• by David Goetzl  @dgoetzl, March 19, 2007

The Outdoor Channel, now available in perhaps 30 million homes, wants to grow its coverage by offering cable and satellite operators bargain rates and even cash incentives. In addition, network executives say they're looking to charge endemic advertisers significant increases--a strategy they say has already yielded higher CPMs (up to 40% greater) and more volume. They say the new pricing will drive ad revenue growth considerably above the 12.8% jump (to $25.7 million) in 2006.

President-CEO Roger Werner--who took over in November--said the company is in negotiations with multiple cable operators to renew current agreements, and is looking to expand into more homes via new deals. His enticement: A significant reduction in the subscription fees the channel charges, plus a willingness to offer marketing support and other financial contributions.

"We are reducing our fees to stimulate renewed interest in broadening our carriage and increasing our distribution," Werner said on a conference call with analysts last week.

Werner said he would look to cut five- to seven-year carriage deals. The first three to four years would call for sub fees well before 5 cents a subscriber (although he declined to specify exactly how far below)--but in the final years, fees would increase to what he termed "normalcy," between 5 and 10 cents per sub. In 2006, the company received $17.7 million in sub fees--up 14.6%.

Werner declined to cite a timetable for completing negotiations, but said the network's status as an independent, rather than part of a company with multiple channels, hurts its leverage with operators.

The parent company--Outdoor Channel Holdings--incurred a net loss of $7.3 million for 2006, compared to net income of $2.5 million in 2005. In 2006, ad revenues increased despite lower prices for infomercials--which the network expects to continue, due to a low demand, the company said.

Nielsen says the channel is in 30 million homes, up 4 million from a year ago. The network competes with the fully distributed ESPN and the former Outdoor Life Network, which Werner launched and sold to Comcast. Comcast then turned it into a general sports-themed brand and recast it as OLN, before giving it the name Versus last year. (It still offers some outdoor programming.)

Werner said he plans to upgrade program quality to drive distribution and ad sales. The company is also investing $2 million in an enhanced Web site with a new broadband offering, with the "intention of being the category leader in outdoor programming on the Internet."

A new on-air look and logo for the channel are set to be unveiled in May, but Werner said highly tangible evidence of improved programming won't be evident until late this year, or even 2008.

Some improvements are contingent on Werner remaining in his post. In addition to selling Outdoor Life to Comcast, he unloaded Speedvision to News Corp., and some years before, a high-profile regional sports network to TCI.

Werner helped launch ESPN in 1979, then served as its COO from 1982 through 1988, and later as president/CEO.