Cablers Mine Gold With Sticks Mix

Rural Media Group plots ambtious expansion with outlets devoted to 'country culture'
This appeared in Variety- March 5, 2013
There’s no more ambitious entrepreneur in the cable biz today than Patrick Gottsch, who’s raising a crop of channels targeting viewers in rural America.

Gottsch’s privately held Rural Media Group owns the flagship RFD-TV channel, as well as FamilyNet, which is a split channel with RMG’s Rural TV news service. The programming mix ranges from rollicking country, bluegrass and gospel music shows to live coverage of cattle auctions, rodeos and bull riding competitions to “Hee Haw” and classic sitcom reruns.

During the past year, Omaha, Neb.-based RMG has bet big on growing the company by hiring its first outside CEO, as well as a chief operating officer and a chief marketing officer, all with long resumes.

The goal is to capitalize on heartland auds’ interest in programming that reflects what RFD calls “country culture” while gradually opening the tent to urban viewers with new shows such as the music showcase “Live From Daryl’s House,” hosted by Daryl Hall. The eclectic mix of C&W, rock, R&B and spirituals served up by Marty Stuart and the Fabulous Superlatives (sequined suits and all) is developing a strong following with roots music aficionados through The Marty Stuart Show, which anchors RFD’s Saturday night lineup.

RFD-TV has been parked on the upper reaches of cable and satellite basic channel packages for a decade and reaches about 41 million homes. FamilyNet, which RMG acquired last October, now has a subscriber base of about 20 million homes. RMG chief executive Randy Bernard, who previously ran the IndyCar racing org and Professional Bull Riders Assn., has set a lofty target of boosting the combined reach of the company’s channels to 100 million TV households.

RMG’s expansion push has been financed internally, meaning no Wall Street coin or outside investors.

“It’s all our own money,” Gottsch says. “We’ve got strong cash flow. We turned the corner about three years ago and so far everything we’ve done we’ve been able to finance on our own.”

RFD-TV has come a long way since it was founded as a nonprofit entity in 2000 that got most of its programming for free from local sources desperate for any kind of national exposure. Satcaster Dish Network gave the service its first big carriage boost, and DirecTV added it in 2002. As its audience grew and original programming lineup took shape, Gottsch shifted to a for-profit model in 2007. Today, even has a digital extension in the subscription streaming service MyRuralTV.com.

Stuart credits RFD and Gottsch with giving him total freedom on a show that he owns 50-50 with RFD. “Marty Stuart,” now in its fifth season, is a throwback to the music-driven skeins that were staples of syndication in the 1960s and ’70s. Many of those (The Porter Wagoner Show, Pop Goes the Country, The Wilburn Brothers Show, etc.) are now showcased on RFD. In fact, Stuart first found RFD when he stumbled across an airing of The Porter Wagoner Show.

“I thought someone in the band was watching a DVD,” Stuart says. “I kept watching the channel and there were guys talking about cows and tractors. I couldn’t believe it. I watched the coverage of an entire (Future Farmers of America) convention.”

When Stuart finally met with Gottsch to pitch him a contempo spin on a musical variety show, the two clicked immediately. “Patrick said from day one — you make the shows, and I’ll stay out of your way,” Stuart says. “It’s like somebody handed me a box of crayons and said ‘Go to town.’ “

RMG has virtually no national competition in its focus on viewers in rural areas — particularly since the Nashville Network morphed into Spike TV in 2003. The 2010 Census counted 59.4 million people living outside urban areas (defined as regions with clusters of 50,000 or more people), or about 19.3% of the U.S. population.

It’s a narrow niche, for sure, but RMG is banking on advertisers realizing that people in the sticks need cars and diapers and life insurance just as much as their city cousins. Rural TV, which bowed last year and soon after merged with FamilyNet, aims to become indispensable viewing by offering extensive coverage of farm-related commodities and livestock futures news, as well as other agricultural and climate-related topics of interest to farmers. There are also live-event iterations through the RFD Theater in Branson, Mo. The company’s monthly RFD-TV magazine boasts 200,000 paid subscribers.

RMG’s growth push is coming at a time when cable operators in particular are getting tough on carriage deals for what they see as marginal networks. The FamilyNet acquisition came with distribution deals in some portions of larger markets including New York, Philadelphia, Chicago and Los Angeles, which was an important goal for distribution of Rural TV’s news programming.

Those carriage pacts may be harder to come by. Gottsch took to RFD’s airwaves in recent months to fight Cox’s attempt to drop FamilyNet in some markets. But with RFD’s top shows starting to approach the 1 million viewer mark, Gottsch is confident that his channels are distinctive enough to earn their carriage slots even if RMG doesn’t bring the heft of a Viacom or Disney to the negotiating table. In the coming months, RMG will be taking more strides to expand original production out of its facilities in Nashville and elsewhere, and it will further expand its presence on the rodeo and Western sports circuit.

“It just gets harder and harder for an independent channel to hold on and expand, but we’re doing it,” Gottsch says. “Our programming is unduplicated anywhere else. We’re proving our worth to cable and satellite operators.”
By Cynthia Littleton
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