channel 1 or 2, providing cable networks at the lower end of the dial with ideal exposure for their programming.

Even now, with more than 100 channels, networks on the lower end of the dial still generate higher ratings than those slotted higher.

A 2001 Nielsen Media Research study on channel placement and ratings indicated that networks placed within channels 1 to 13 generated ratings more than 120% higher than the average network cable rating. Also, networks slotted among channels 36 to 40 generate ratings 65% higher than the median.

On the flip side, networks occupying slots above channel 200 have ratings that are basically half the average.

"It's a desirable goal to get within the top 30 channels on the lineup," said Court TV executive vice president of affiliate relations Bob Rose. "I think people still look at broadcast television and surf their way up. Being around that broadcast part of the dial is important."

Some nets still pay

As a result, channel placement remains a priority for some networks — enough so that some continue to pay operators to reserve lower channel slots.

Universal Television Networks president of affiliate sales and distribution Doug Holloway confirmed that Universal-owned USA Network still provides financial incentives for favorable channel placement, but would not reveal specifics.

"There are operators and instances where it still matters," he said.

Court TV's Rose said networks can also earn lower channel slots through strong local ad sales efforts.

But for less-established networks, neither ad sales nor financial incentives would help displace a higher-rated cable staple on the dial.

"If we get an expanded-basic analog launch, the reality of being able to negotiate or compete for a particular channel position is limited," Hallmark Channel senior vice president of national distribution and services Ron Garfield said. "I would think that the lower we are on the dial the better off that we'll be, [but] we don't have a lot of leverage to negotiate that."

Yet even with strong economic or ad sales arguments, Rose said very few operators today are willing to risk upsetting viewers by making wholesale channel lineup changes.

"Someone has to move, and movement causes disruption and disruption means phones ring [within the system]," he said. "The question is whether you put money toward better channel position or into your programming and overall marketing?"

Less browsing

Despite the ratings discrepancies between high and low slots, several industry executives argue that channel placement is not as relevant in the digital environment, particularly when guides are prevalent.

Executives say that given so many viewing choices, consumers are now seeking out favorite channels wherever they are on the dial, rather than by browsing up from channel 1.

A 2001 Cable & Telecommunications Association for Marketing viewing-decisions study indicated that 63% of digital cable and 66% of direct-broadcast satellite viewers are more apt to turn to their favorite networks, rather than scroll through channels, compared to 57% of cable subscribers and 53% of analog cable subs.

DBS and digital-cable subscribers also chose their favorite channels at a higher frequency than they did specific shows or genres, somewhat dispelling conventional wisdom that most TV watching is based on "appointment" viewing.

"In [a digital and DBS] environment, channels become much more important in terms of their branding," Hallmark Channel vice president of research Jess Aguirre said. "This is a revolutionary finding. We've always learned that people turned to programming first. But in this finding, among the cable universe, the favorite channels came first and the favorite shows came behind it."

DirecTV Inc. senior vice president of programming Stephanie Campbell said fewer networks are concerned about numerical channel positions.

Genre groupings

Instead, placement relative to other networks is growing in importance.

DirecTV, for the most part, sorts services by genre. It also attempts to place like branded channels together — for example ESPN, ESPN2, ESPN News and ESPN Classic are all slotted next to each other.

Campbell said subscribers are finding the channels and programming they want to see under that channel format. DirecTV also employs an interactive guide through which viewers can set up their favorite channels or search for networks or programs by genre.

Given the rollout of digital cable, dial placement is becoming less of an issue for operators as well.

"Channel placement was of much more importance in a 30-channel environment when customers channel surfed," said Comcast Corp. senior director of public relations Jenni Moyer. "But now as customers are more likely to use the channel guides or surf around in channel neighborhoods that fit their viewing patterns, that is having a different impact on channel placement."

Even Holloway concedes that channel issue will become inconsequential in three to five years as younger consumers exposed to a 200-plus channel environment become cable's biggest customers.

"Younger consumers develop their own habits as opposed to the habits of older adults," he said.

Good neighbors

Finding a channel slot among top-rated or similarly themed services can be more beneficial than landing a lower channel slot, according to Black Entertainment Television senior vice president of affiliate sales Lee Chaffin.

"It's not so much where you're located, whether its channel 20 or channel 120, but it's what other channels are around you," said Chaffin.

It also helps to have a strong, recognizable brand. Chaffin said BET rarely resides within the top 20 or 30 channel slots, but no operator has ever requested additional marketing materials from BET to boost awareness for the channel.

"At the end of the day, it's about the brand," Chaffin said. "We have a strong brand and something that's popular with the African-American community and the urban community for 23 years. When people move to different cable systems, they know to search out BET because of the brand."

Rose also praises the benefits of brand awareness — although he said it doesn't hurt to be located among other identifiable brands.

"We have a great brand. People go to brands that mean something and they go to programs. We have both," Rose said. "But in order to bring in viewers that aren't aware of what we're about, I think there's a value to be in a high-traffic neighborhood."

R. Thomas Umstead serves as senior content producer, programming for Multichannel News, Broadcasting + Cable and Next TV. During his more than 30-year career as a print and online journalist, Umstead has written articles on a variety of subjects ranging from TV technology, marketing and sports production to content distribution and development. He has provided expert commentary on television issues and trends for such TV, print, radio and streaming outlets as Fox News, CNBC, the Today show, USA Today, The New York Times and National Public Radio. Umstead has also filmed, produced and edited more than 100 original video interviews, profiles and news reports featuring key cable television executives as well as entertainers and celebrity personalities.