Current TV Files For IPO With SEC

In a move sure to cause some heads to shake, Current TV--the network widely identified with founder Al Gore--filed for an IPO with the SEC on Monday. The move comes despite an overall downturn in media stocks, an uncertain future for independent cable networks and some $32 million in losses since 2005.

The company, which operates the Current TV network and associated Web site, said it would be known as Current Media, and plans to continue building a global media company targeting 18- to-34-year-olds with news and lifestyle content. The network is in some 51 million homes, including distribution in the UK and Ireland. It has a deal to launch in Italy this spring.

Revenue in 2007 was $63.8 million, up from $37.9 million in 2006. Net losses increased from $7.6 million to $9.9 million. (Expenses, including an additional $9 million-plus for programming, also went up considerably.)

The company has lost some $31.8 million since 2005 when the Current network went live. The IPO filing comes as share prices in media companies have been dropping precipitously, as fears of a recession and its ripple effect on the ad market rise. Also, the fate of independent cable networks appears to be up in the air, with conglomerates that control a portfolio of networks benefiting from that heft in negotiations with both affiliates and advertisers. NBC Universal recently acquired the Oxygen network, while the Hallmark Channel has sought a buyer for some time.



Last year, some 84% of Current TV's revenues came from affiliate fees, although the company said in its SEC filing that "over the longer term the majority of our revenue growth will be derived from advertising."

Ad revenues were some $10 million in 2007, up about 25% over the year before. The company, which has former Turner and Weather Channel executive Liz Janneman heading sales, indicated that it will look to build its sales staff.

Gore and co-founder, former Ohio Democratic Senatorial candidate Joel Hyatt, will control all the Class B shares of Current Media--which come with enhanced voting power --once the company goes public on the NASDAQ, as planned.

In order to build its ad base until now, the company has made what appears to be a series of category-exclusive deals with certain marketers--"agreements with some advertisers that effectively prevent us from selling advertising to their competitors"--according to the filing. Toyota, Johnson & Johnson and General Electric are prominent advertisers. The network does not yet subscribe to Nielsen ratings, though says it plans to.

Since 2006 when Sony launched a campaign, Current has offered marketers the opportunity to run user-generated ads--what it calls "VCAMS," for "viewer created ad messages." About a third of Current's programming comes from viewers, and the network seeks shorter-form content that runs in two- to 10-minute blocks.

"Leveraging this programming platform, we have pioneered innovative ways for blue-chip advertisers to reach and engage with our young adult audience--an audience that is highly sought after and, we believe, increasingly elusive in traditional media outlets," the company wrote in the filing.

In retrospect, when it launched in 2005, Current was on the cutting edge of the user-generated-content wave. But it arguably was soon overtaken by the likes of YouTube.

Current, which had been in the planning stages since 2002, got its toehold when it purchased cable network Newsworld International in 2004. That switched over to the Current network the next year in some 19 million homes.

Current's affiliate agreements, which give it distribution in some 51 million homes, are with a range of U.S. distributors, including Comcast, DirecTV and AT&T. The company said those deals don't begin to expire until three years down the road.

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