The number of satellite channels has risen fast, and more are on the horizon. Are the new channels commercially viable, and what impact will they have on viewers and public service broadcasters?

VH1 is a good case history. It was launched in November 1994 as MTV’s companion channel, targeted at 25 to 44-year-olds, as opposed to MTV’s 15 to 34-year-olds. The main uncertainty was whether it would take viewers off MTV or boost music viewing overall.

The chart above shows that VH1 secured MTV’s position in its core market and built up music viewing in the 25-plus age group.

The satellite TV music market measured by BARB covers three channels – MTV, VH1 and CMT. In October 1994, the average music minutes viewed by individuals in satellite homes was 22 per week (though this rose to about an hour and three quarters among MTV/ CMT viewers). By January 1996, this had jumped to 27 minutes, a 23 per cent hike. In the same time period, homes with satellite rose from 3.7 million to 4.9 million.

Age is the discriminator in music, and the increases in music viewing show big differences by age group. Ten to 15-year-olds are viewing less, 15 to 24-year-olds the same amount. Twenty five to 34-year-olds are now viewing as much music as 15 to 24-year-olds and viewing among the over-35s, is showing substantial growth. Much of this reflects the arrival of VH1.

The main reason music viewing is down among ten to 15-year-olds is because of an increase in competition for this age group. Since October 1994, The Children’s Channel has changed its name to TCC and its target market is now ten to 15-year-olds; Nickelodeon has continued to target ten to 15-year-olds but has improved its programmes; Disney has arrived; and The Cartoon Network has longer hours.

The audience share for these four channels is now 50 per cent higher than children’s channels 16 months ago. This has cut into the music viewing of young teenagers.

These 16 to 24s still view the same amount of music, but whereas in October 1994 MTV took 98 per cent of their minutes, it now takes 65 per cent and VH1 33 per cent. VH1 has given 15 to 24-year-olds more music choice and many take advantage of it.

Music listening by 25 to 34-year-olds is up by over 40 per cent. The average 25 to 34-year-old music listener viewed 85 minutes weekly in October 1994; he or she now views 118 minutes. VH1 takes well over 50 per cent share. A similar picture emerges among 35-plus viewers.

More choice in music viewing, carefully targeted, has increased the amount of music viewed, secured MTV/VH1’s position within the 15 to 24 age group by offering more choice, and built MTV/VH1’s market in older age groups. It has helped to fight the threat of CMT which, in 1994, held close to 30 per cent of 35-plus music viewers. Now, with the introduction of VH1, it holds just 23 per cent of the growing older market for country music.

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